SGX lists private actions against offenders

SGX's new bulletin does not name firms or individuals but spells out what rules were broken, pinpoints the common pitfalls and how the breaches occurred and what actions were taken. Private disciplinary actions taken include issuing reminders and let
SGX's new bulletin does not name firms or individuals but spells out what rules were broken, pinpoints the common pitfalls and how the breaches occurred and what actions were taken. Private disciplinary actions taken include issuing reminders and letters of warning to the offenders.PHOTO: SINGAPORE EXCHANGE

Aim of new online bulletin, which details case studies, is to raise overall governance level: Bourse

The Singapore Exchange has begun publishing a bulletin that details its rulings on the private disciplinary actions it has imposed on companies, executives and industry professionals who breached listing rules.

The list does not name firms or individuals but spells out what rules were broken, pinpoints the common pitfalls and how the breaches occurred and what actions were taken. Private disciplinary actions taken by SGX include issuing reminders and letters of warning.

"A securities market is only sustainable if it constantly improves itself," the SGX said yesterday.

"We hope that by sharing case studies of non-compliance of the listing rules with listed companies... awareness of recommended practices and guidelines will increase, thereby raising overall governance standards," it said.

The bulletin, which is published on www.sgx.com, complements SGX's Regulator's columns and announcements of public reprimands.

Law partner Robson Lee of Gibson, Dunn & Crutcher noted that private enforcement actions by the SGX are "presumably for less serious" breaches of the listing rules.

He said the SGX publishes public sanctions against errant issuers and individuals on a case-by-case basis.

"To complement this bulletin, the SGX may wish to subsequently publish a list of public enforcement actions like the Hong Kong Stock Exchange (does) to provide the market with a comprehensive guide on the policy guidelines, processes and deliberations in initiating enforcement actions, both private and public," he said.

National University of Singapore (NUS) Business School's Associate Professor Mak Yuen Teen said the SGX has a "calibrated range" of enforcement actions.

"The idea of non-public enforcement actions is that they are for less serious infractions and should remain private. If issuers continue to infringe, SGX can resort to public sanctions. By publishing case studies, other issuers are also put on notice," he said.

Bulletin 'more relevant for firms than retail investors'

The bulletin may also help reduce compliance costs by reducing the need for issuers to over- rely on advisers for compliance, he added. "The sponsor compliance guidelines are useful reminders of a sponsor's roles and responsibilities."

Veteran investor and activist shareholder Mano Sabnani sees it as a step forward. He said: "Companies will have easy reference to the actions taken against other companies on a private basis. The compliance toolkit is useful for companies undertaking various corporate actions."

He noted that the toolkit is not directly relevant for individual investors but the regulatory decisions will provide insights into the work of the SGX in monitoring companies.

It would be good if more of the regulatory decisions could be made public, and the names of companies involved were revealed, Mr Sabnani added.

A version of this article appeared in the print edition of The Straits Times on December 22, 2015, with the headline 'SGX lists private actions against offenders'. Print Edition | Subscribe