The Singapore Exchange is about to make life easier for listed companies — at least the safer ones.
The bourse’s regulatory arm plans to end quarterly earnings reporting requirements that apply to all companies with a market capitalization of at least S$75 million (US$56 million), Singapore Exchange Regulation (SGX RegCo) chief executive officer Tan Boon Gin (陳文仁) said.
When the rule change takes effect on Feb. 7, only riskier companies would need to report earnings every three months, Tan said at a news conference.
SGX RegCo is also to tighten other disclosure rules and introduce a new whistle-blower policy as part of efforts to protect investors, Tan added.
Other global exchanges have moved away from mandating quarterly reporting for all of their companies. The EU ended its requirement in 2013, while the Hong Kong Stock Exchange only applies the rule to companies on its small-cap exchange. The US Securities and Exchange Commission is reviewing the issue.
“Internationally, there’s a shift away from quarterly reporting and this is to allow companies to focus on the long term,” Tan said.
About 75 percent of the Singapore market reports on a quarterly basis, SGX RegCo said.
Under Singapore’s new policy, a listed company would have to report each quarter 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.
Despite the new rules, most larger companies, including banks, would likely continue reporting on a quarterly basis, National University of Singapore associate professor Mak Yuen Teen (麥潤田) said.
“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 that the quarterly reporting requirements would apply to about 100 companies when the rules change. It plans to make the list public.
Other Singapore-listed companies would need to report semiannually, though the exchange would “encourage” them to provide business updates on a more regular basis, Tan said.
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