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Singapore Eases Quarterly Reporting Rule for Most Companies

Singapore Eases Quarterly Reporting Rule, Following Global Trend

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The Singapore exchange is about to make life easier for listed companies -- the safer ones, at least.

The bourse’s regulatory arm plans to end quarterly earnings reporting requirements that currently apply to all companies with a market capitalization of at least S$75 million ($56 million), according to Tan Boon Gin, the chief executive officer of Singapore Exchange Regulation.

When the rule change takes effect on Feb. 7, only riskier companies will need to report earnings every three months, Tan said at a press briefing. SGX RegCo will also tighten other disclosure rules and introduce a new whistleblowing policy as part of efforts to protect investors, Tan added.

Other global exchanges have moved away from mandating quarterly reporting for all their companies. The European Union ended its requirement in 2013, while Hong Kong only applies the rule to companies on its small-cap exchange. The U.S. Securities and Exchange Commission is currently reviewing the issue.

”Internationally, there’s a shift away from quarterly reporting and this is to allow companies to focus on the long term,” said Tan. About 75% of the local market currently reports on a quarterly basis, according to SGX RegCo.

Under Singapore’s new policy, a listed company will have to report each quarter in circumstances including when it receives a qualified report from its auditors, or when they express concern about the company as a going concern. The requirement can also be imposed if SGX RegCo has regulatory concerns about a company regarding disclosure breaches, for instance.

Despite the new rules, most larger companies, including banks, will likely continue reporting on a quarterly basis, said Mak Yuen Teen, an associate professor at the National University of Singapore. “When a source of information disappears, investors will use other sources as proxies, like analyst reports, and these will be less accurate,” he said.

SGX RegCo said the quarterly reporting requirements will apply to about 100 companies when the rules change in February. It plans to make the list public. Other Singapore-listed companies will need to report semiannually, though the exchange will “encourage” them to provide business updates on a more regular basis, Tan said.

Among the other changes announced by SGX RegCo:

  • SGX RegCo will set up a Whistleblowing Office which will take reasonable steps to protect the confidentiality and identity of a whistleblower; however, in instances where SGX RegCo is legally obliged to reveal the identity of the whistleblower, “for example to governmental or regulatory entities as part of investigations into allegations,” it will generally inform the person in advance
  • The regulator will have powers to deem a person or entity an “interested person” for transactions, and to aggregate separate transactions and treat them as one
  • Additional disclosure requirements will be introduced for rights issues
  • Acquisitions that reduce net profit or net asset value by 20% or more, or where the target is loss-making or in a net liability position, will be subject to listing rules
  • Companies will need to appoint an independent valuer for significant asset disposals
  • Firms will be asked to disclose material price- and trade-sensitive information, and any changes to near-term earnings prospects

The latest disclosure requirements will enhance investor protection, said David Gerald, chief executive officer at the Securities Investors Association of Singapore. “By putting these requirements, SGX RegCo is invariably encouraging these companies to be more transparent.”

To contact the reporter on this story: Ishika Mookerjee in Singapore at imookerjee@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Marcus Wright, Russell Ward

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