SGX advises firms to err on the side of caution when it comes to disclosures

When in doubt, disclose, the bourse said.

Amid the criticism swarming Swiber Holdings’ disclosures leading up to its liquidation filing, the Singapore Exchange has sternly reminded firms the importance of disclosing relevant information to stakeholders.

In a speech at the State of Corporate Governance Disclosures organised by the Singapore Institute of Directors, SGX Chief Regulatory Officer Tan Boon Gin told firms to announce any information which is necessary to avoid the establishment of a false market in its securities, or would likely impact the price or value of its securities.

He further advised companies to avoid adopting narrowly prescriptive qualifications for materiality.

“There is no mention of what financial figures to compare against, and rightly so,” Tan said. “The fundamental determinant of materiality is whether the information will be useful to your investors in making their decisions. And the cardinal rule is—when in doubt, disclose.”

Tan also underscored that firms should consider the prevailing economic landscape when determining the materiality of certain information.

“So when the industry is humming along, the macro-economic environment is stable, and there is no real volatility in your business, what might be considered material could be quite different from information investors might need when your industry is going through extreme volatility and/or a protracted down-cycle, such that the financial position of your company is at risk of deteriorating quickly,” Tan stressed.