Separate roles of regulator, operator of stock exchange

Mr Lawrence Loh Kiah Muan's letter ("List of ailing firms not enough to protect shareholders"; May 23) brings back the old concern of many market commentators that the role of the regulator and the operator of the stock exchange should be separate.

This is an obvious conflict of interest that the Singapore Exchange (SGX) cannot resolve.

The fact that this proposal has not been adopted after so many years tells me that the authority might have some difficulty in implementing it.

So, I suggest a compromise - that the listing committee be formed by independent members who hold no fear or favour for the profitability of SGX. This committee should be refreshed for every initial public offering. Members appointed should have experience in the field of the company holding the IPO.

Mr Loh also observed that "of the 20 firms that have been suspended from trading, more than half are China-based".

This implies that in addition to industry knowledge, the independent appointees need to have knowledge and experience of the local market where the companies are based.

I have not invested in any S-chip because of my work experience in China and India. These markets are very different, and the businessmen there have a very different mentality from those in Singapore.

We cannot adequately protect our retail investors if we continue the current procedures that invite problems even before the company is listed.

If the regulator has problems getting qualified independent appointees for the committee, I suggest that it looks to the many retired professionals, managers, executives and technicians, who have years of experience behind them and who lost any potential conflict of interest after retiring from active involvement in business.

Geoffrey Kung

A version of this article appeared in the print edition of The Straits Times on May 31, 2016, with the headline 'Separate roles of regulator, operator of stock exchange'. Print Edition | Subscribe