The Singapore Exchange (SGX) will house its regulatory functions separately in a new unit with its own board of directors.
This is to address criticism arising from its dual role as a profit-making company and a front-line stock market regulator.
The unit is expected to be set up by the second half of next year, taking over market regulatory functions such as overseeing the 770 listed firms with an estimated total market capitalisation of $1 trillion. It will be headed by SGX chief regulatory officer Tan Boon Gin, who will report directly to the new unit's board.
The Monetary Authority of Singapore, which oversees the SGX as a listed company, welcomed the move, noting that it is an important step in strengthening the safeguards to manage potential conflicts of interest between the SGX's commercial and regulatory roles.
The new unit will not add to the requirements for companies applying for a listing here.
The SGX said that in line with the principle of keeping the new unit at arm's length, it will be governed by a board of directors separate from that of the exchange. "The chairman and a majority of its directors will be independent of SGX and its regulated subsidiaries. All directors of (the new unit) will also be independent of any other corporation listed on SGX," the exchange said.
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