Singapore Exchange (SGX)

[weijian]

This will be a huge blow to SGX as Nifty futures account for ~10-15% of total derivative volume (2nd largest after China A50 futures). SGX has put out a PR today that talks about the various actions it will take and the assurance to all market participants.

I reckon this will be 1 of the first stern test for the new CEO and his team, to see how they respond to this Indian rejection.

SGX: Will seek 'viable solutions' after India pulls support for offshore Nifty futures

THE SINGAPORE Exchange (SGX) said that it will work with the National Stock Exchange of India (NSE) to develop "viable solutions for international investors" after India's three main bourses said they would stop licensing data for offshore derivatives linked to their domestic indices.

"SGX wishes to assure market participants that we will take all measures to maintain orderly trading and clearing of SGX India equity derivatives for our international clients," SGX said in a statement.

"We will work closely with NSE, the market participants and the regulators, over the next several months to develop viable solutions for international investors into India."

India's three main stock exchanges - NSE, the Bombay Stock Exchange (BSE), and the Metropolitan Stock Exchange of India (MSEI) - said on Friday that they will stop licensing their securities or sharing data with foreign exchanges in a bid to prevent trading volumes from leaking overseas.

http://www.businesstimes.com.sg/companie...hore-nifty


SGX 11th Feb response:
http://infopub.sgx.com/FileOpen/20180211...eID=488609

This is probably a win-win situation for everyone involved - GIFT gets connected to international liquidity (that is 10x bigger than it is) while SGX continue to earn the fees through clearing.

The tussle between SGX and NSE reminds me of the tussle between Netflix (platform provider) vs Disney/WarnerMedia/20th Century Fox (content providers). While "content is king" (NSE), but the platform provider (SGX) owns the customer relationship and if there is big enough demand (network effect of sorts), the platform provider (SGX) has enough bargaining power to squeeze its suppliers. As what has happened at Netflix whom are going into originals, SGX Edge is also about creating "content" now.

SGX, NSE aim to trade Nifty products via Gift City by end-2020
https://www.businesstimes.com.sg/stocks/...y-end-2020

[fanobell]

Maybe SG offered these deals to India... in exchange for Nifty settlement
1) Recruit more Indian pilots for SIA
2) Singtel inject more $ into Bharti
3) Continue to allow high number of Indian engineers to work here, via CECA

India is a tough country to work with...I guess Indian gov is trying to prevent Indians parking their money here... by cutting away the ties with Nifty... that will reduce money outflow from India.

[weijian]

Maybe SG offered these deals to India... in exchange for Nifty settlement
1) Recruit more Indian pilots for SIA
2) Singtel inject more $ into Bharti
3) Continue to allow high number of Indian engineers to work here, via CECA

India is a tough country to work with...I guess Indian gov is trying to prevent Indians parking their money here... by cutting away the ties with Nifty... that will reduce money outflow from India.

hi fanobell,
There seems to be a tink of xenophobism in your post. Noted that you seem to be new to VB.com and would like to iterate that such posts are not appropriate here.

Let's just focus on the business, no matter the background or experience we have had.

Moderator

[weijian]

With this tie up at SISV and IVAS, would it be a valid attempt to close the loop and reduce occurrences of what we discussed in Sabana REIT once?

Sabana: https://www.valuebuddies.com/thread-255-...#pid142304

SGX RegCo strengthens cooperation with Singapore Institute of Surveyors and Valuers and Institute of Valuers and Appraisers, Singapore

Under the terms of the MOU, SGX RegCo may seek SISV’s advice on any concerns about property valuation reports or disclosures made by listed companies or listing applicants on valuations. SISV will provide expert advice and support in reviewing whether property valuation reports are conducted and prepared in compliance with its valuation reporting guide which was launched in 2018 in collaboration with SGX RegCo, and applicable standards and practices guidelines. The cooperation will include referrals of valuations of concern to SISV.  Both SGX RegCo and SISV will also cooperate in setting standards and guidance relating to real estate valuation and disclosures in the SGX Listing Rules or relevant codes and standards, where appropriate.

Further to the 11 January 2019 MOU between the Singapore Accountancy Commission (SAC) and SGX RegCo, an addendum was also signed for SGX RegCo to give case information to Institute of Valuers and Appraisers, Singapore (IVAS) for it to assess whether the Codes and Standards applied were upheld in the valuation of businesses. The collaboration will raise the standing of the valuation profession as well as the quality of valuations performed.

https://links.sgx.com/FileOpen/20191015_...eID=581833

[karlmarx]

Many corporate governance issues cannot be so easily solved through reactive tit-for-tat treatments.

Board of public companies abusing their fiduciary duties towards minority shareholders? Apply Independent Directors.
Management/Accountants of public companies overstating assets/profits on their financial statements? Apply external auditors.
Market manipulators exercising control through third party trading accounts? Disable third party authorisations.

This latest move by SGX is simply saying to the valuers, "We have our eyes on you." I believe this will deter the valuers from over-doing their valuations. But if the investing community is expecting the valuers to behave in a manner which is detrimental to the companies that hire them, then they will be disappointed. Yet, this is probably the as far as SGX can go without being criticised as an overbearing regulator.

The best defense for minority shareholder is education and skepticism. Or, if you have your money in an honest company, all the better. It is not realistic to expect the government/authorities/regulators to rid the capital markets of dishonest behaviour.

[dreamybear]

Enhancing protection for minorities during times of corporate distress
Mon, Oct 21, 2019 - 5:50 AM

SECTION 211B of the Singapore Companies Act was amended in 2017 as part of a major overhaul of Singapore's corporate restructuring and insolvency laws in order to make it easier for companies, especially those with creditors from around the world, to be rescued and rehabilitated. The move was part of a concerted effort by local authorities to boost Singapore's bid to position itself as a global debt restructuring hub.

The Securities Investors Association Singapore (Sias) would like to propose two initiatives that would complement this bid.

First, since Sias has been actively involved in the debt restructuring efforts of several financially troubled companies over the past few years and has amassed considerable experience in this area, a mechanism should be installed whereby companies have to approach Sias when they find themselves in need of restructuring and at the same time, Sias is granted official standing to act on behalf of stakeholders in court.

Second, consideration should be given to setting up a fund or insurance policy that would provide money for legal and financial advice for investors, who typically are left to fend for themselves when companies they have invested in find themselves in financial distress.......

https://www.businesstimes.com.sg/compani...e-distress

[Shiyi]

Enhancing protection for minorities during times of corporate distress
Mon, Oct 21, 2019 - 5:50 AM

SECTION 211B of the Singapore Companies Act was amended in 2017 as part of a major overhaul of Singapore's corporate restructuring and insolvency laws in order to make it easier for companies, especially those with creditors from around the world, to be rescued and rehabilitated. The move was part of a concerted effort by local authorities to boost Singapore's bid to position itself as a global debt restructuring hub.

The Securities Investors Association Singapore (Sias) would like to propose two initiatives that would complement this bid.

First, since Sias has been actively involved in the debt restructuring efforts of several financially troubled companies over the past few years and has amassed considerable experience in this area, a mechanism should be installed whereby companies have to approach Sias when they find themselves in need of restructuring and at the same time, Sias is granted official standing to act on behalf of stakeholders in court.

Second, consideration should be given to setting up a fund or insurance policy that would provide money for legal and financial advice for investors, who typically are left to fend for themselves when companies they have invested in find themselves in financial distress.......

https://www.businesstimes.com.sg/compani...e-distress

All along, SIAS has been saying that it prefers to deal with company management at the boardroom instead of court room.
Now it wants to be granted official standing to act on behalf of stakeholders in court. And companies undergoing restructuring "have to approach SIAS".

Does SIAS bite off more than it can chew?

[cyclone]

Mapletree Logistics Trust to be added to the STI

FTSE Russell announces that there will be one change to the constituents of the Straits Times Index (STI), following the December quarterly review. Mapletree Logistics Trust will be added to the index and, as a result, Golden Agri-Resources will be excluded.

The STI reserve list, comprising the five highest ranking non-constituents of the STI by market capitalisation, will be (in order of size) Suntec REIT, Mapletree Industrial Trust, Keppel REIT, Mapletree North Asia Commercial Trust and NetLink NBN Trust. Stocks on the reserve list will replace any constituents that become ineligible as a result of corporate actions, before the next review. A full list of STI constituents can be found on the website.

More details in https://links.sgx.com/FileOpen/20191205_...eID=589556

[cyclone]

SGX named "Exchange of the Year - Asia Pacific" at FOW International Awards 2019

Singapore Exchange (SGX) has been named "Exchange of the Year - Asia Pacific" for the fourth time in five years at the annual Futures & Options World (FOW) International Awards. The awards recognise the best in growth and innovation across the global derivatives market.

The awards are judged by a panel of industry experts drawn from across the market in a range of disciplines. Judges this year cited SGX's steady pace of innovation across the 12 months as a key driver behind its success, highlighting in particular its customisable exchange-traded FX futures - SGX FlexC.

More details in https://links.sgx.com/FileOpen/20191211_...eID=590066

[cyclone]

SGX RegCo Adopts Risk-based Approach to Quarterly Reporting, Mandates More Robust Disclosures on Matters of High Impact

Singapore Exchange Regulation (SGX RegCo) will apply quarterly reporting (QR) requirements only for companies associated with higher risks while strengthening continuous disclosure requirements on all listed companies. These changes are part of continuing efforts by SGX RegCo to enhance its regulatory regime by taking a  more targeted approach. SGX RegCo will also make explicit the scenarios where material information must be disclosed on a timely basis.

The risk-based approach to QR replaces the current reporting requirement based on companies meeting a certain minimum market capitalisation, an approach which market participants have deemed as being too arbitrary and not meaningful in targeting companies that should be doing more frequent reporting. This brings us in line with other global markets, including Hong Kong, Australia, the U.K. and other E.U. countries.

A risk-based approach is more appropriate because it targets companies that are of greatest concern to regulators and investors, enabling more effective monitoring of how their concerns are being addressed. In contrast, a reporting requirement based on market capitalisation would not necessarily cover these companies.

Under the new approach, a company will have to report its financials on a quarterly basis if:
* It has received a disclaimer of opinion, adverse opinion or qualified opinion from its auditors on its latest financial statements;
* Its auditors have expressed a material uncertainty relating to going concern on its latest financial statements; or
* SGX RegCo has regulatory concerns with the company, for example if it has had material disclosure breaches or where it faces issues that have material financial impact.

All other companies need only do semi-annual reporting though they are encouraged to consider providing voluntary business updates to shareholders in between their half-yearly financial reports. Companies should consider their investors’ expectations, their competitive environment and their long-term business strategy when deciding whether to provide these voluntary updates.

In addition, SGX RegCo is strengthening continuous disclosures requirements in areas that are of high investor interest such as interested person transactions (IPTs), significant financial assistance, significant transactions and secondary fund-raising. Among others, the following will be implemented:
* SGX RegCo will have powers with respect to IPTs to deem a person or entity an “interested person”, and aggregate separate IPTs entered into during the same financial year and treat them as if they were one transaction, in appropriate circumstances;
* Requiring a competent and independent valuer to be appointed for significant asset disposals;
* Requiring additional disclosure for rights issues, including a Board statement on why the rights issue is in the company’s interest, particularly if the company conducts a rights issue within one year from its previous equity fund-raising; and
* Extending the need for disclosure and shareholders' approval for the provision to third parties of significant financial assistance which is not part of the company’s ordinary course of business.

These amendments will safeguard investors’ interests in matters where they have indicated the greatest concern.

Further, SGX RegCo is making explicit that disclosure obligations apply not just to materially pricesensitive information but also trade-sensitive information. SGX RegCo has therefore issued new guidance to issuers on situations requiring timely disclosure of material information.

SGX RegCo also set out its expectations on companies’ handling of material information, including making immediate announcements where there is a change in the issuer’s near-term earnings prospects or where there are ongoing developments.

The rules come after public consultations conducted in 2017 and 2018, and intensive engagements with stakeholders.

SGX RegCo has also established a whistleblowing office to more effectively address any tipoffs, feedback, complaints and short-seller reports on companies.

More details in https://links.sgx.com/FileOpen/20200109_...eID=592840