To promote Singapore as a centre for international capital fundraising, the government-appointed Corporate Finance Committee has proposed a radical new regulatory regime in a consultative paper, shifting the emphasis to a predominantly disclosure-based philosophy of regulation, similar to the US system. Key points include:
- reducing the regulatory powers of the Stock Exchange of Singapore (SES). The SES will continue to regulate member broking firms, conduct market surveillance, promote corporate governance and review the adequacy of continuing disclosure;
- consolidating securities regulation functions vested in the SES, Securities Industry Council, Registry of Companies and Businesses and the Commercial Affairs Department, in a new super-regulator to reside in the Monetary Authority of Singapore;
- empowering the new super-regulator to bring civil suits against companies and directors on behalf of investors;
- SES will no longer assess prospectuses, shareholder circulars and other information provided by listed companies. The new super-regulator will review listing prospectuses after listing to assess if disclosure is sufficient. SES will continue to approve listing applications based solely on the listing criteria, rather than on the merits of the company or its shares. It was noted that the existing requirement of the SES's prior approval of transactions caused delays, impeded business and financial innovation, and kept out companies and issues deemed by the regulator rather than the market to be unworthy of investor participation;
- consolidation of securities market laws; and
- increased use of the Internet by companies, for the holding of shareholders' meetings, distribution of securities and dissemination of information.
The public is invited to comment on the proposals before final recommendations are submitted to the government in September or October this year.