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SINGAPORE : The Singapore Exchange (SGX) has put forward 36 proposals for public consultation to enhance corporate governance and improve disclosure by listed companies.
The aim is to improve the quality of the marketplace, and market players have said the move is timely.
Investors will get greater peace of mind next year if the SGX implements proposals to improve transparency and disclosure.
The new rules essentially govern disclosure of shares pledged, restricting all share transfers in a company that is under trading suspension, and mandating that controlling shareholders and associates hold their shares with the Central Depository.
There is also a new practice note that aims to give clarity on the use of Right of First Refusal agreements to prevent conflicts of interest for REITs and business trusts.
Observers said such measures will help to weed out troubles or inefficiencies in firms and improve quality in the market.
Wong Sui Jau, general manager, Fundsupermart.com, said: "So I think some of these steps will go a long way towards restoring investor public confidence - with regard to the financial results that they actually see - and the validity of the financial results of this group of company that they actually see."
SGX is also proposing amendments to existing regulations, including requiring firms to get regulatory approval to appoint directors, CEOs and CFOs under specific circumstances.
Listing aspirants will also be urged to appoint a governance advisor for the first two years of the IPO.
The Securities Investors Association of Singapore (SIAS) said it will be giving some inputs as well.
David Gerald, president, SIAS, said: "One of the recommendations that I would certainly want my committee to make is that where capital is raised in Singapore by companies listed here, (it) must be for purposes of investment or acquisition of assets; independent directors must ensure the stated purpose is achieved.
"Secondly, if the monies are raised in Singapore, then the monies must be kept in an account in Singapore and it must only be transferred to the expense account if it is approved by the board. So only authorised capital would move from the deposit account to the expense account."
The proposed new measures and amendments will be open for consultation until 15 January 2010. Following evaluation of the consultation response, experts said the measures could be put in place in the second half of next year. - CNA/ms
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