Singapore Exchange to transfer regulatory functions to separate subsidiary

SINGAPORE (Reuters) - Singapore Exchange Ltd (SGX), which has come under criticism after a string of trading disruptions, announced plans to transfer its front-line regulatory functions to a separate subsidiary that will be governed by its own board of directors.

"The move aims to further enhance the governance of SGX as a self-regulatory organisation (SRO) by making more explicit the segregation of its regulatory functions from its commercial and operating activities," SGX said in a statement on Monday.

The move comes just days after SGX reported its longest trading disruption, piling pressure on Chief Executive Loh Boon Chye as he tries to rejuvenate a bourse facing stiff competition in the region.

Unlike other major financial markets, Singapore does not have a dedicated securities watchdog. Instead, SGX is the front-line regulator and is in turn regulated by the central bank, the Monetary Authority of Singapore (MAS).

MAS said in a statement that it has been in close discussions with SGX on enhancing the governance of the exchange's regulatory responsibilities and that it will continue to directly regulate SGX in its roles as both a market operator and a listed company.

SGX has faced growing calls from brokers and investors to relinquish its dual role as a regulator and a stock exchange operator. http://bit.ly/29ImxKZ

Loh said the transfer of the regulatory functions and SGX's previous move to set up an independent listings committee would address potential conflicts between its commercial objectives and regulatory responsibilities.

Trading in SGX shares resumed after being halted earlier before the announcement.

(Reporting by Anshuman Daga; Editing by Shri Navaratnam and Sam Holmes)