Good afternoon,

Shareholder-requisitioned meetings are a key channel for shareholders to seek and obtain support of their proposals for companies. This may be particularly important if what they want differs from the current board and management’s thinking. Today’s public consultation seeks to facilitate the convening of these meetings, and empower shareholders who want to exercise their legal rights. We look forward to comments from the market community, especially on whether our proposals have struck the appropriate balance between the different groups of stakeholders.

I want to take a few moments to provide some context around today's consultation.

You would be aware of the many commentaries on the state of the securities market in Singapore, on matters such as the number of listings, the level of trading activity, the returns to investors, and the valuations of companies. I do not propose to discuss the reasons for these, which have been well-canvassed by others. But I wish to emphasise that it takes the entire market community to improve the situation. We can have simultaneous efforts to enhance shareholder value, investor interest, liquidity, and valuations, acting in mutually reinforcing ways to benefit our market and participants. So the question is how we can play our part as regulators. Given that concerns surrounding shareholder value seem to be front and centre of investors' minds, we have chosen to emphasise the importance of creation of shareholder value, or in short, a “value focus” approach.

There are a few broad buckets of work within this overall push for “value focus” namely: enhancing board effectiveness, encouraging market discipline and reducing friction.

Driving “value focus” behaviour starts with the board of directors.  This is why we have introduced a 9-year limit on the tenure of independent directors, to promote board independence and encourage board renewal. New directors will bring new ideas and be less wedded to legacy businesses. Likewise, our new rule mandating board diversity disclosures. We believe that greater diversity helps to improve decision-making and openness to opportunities in new areas such as sustainability. We have also sought to increase the transparency of the link between pay and long-term value creation by enhancing remuneration disclosures of the board and CEO.

Encouraging market discipline is another major area of work in the “value focus” approach. If shareholders and investors have a stronger say, companies will have greater incentives to consider their interests, by improving both operational performance, and returns to shareholders. The convening of shareholder meetings which we are consulting on today is one such channel for shareholders to drive change.

We also intend to work with our industry partners on other ways to empower shareholders and give them a louder voice. The Securities Investors Association (Singapore) (Sias) has recently indicated that they are studying the possibility of posing additional questions to boards of undervalued companies on their plans to improve their valuations. We support this initiative and encourage companies to respond meaningfully and comprehensively to such questions.

Another way our companies can unlock value is through corporate actions such as mergers and acquisitions or divestments to focus on more strategic priorities. We have received feedback that enhancing investor confidence in the valuations of the businesses to be acquired or disposed of could help to facilitate these transactions. We are therefore looking at ways to enhance the robustness of valuations, again in consultation with our industry partners.

As a final bucket, we are also looking at ways to reduce market friction. We have received feedback on how our trading queries may affect the ability of companies to conduct “value focus” activities such as share buybacks. We have thus launched a review of the queries posed to listed companies, to explore how we can issue such queries in a way that creates less noise for the market while ensuring material information continues to be available to investors. This is in addition to the steps we have already taken to fine-tune our queries regarding unusual trading activity to make them more targeted. This has led to a fall in the number of such queries issued in the last half-year.

Putting it all together, we are working on improving the quality of the board, empowering shareholders, and changing market mechanisms to drive “value focus” behaviour. Companies need to hear what the market is asking for. At the same time, the market needs to reward the companies that listen and act. We have already seen some evidence of this.

Companies like Keppel and Singpost have conducted strategic reviews, with the aim of generating shareholder value. Others such as OCBC, Capitaland Investment, and Sembcorp Industries are also delivering returns to shareholders through share buybacks, in addition to the plethora of companies paying out dividends.

Today’s consultation on enabling shareholders to convene meetings is just one of the initiatives that we are working on and intend to unveil progressively over the coming months. We look forward to working closely with the rest of our market and receiving your feedback and ideas, as we refine and roll out these measures.

Thank you for your attention.