From 1 Aug 2021, SGX RegCo will have expanded enforcement powers to issue public reprimand, or requires issuers comply with specific (non-appealable) conditions. SGX RegCo now has the power to prohibit issuers from accessing market facilities for a specified period or until fulfilment of specified conditions. It can also prohibit issuers from appointing or reappointing any officers (includes director, executive officer, CFO, CEO) for up to 3 years, or require the resignation of any officers. These powers can be exercised when any of the officers or the issuers are being investigated or are the subject of proceedings for contraventions of any relevant laws, regulations and rules relating to fraud, dishonesty, the securities or futures industry, corruption or breaches of fiduciary duties.
The takeaway message to all issuers and its officers is that SGX RegCo does not now need the Board to carry out its directives, but it can directly and immediately exercise the executive powers itself and independently. In addition, SGX RegCo enjoys immunity with the exclusion of liability relating to the provision of indemnity to SGX RegCo in respect of any loss or liability incurred as a result of or in connection with any breach by an issuer, listing applicant, issue manager, sponsor or sponsor applications. The intention of this indemnity is to enable SGX RegCo to discharge its functions independently without fear or favour.
Companies will now have to comply as a mandatory requirement to establish and maintain a whistleblowing policy, where the identity of the whistleblower is kept confidential and the individual is protected from reprisal. The current code of corporate governance operated on a ‘comply or explain’ basis, without the force of the law will no longer be the option from 1 January 2022.
Whether this set of new denture will bite swift and hard will depend on the execution by the SGX RegCo. The devils is in the details and the execution. But what is certain is the market has spoken and its demand for more and quicker public accountability has been heard. Now is it better for the Companies to be ready to watch their toes before it gets chewed.