The Singapore Exchange (SGX) has announced the launch of a new initiative that aims to enhance investor transparency and disclosure. The initiative will be implemented in stages over the next two years, with the first stage set to be completed in December 2021.
Background
The SGX is the main stock exchange in Singapore, and it has been in operation since 1999. Over the years, the SGX has become a key regional market, with many companies listing and trading their shares on the exchange.
However, as the exchange has grown, so have concerns about transparency and disclosure. In particular, investors have raised questions about the quality of information available to them and the level of disclosure from companies that are listed on the SGX.
Details of the Initiative
The new initiative will focus on three main areas: disclosure, audit and corporate governance.
The disclosure requirements will be enhanced, with companies being required to provide more detailed information about their financial and operational performance. This will include providing investors with more timely and accurate information about their financial results, as well as more detailed information about their operations and strategies.
The audit requirements will also be strengthened, with companies being required to engage an independent auditor to review their financial statements and other documents. The aim is to ensure that investors have access to reliable and accurate information about the companies they are investing in.
Finally, the corporate governance requirements will be tightened. This will include introducing the Corporate Governance Code of Practice, which will set out the standards that companies should adhere to when it comes to their corporate governance practices.
Implications
The new initiative is expected to have a positive impact on investor confidence in the SGX. The enhanced disclosure requirements should give investors more confidence in the information they are receiving, while the strengthened audit and corporate governance requirements should ensure that companies are adhering to best practice when it comes to their financial and operational performance.
The initiative is also likely to lead to increased demand for the SGX, as more investors look to invest in companies that are listed on the exchange. This could lead to increased liquidity in the market and could support further growth in the exchange.
Conclusion
Overall, the new initiative from the SGX is a welcome development that should help to enhance investor transparency and disclosure. The initiative is expected to have a positive impact on investor confidence in the exchange and could lead to increased demand for the SGX.