Self-Regulatory Organisation
SGX is a Self-Regulatory Organisation because in addition to its for-profit commercial objectives as a listed company, SGX has regulatory obligations and a public interest duty as a market regulator.
Rigorous regulatory standards ensure that SGX satisfies its statutory obligations to operate fair, orderly and transparent markets and safe and efficient clearing houses. Markets and clearing houses of high regulatory quality also possess an intrinsic commercial value.
A natural tension may arise within SGX from being both a listed company and a market regulator. This conflict of interest is known as a Regulatory Conflict.
SGX Regulatory Landscape
SGX is regulated by the MAS in the performance of its role as a front-line regulator and operator of the securities and derivatives markets.
Meeting International Standards
SGX maintains a robust risk management framework aligned with the highest international standards.
Our clearing and settlement infrastructure has been independently assessed under the International Monetary Fund’s (IMF) Financial Sector Assessment Programme (FSAP) as sound and efficient with an effective risk management framework.
Both SGX Derivatives Clearing and The Central Depository (CDP) have high levels of compliance with the Principles for Financial Market Infrastructures (PFMI), which are the latest international standards for payment, clearing and settlement.
We were one of the first clearing houses in the world to adopt the new PFMI in January 2013.
The FSAP review of SGX Derivatives Clearing and CDP are part of a broad assessment of Singapore’s financial system.
Regulatory Functions
SGX is the front-line regulator of the market, responsible for ensuring the market is fair, orderly and transparent. Our regulatory functions are as follows:
Disciplinary Framework
We supervise the compliance of listed issuers, their directors, executive officers, sponsors and registered professionals with the Listing Rules and the compliance of SGX trading and clearing members, their directors, trading representatives, officers, employees or agents with the Trading and Clearing Rules. Effective 7 October 2015, the Listing Rules have been amended to also include the supervision of issue managers including financial advisers advising on reverse takeovers (each abovementioned entity or individual a Relevant Person and collectively, the Relevant Persons).
Any suspected breach will be thoroughly investigated. Appropriate disciplinary actions will be taken against Relevant Persons taking into account:
i. market impact of the breach;
ii. nature of the breach;
iii. cause and duration of the breach;
iv. the number of breaches;
v. background of the Relevant Persons, in particular the past compliance track record; and
vi. mitigating and aggravating factors.
SGX investigative powers allows us to conduct investigations where there are suspected breaches of SGX Rules. Where the investigation reveals a breach, SGX may either:
a. isue a letter of warning to the Relevant Persons;
b. make an offer of composition to the Relevant Persons;
c. take other forms of enforcement actions available to us; or
d. charge the Relevant Persons before the Disciplinary Committee.
The ability to make an offer of composition to sponsors and registered professionals and the ability to make an offer of composition to issuers or charge the issuers, directors, executive officers and issue managers (including financial advisers advising on reverse takeovers) before the Disciplinary Committee came into effect on 7 October 2015.
The Disciplinary Committee hears the charges brought by SGX against Relevant Persons who are alleged to have breached SGX Rules. If the Disciplinary Committee decides that the charges have been established by SGX, it will decide on the appropriate disciplinary action.
A Relevant Person or SGX may appeal against the decision of the Disciplinary Committee to the Appeals Committee. The decision of the Appeals Committee is final and binding.
Please refer to:
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the Enforcement Handbook for guidance on matters related to SGX’s enforcement of compliance with the Listing Rules, prior to commencement of disciplinary proceedings before the Listings Disciplinary Committee and the Listings Appeals Committee;
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the Listings Disciplinary Committee and Listings Appeals Committee Handbook for guidance on proceedings before the Listings Disciplinary Committee and Listings Appeals Committee. Other information relating to the Disciplinary Committee and Appeals Committee is found here; and
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our Enforcement Philosophy.
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