The past few months have been busy for Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo). Not only has he announced a flurry of regulatory guidelines and proposals, but he also has further areas of reform in mind. He recently spoke to ALB about what’s on the horizon for SGX, investors and business in Singapore.

ALB: 2020 has been an incredibly tough year so far. What have been the big challenges and adjustments in terms of your work?

TAN: As the frontline market regulator, we have had to pivot very quickly to respond to market needs. In the initial months, it was rather challenging, as the COVID-19 situation was very dynamic. As health and safety became the new priority that trumps everything else, this greatly impacted the way market interactions could take place. An example of this is how companies held virtual general meetings, as face-to-face meetings were not possible. We had to decide what that meant in terms of quorum, how investors could ask questions, and voting. Because many companies had not provided for virtual AGMs in their articles and their constitution, we needed to work with government agencies and ministries to introduce enabling legislation in parliament. Ultimately, it was about striking a balance between investors’ rights to participate in meetings, and the need for companies to be able to get on with their business. We did not write our SGX rules with something like COVID-19 in mind. Hence, when we apply the rules in this climate, we must be prepared to apply them in ways that we have not done before. Everything that we do to make life easier for our listed companies, must be counter-balanced by steps to protect investors. For example, because of the circuit breaker, we gave companies more time to announce their financial results, but at the same time, we put them on strict notice on their disclosure obliga-tions to shareholders.

“Our proposal is for SGX RegCo to have the powers to impose public sanctions directly, except for fines, which will continue to be reserved to the committees as fines are more punitive and severe in nature.”

--Tan Boon Gin

ALB: There’s a new proposed enforcement framework from SGX RegCo. What would this look like — and why now?

TAN: In times of economic stress, there is a greater propensity for wrongdoing. That is why we are proposing changes to increase the speed of enforcement. Speedier action is important for three reasons: They are a more effective deterrent against misconduct; we can restore market confidence more quickly; and we can give clarity to the market in a timelier fashion. Currently, we can only administer public sanctions by going through our independent disciplinary committees. Our proposal is for SGX RegCo to have the powers to impose public sanctions directly, except for fines, which will continue to be reserved to the committees as fines are more punitive and severe in nature.

ALB: Longer term, what other areas do you view as ripe for reform?

TAN: Looking forward, we are assuming COVID-19 will still be around from now until the year-end. This means continued or perhaps even more uncertainty and challenges globally both for companies and investors. Singapore introduced new insolvency legislation recently, to enhance further our restructuring regime. The latest changes include restriction of ipso facto clauses and allowing third-party funding to pursue claims to make it easier for insolvency practitioners to recover value and for companies to restructure. As regulators, we need to make sure that we do our part and apply our listing rules in a way that complements the restructuring regime and facilitates restructuring. On the other end of the spectrum, there are going to be winners out of this COVID-19 situation. We may need to figure out how to help these companies take advantage of this window to tap the public markets to scale up quickly.

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