Singapore bourse reviewing corporate governance compliance: Official

The bourse is seeking to boost its credentials as a front-line regulator

The Singapore Exchange (SGX) is reviewing compliance along its listed companies with corporate governance rules, a senior official said, as the bourse seeks to boost its credentials as a front-line regulator.

Unexplained deviation from the code could lead to action against listed companies, Tan Boon Gin, SGX's chief regulatory officer, warned on Tuesday in a speech at the Thomson Reuters ASEAN Regulatory Summit.

Analysts have in the past criticised SGX's ability to enforce regulation following a 2013 penny stock crash that hurt trading volumes. Tan, who joined SGX in June from Singapore's white-collar crime police, recently made headlines when he drew attention to the way some Chinese companies listed on the bourse were reporting sudden adverse financial changes.

He said the SGX will publish the results of the review and highlight the areas that need improvement including the "unacceptable use" of boilerplate explanations.

"Following the review, we will work one-on-one with companies that have fallen short to improve how they comply with the code," Tan said. "If despite us doing all these, a company still does not meet the requirement, you can expect us to take action."

In his speech on Tuesday, Tan put the case for greater shareholder activism from institutional investors in Singapore.

"We cannot increase the percentage of institutional investors overnight. But we can increase the level of shareholder activism by institutional investors," he said.

The Singapore stock market has seen a rise in short-selling activity as such investors look to profit from weakness in shares of companies with heavy exposure to a slowing Chinese economy or the energy sector.

Some of the high-profile companies that have faced attacks from short-sellers include Singapore-listed Noble Group and Olam International.