The Singapore Exchange has a new – and experienced – weapon in its regulatory armoury.
By Melvin Yong
Lawyer, commercial crime buster and stock market regulator Tan Boon Gin has long been at the forefront of Singapore’s fight against financial crime. In June this year, he traded his role as head of Singapore’s Commercial Affairs Department (CAD) – a white-collar crime enforcement agency – for the new sleuthing task of catching stock market recalcitrants.
As the current chief regulatory officer of the Singapore Exchange (SGX), Tan plays a critical part in regulatory and enforcement functions to promote a fair, orderly and transparent market.
With degrees from the University of Cambridge in the UK and Harvard Law School in the US, Tan turned his attention to white-collar crime and corruption after taking up the role of deputy public prosecutor at the Attorney-General’s Chambers in Singapore.
Subsequent career moves saw him practise law in New York before returning to Singapore to serve as a district judge and then hold senior positions in the Monetary Authority of Singapore (MAS).
“Let me be clear, SGX won’t participate in a race to the bottom.”
“My 10 years at MAS and CAD in securities enforcement has given me a multi-dimension perspective of my current role,” he says.
Cases that go to these agencies are typically complex and can take a long time to investigate, while investors may have already suffered financial losses in the meantime.
“What I appreciate most about my new role is the ability to stop these cases from happening upstream, in what I call ‘timely intervention’,” says Tan, adding that it is one of the key strategies for his most important focus as chief regulatory officer – namely, to increase investor confidence in the regulated sector of the stock market.
Tan also believes that effective enforcement and better communications will be critical for the regulator, which is sometimes perceived by market players as being aloof.
He says SGX has started to address this by publishing regular columns on its views, governance issues and emerging trends, as well as issuing “trade with caution” warnings to the market to flag listed companies that are unable to explain unusual fluctuations in their share prices.
“SGX has, by and large, done a good job in actual regulatory work, but we can always improve how we inform and update the public,” notes Tan.
But changes will not mean lowering admission standards to attract companies to list in Singapore.
“Let me be clear,” he says, “SGX won’t participate in a race to the bottom – in fact, we are beefing up our listings application process to secure good companies.”
Tan recently led the setting up of three independent committees to advise SGX, ahead of a new disciplinary framework that took effect in October. This was a major initiative involving the private sector in a larger role to determine the types of companies that list on the SGX and what happens to those that breach listing rules.
“This is in line with our overall philosophy that, in such volatile times, quality is the strongest constant and after the dust settles it will be quality that sets us apart,” says Tan of the Singapore market regulatory regime. He feels companies need to be aware of new risks and challenges as financial markets evolve and be prepared to counter these with openness, transparency and “watertight governance”.
Melvin Yong is country head – Singapore, CPA Australia.