1. Today’s topic was really what kind of regulation do you want anyway. As you have seen from the preceding discussion, different people have different views.
Guiding principles
2. How do we reconcile all these different views? It’s never easy, trust me, but there are certain principles that guide us, which I would like to share with you today.
Singapore style disclosure based regime
3. First, we operate a disclosure based regime, but it is not the kind of disclosure based regime that you find in the West. We have more retail investors here in Singapore. We have fewer, less activist institutional investors. The culture here is less litigious. There are no class action law suits, no lawyers’ contingency fees. Market discipline is therefore weaker here.
4. To even things up, regulatory discipline has to be stronger. In other words, the regulator has to be more active in its actions to protect the interest of investors. In effect, you could say we operate a disclosure plus regime, or a disclosure based regime, but Singapore style.
Targeted approach to regulatory action
5. Second, whatever action that we take must be targeted against non-compliant companies without unnecessarily burdening the compliant ones. We want our deserving companies to succeed so that investors can share in their success.
6. As Cheng Han mentioned earlier, when something bad happens, there is always pressure to do something quickly. The risk of a kneejerk reaction is that we introduce rules that are too blunt and over-inclusive. Rather, what we need to do is take the time to drill down to the root cause and carefully calibrate our rules so that they do no more than is necessary to address the problem.
7. For example, in the UK they require the appointment of a second auditor for all index-linked companies. But for us, we are only proposing the appointment of a second auditor only there these is a big problem, only where the company is non-compliant.
Rule of law
8. Finally, whatever we do we have to abide by the rule of law. Whenever something goes wrong, there is always pressure to immediately take enforcement action and hold somebody accountable. I fully believe in the need for accountability. Indeed, accountability is the cornerstone of regulatory discipline. But there is a due process that needs to be followed and we cannot and will not cut corners in the administration of justice.
9. Speaking of law enforcement, when I was in the Commercial Affairs Department, several years ago now, I declared my intention for CAD to be an intel led agency, and I built up the strength of our Financial Intelligence Unit, also known as the Suspicious Transaction Reporting Office.
10. In the same vein, one area that we are targeting for improvement, is our engagement with whistleblowers. After all, whistleblowers are in their own way, reporting their suspicions. We are in the process of strengthening our protocols and establishing a dedicated whistleblowing office to encourage whistleblowers to come forward with evidence of corporate malfeasance.
Listening to multiple views
11. I want to round off my remarks by reflecting on three things that came to mind as we put this symposium together and also as the discussions unfolding.
12. First, what is clear from today’s round-table is that the market is made up of many voices and opinions from the various stakeholders. Sometimes, it may seem as if there’s only one view. This may happen because one person, or one stakeholder group, is shouting louder than anyone else. But as you have seen for yourselves, there are probably as many views as there are stakeholders in the market. It is therefore important for us to recognize that more than one view exist, and that all these views matter.
13. Second, just because someone is shouting the loudest, does not mean that that is the best view, or even the most prevalent view. More importantly, just because you shout the loudest does not mean you will get your way. It is our responsibility to make sure that we hear views from everyone first and make the final call after that. But for those with other views, it is also your responsibility to make yourselves heard if you disagree with the loudest voice in the room.
14. Finally, when an individual or a stakeholder group engages with us, as far as the person or group of persons is concerned, this is the view. I’m sure that from this person or this group’s standpoint, the answer must seem blindingly obvious and straightforward. But this is just a one-to-one view.
15. SGX RegCo as many of you are aware, engages with many individuals and many stakeholder groups on a daily basis. In fact, what you have heard today from the various stakeholders is a good example of what we the regulator has to listen to all the time.
16. In other words, we have to deal with not a one-to-one view, but one-to-many views. From that standpoint, and as you can tell from what has just been discussed, the answers are never straightforward and the job of balancing all these multiple views, diverse interests and feedback is a complex one.
Conclusion
17. On that note, I want to thank everyone – especially all the speakers at today’s round-table - for gamely taking on today’s discussion and being so enthusiastic with your participation. We have heard from representatives of various stakeholder groups today which have been quite reticent in the past. My team and I look forward to engaging with and hearing from all of you in future, in private engagements and just as importantly, in the public sphere. Thank you very much.
