SGX scraps compulsory quarterly reporting based on market cap

Reporting will only be required for companies associated with higher risks.

The Singapore Exchange Regulation (SGX RegCo) will replace its market cap-based compulsory quarterly reporting (QR) of financial reports, instead requiring it only to companies associated with higher risks starting 7 February, according to a news release.

Under the new approach, QR is only required if a company has received a disclaimer of opinion, adverse opinion or qualified opinion from its auditors on its latest financial statements, if its auditors have expressed uncertainty relating to an ongoing concern, or if SGX RegCo has regulatory concerns with the company.

All other companies are only required semi-annual reporting, although SGX RegCo encourages them to consider providing voluntary business updates to shareholders in between their financial reports.

Currently, QR is only required to firms with a market cap of at least $75m, which has been criticised as too arbitrary and not meaningful in targeting companies that should be doing more frequent reporting.

“A risk-based approach is more appropriate because it targets companies that are of greatest concern to regulators and investors, enabling more effective monitoring of how their concerns are being addressed,” the regulator said.

At the same time, SGX RegCo will also implement measures, like the exercise of powers to deem a person or entity an “interested person,” requiring an independent valuer for significant asset disposals, requiring additional disclosure for rights issues, and extending the need for disclosure and shareholders' approval for the provision to third parties of significant financial assistance.

SGX RegCo also issued new guidance to issuers on situations requiring timely disclosure of material information, making explicit that the disclosure obligations apply also to trade-sensitive information. It has set out its expectations on companies’ handling of material information.

The regulator has also established a whistleblowing office. According to SGX RegCo’s CEO, it will allow an avenue for the market to provide feedback.