Last week, SGX released a consultation paper that seeks to impose some new measures in an attempt to strengthen the corporate governance of listed companies in Singapore.
A possible catalyst behind this consultation paper is the recent spate of misleadings unearthed in our S-Chips.
Key changes include the requirements for directors, key appointment holders and auditors.
There are also a couple of addition restrictions on share transfers and pledging of shares.
All these are good for the investor but the question remains – what punishment could be meted out if companies do not adhere to these new requirements?
After all, SGX is a profit oriented listed entity itself and has limited regulatory powers to impose any sort of punitive punishment for wrong doers. Its usual mode of supervision has been restricted to issuing a public censure and for more serious breaches, a threat of delisting. An irony is that SGX is also subjected to the same rules that other listed companies have to follow. Who would monitor SGX then?
To read and give your feedback on the consultation paper (till 15th Jan 2010), you can visit here: