Companies that come under fire from short-sellers or through critical reports should quickly assess the severity of the attack and respond effectively.
The advice came from Singapore Exchange (SGX) chief regulatory officer Tan Boon Gin, who added: "(Firms) must provide... a full response so that shareholders have a complete picture and can make informed decisions."
Mr Tan noted that some listed companies have recently been the target of other rumours and speculation or the subject of reports questioning the veracity of their financials, for example. "In some instances, their shares were sold down steeply, or bought up," he said.
This is likely a reference to commodities giant Noble Group, which has been under sustained attack for much of the year from Iceberg Research and others questioning the firm's accounting processes.
Short-sellers have targeted the company, whose shares have plummeted more than 60 per cent since February.
The stock closed half a cent or 1.18 per cent up at 43 cents yesterday - a shadow of its glory days, when share price peaked at $2.34 in 2011.
Mr Tan noted in his SGX regulator column yesterday that regulated short-selling is part of a well-functioning market.
"For a market to function well, bullish investors should be able to buy securities and go long, while bearish investors should have the ability to short-sell," he said.
"This supports market liquidity and efficient price discovery."
At the same time, short-sellers, commentators and research firms that issue critical reports of a company should be aware that they are entitled to a right of reply, said Mr Tan.
The company, in turn, must clarify, confirm or deny rumours or media reports "as soon as possible", while assessing if trading in its shares can continue on an informed basis.
Mr Tan added that SGX is willing to allow a halt or suspension pending a firm's preparation of its reply to "prevent prices from being distorted by sudden and one-sided criticism".
The exchange will also take action if the criticisms contain false or misleading statements, he said.
"SGX will, at the same time, closely monitor the company's disclosures and trading activities of its shares, and constantly engage with the company.
"We will take all action necessary to maintain a fair, orderly and transparent market, including working with other regulatory bodies."
Noble, which maintains that it has nothing to hide, has vowed to improve its transparency and engagement with stakeholders.
The firm recently hired PricewaterhouseCoopers (PwC) to review its methods and practices in valuing some of its commodity assets. It later released PwC's report to the public in full, together with its second-quarter results on Aug 10.
Noble also held an investor day event on Monday where senior management met shareholders and other investors to address their concerns.