I REFER to the letter ‘China Energy warned’ (BT, Nov 7). This is at least the second time this year that the Singapore Exchange (SGX) has had to issue a statement refuting what a listed company has said. The other case involved Swissco. It is surprising to me that listed companies would make public statements referring to a regulator, without consulting the regulator as to the accuracy of these statements.
This raises concerns that some listed companies may be disrespectful of the regulator, believing that there are no serious consequences to making inaccurate statements.
Clearly, if a company has been given a warning, it is not completely accurate for it to claim that it has not been penalised. However, the company may argue that the warning from SGX had not been explicit or firm enough for it to be considered having been ‘penalised’.
If the warning had been clear, then shouldn’t SGX take firmer action than just ‘setting the record straight’, because the statement is at least mischievous, if not misleading?
More fundamentally, I believe that any censure by a regulator of a listed company is information which is relevant to investors in a disclosure-based regime.
As the saying goes, sometimes ‘from little things, big things grow’. While not all companies which have infringed rules will become ‘serial infringers’, I believe that the best way to nip a problem in the bud is to publicise the censure and those in companies responsible for it.
It is unclear to me why SGX wants to practise private warnings or private reprimands. The best way to build confidence in a market is to increase transparency and show that there is effective enforcement. Private warnings and censures may also raise concerns about whether SGX is actually proactively enforcing its rules, and whether enforcement actions are applied without fear or favour.
It is also unclear what criteria are used by SGX to decide whether it would issue a private warning, a private reprimand or a public reprimand. For example, would the failure to announce stock option grants immediately or to disclose the reasons for director resignations warrant a private warning or something else?
Contrast this with the approach taken by the Stock Exchange of Hong Kong. It maintains a link (http://www.hkexnews.hk/reports/enforcement/enforce.asp) which shows enforcement notices and announcements against companies and individuals in these companies dating back to 2001. It also produces a report of settlements of stock exchange disciplinary matters regarding listing rule breaches.
I urge SGX to consider publicising all enforcement actions against listed companies and putting them on its website. This will further strengthen our disclosure-based regime and ensure that investors are fully informed.
1 comment:
SGX should publicise all its enforcement actions
11 November 2008
I REFER to the letter ‘China Energy warned’ (BT, Nov 7). This is at least the second time this year that the Singapore Exchange (SGX) has had to issue a statement refuting what a listed company has said. The other case involved Swissco. It is surprising to me that listed companies would make public statements referring to a regulator, without consulting the regulator as to the accuracy of these statements.
This raises concerns that some listed companies may be disrespectful of the regulator, believing that there are no serious consequences to making inaccurate statements.
Clearly, if a company has been given a warning, it is not completely accurate for it to claim that it has not been penalised. However, the company may argue that the warning from SGX had not been explicit or firm enough for it to be considered having been ‘penalised’.
If the warning had been clear, then shouldn’t SGX take firmer action than just ‘setting the record straight’, because the statement is at least mischievous, if not misleading?
More fundamentally, I believe that any censure by a regulator of a listed company is information which is relevant to investors in a disclosure-based regime.
As the saying goes, sometimes ‘from little things, big things grow’. While not all companies which have infringed rules will become ‘serial infringers’, I believe that the best way to nip a problem in the bud is to publicise the censure and those in companies responsible for it.
It is unclear to me why SGX wants to practise private warnings or private reprimands. The best way to build confidence in a market is to increase transparency and show that there is effective enforcement. Private warnings and censures may also raise concerns about whether SGX is actually proactively enforcing its rules, and whether enforcement actions are applied without fear or favour.
It is also unclear what criteria are used by SGX to decide whether it would issue a private warning, a private reprimand or a public reprimand. For example, would the failure to announce stock option grants immediately or to disclose the reasons for director resignations warrant a private warning or something else?
Contrast this with the approach taken by the Stock Exchange of Hong Kong. It maintains a link (http://www.hkexnews.hk/reports/enforcement/enforce.asp) which shows enforcement notices and announcements against companies and individuals in these companies dating back to 2001. It also produces a report of settlements of stock exchange disciplinary matters regarding listing rule breaches.
I urge SGX to consider publicising all enforcement actions against listed companies and putting them on its website. This will further strengthen our disclosure-based regime and ensure that investors are fully informed.
Mak Yuen Teen
Singapore
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