SINGAPORE - The Singapore Exchange's regulatory arm (SGX RegCo) could have enhanced powers in future, including issuing a public reprimand to listed companies caught in wrongdoing and requiring a firm to suspend directors or executive officers.

It also wants to fix whistle-blowing policies into its listing rule requirements, making them mandatory in annual reports and the requirements more detailed.

Part of proposed changes to the enforcement framework, the measures were laid out on Thursday (Aug 6) by SGX RegCo chief executive Tan Boon Gin during a media briefing.

He said: "Individuals and companies will be tempted now more than ever to commit wrongdoing in one form or another (and this is true not just in Singapore but also everywhere). As the regulator, we need to work together with the community to raise standards across the entire market."

He added: "Given the effects of Covid-19, our targeted approach to regulation must go further. Job creation and economic recovery need regulatory frameworks that are supportive.

"This applies not just to companies that are already listed but also to companies that may be tapping the public markets for the first time. Saving jobs may also require supportive regulatory frameworks to facilitate the restructuring of listed companies."

The proposed changes to the enforcement framework will allow quicker action to be taken against errant companies, he said.

Currently, public sanctions are meted out by an independent Listings Disciplinary Committee (LDC), which was set up in 2015 and consists of experienced market professionals.

But the committee has heard only three out of 18 pending notices of charges because of delays due to conflicts of interest. Cautious of these, committee members had to recuse themselves, causing some proceedings to restart.

Said Mr Tan: "We have since become acutely aware that the process of arriving at an outcome for each public enforcement action has taken far longer than anticipated. To the public and the media, this has been interpreted as a lack of enforcement altogether."

Under the new framework, SGX RegCo can impose all public sanctions that the LDC is able to - except for fines, which are the most severe measure.

It can issue public reprimands, require a director or executive officer to resign from existing positions, prohibit a company from appointing the director or require a firm to suspend the director for not more than three years.

Mr Tan said: "Speedy actions are a more effective deterrent against misconduct. We can restore market confidence quicker and we can give clarity to the market in a more timely fashion."

He noted that the market is also maturing and becoming more aware and vocal.

"We need to be sensitive to the market and its needs. Our ears must be on the ground... We are proposing changes to speed up our enforcement actions because we hear market concerns about the absence of public enforcement."

Besides stronger enforcement powers, SGX RegCo proposes adding whistle-blowing policies to its Listing Rules.

Currently, the code of corporate governance requires companies to publicly disclose and communicate to its employees the existence of a whistle-blowing policy. Firms also have to state in their annual report how they have complied with the code.

The code does not, however, have the force of the law. It also operates on a "comply or explain" basis.

By setting the whistle-blowing policy into the Listing Rules, compliance will become mandatory and the requirements more detailed.

Mr Tan said that with the proposed changes, companies have to disclose specifically how they preserve the confidentiality of whistle-blowers and protect them from reprisals.

"Looking forward, we are assuming Covid-19 will still be around from now till the year end. This means continued or perhaps even more uncertainty and challenges globally both for companies and investors," Mr Tan said.

"As regulators, we have to internalise all this and ask ourselves what else we should do, given the circumstances, to build on what we have already done."

Comments on the proposal must be e-mailed to SGX by Sept 7.