SGX to set up separate subsidiary to take over regulatory functions

RegCo is slated to be established by 2H17.

Singapore Exchange (SGX) is setting up RegCo, a separate subsidiary firm, to undertake the front-line regulatory functions it now performs.

According to the bourse’s release, the move is SGX’s effort to further boost the governance of SGX as a self-regulatory organisation (SRO) by segregating its regulatory functions from its commercial and operating activities.

RegCo’s establishment, slated for the second half of 2017, will not add to the requirements of the current IPO listing process.

RegCo will be governed by a board of directors separate from that of SGX. The Chairman and the majority of its directors will be independent of SGX and its regulated subsidiaries SGX-Securities Trading, SGX-Derivatives Trading, Central Depository and SGX-Derivatives Clearing. Further, directors will be independent of any other SGX-listed firm.

RegCo will be responsible for discharging all of SGX’s market regulatory and supervisory functions and will report to its own Board in this respect. The Chief Regulatory Officer of SGX will be the RegCo's CEO and report directly to RegCo’s Board.

Meanwhile, the Monetary Authority of Singapore (MAS) will continue to directly regulate SGX in terms of its obligations as a listed company and market operator. MAS will also maintain oversight of SGX’s regulatory responsibilities as performed by RegCo. SGX will be directly accountable for ensuring adequate provision of resources to RegCo.