OREANDA-NEWS. Singapore Exchange (SGX) will establish a separate subsidiary company (RegCo) to undertake all the front-line regulatory functions it currently performs. The move aims to further enhance the governance of SGX as a self-regulatory organisation (SRO) by making more explicit the segregation of its regulatory functions from its commercial and operating activities.

RegCo will be governed by a Board of directors separate from that of SGX. The Chairman of RegCo’s Board and a majority of its directors will be independent of SGX and its regulated subsidiaries including SGX-Securities Trading, SGX-Derivatives Trading, Central Depository and SGX-Derivatives Clearing. All directors of RegCo will also be independent of any other corporation listed on SGX. RegCo will be responsible for discharging all of SGX’s market regulatory and supervisory functions and will report to its own Board in this respect. The Chief Regulatory Officer of SGX will be the CEO of RegCo and report directly to RegCo’s Board.

The SRO model is widely adopted by exchanges globally albeit in different forms. SGX closely monitors developments in the SRO area and regularly considers enhancements to assure continued regulatory robustness. Following the setting up of the independent Listings Committees in October 2015, the establishment of RegCo will add to the safeguards in place to ensure high governance standards in the regulation and operation of SGX markets.

The establishment of RegCo will not add to the requirements of the current IPO listing process. This is consistent with ongoing efforts to rationalise regulatory functions performed by MAS and SGX.

MAS will continue to directly regulate SGX in terms of its obligations as a listed company and market operator, as well as maintain oversight of SGX’s regulatory responsibilities as performed by RegCo. SGX will be directly accountable to MAS for ensuring the adequate provision of resources to RegCo in order for it to discharge its regulatory functions. SGX expects to set up RegCo by the second half of 2017.