Parliament: Investors must do their part by only taking risks they can live with

Investors "need to pay close attention to what is disclosed, look beyond potential returns and assess if they can also accept the risks that come with specific investments", said Mr Ong Ye Kung, Monetary Authority of Singapore board member.
Investors "need to pay close attention to what is disclosed, look beyond potential returns and assess if they can also accept the risks that come with specific investments", said Mr Ong Ye Kung, Monetary Authority of Singapore board member.ST PHOTO: DESMOND WEE

SINGAPORE - Regulators can ensure that investors have access to important company information but people must also be aware of their risk appetite before committing their money, said Mr Ong Ye Kung, Monetary Authority of Singapore board member.

"Risks are inherent in investment," said Mr Ong, who is also Education Minister, during the debate on the budget for the Prime Minister's Office on Thursday (Feb 28).

A key aim of regulation is to require that investors have access to "up-to-date, material information such as a listed company's financial conditions and prospects, in order to make informed investment decisions", he said.

But investors also "need to pay close attention to what is disclosed, look beyond potential returns and assess if they can also accept the risks that come with specific investments".

Mr Ong was responding to Non-Constituency MP Dennis Tan's question on how standards of corporate governance can be improved.

Mr Tan pointed out in Parliament that recent scandals surrounding Keppel Offshore & Marine's bribery charges and Hyflux's court-ordered restructuring have highlighted how poor corporate governance can have potential market implications.

Shareholder value and investor confidence can be affected as a result, he added.

 
 

Mr Tan urged the Government to set up an independent task force to evaluate the need for an agency to provide oversight on corporate governance standards and to improve audit quality.

Mr Ong said the central bank and the Singapore Exchange oversee corporate governance standards in listed companies.

The Accounting and Corporate Regulatory Authority is "responsible for upholding financial reporting and audit quality by inspecting the statutory audits performed by public accountants".

The regulators will "continue to calibrate rules and work with stakeholders... to strengthen" standards and practices here.

"We will continue to educate the investing public on the trade-off between risk and return through the MoneySense programme," said Mr Ong, referring to the national financial education programme.