The Singapore Exchange's regulatory arm, Singapore Exchange Regulation (SGX RegCo) could get enhanced powers in the future, including the ability to issue a public reprimand to companies caught in wrongdoing and to require a firm to suspend directors or executive officers.
Companies could also be expected to have whistle-blowing policies as part of listing rule requirements.
Part of proposed changes to the enforcement framework, the measures were laid out by SGX RegCo chief executive Tan Boon Gin at a media briefing on Wednesday.
"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 everywhere). As the regulator, we need to work together with the community to raise standards across the entire market," he said.
"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, said Mr Tan.
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 have had to recuse themselves, causing some proceedings to restart.
Under the new framework, SGX RegCo can impose all public sanctions that the LDC does, 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.
Besides enforcement, SGX RegCo is also proposing that all listed companies have to put in place and disclose details of their whistle-blowing policies.
Mr Tan said that with the proposed changes, firms will have to disclose specifically how they preserve the confidentiality of whistle-blowers and protect them from reprisals.
Comments on the proposal can be e-mailed to the Singapore Exchange by Sept 7.
