Singapore Exchange (SGX) regulator SGX RegCo is taking steps to improve public market transparency with the launch of a new whistleblowing policy and an AI stock surveillance tool.
SGX RegCo – the regulatory body that oversees SGX – plans to strengthen its current whistleblowing regime with a new policy designed to ensure the confidentiality of complainants and protection against retaliation, reports Regulation Asia.
The regulator will consult the market on the policy proposal in June, aiming to ‘institutionalize a healthy whistleblowing culture across the market by year-end,’ says Tan Boon Gin, head of SGX, in an interview with the Business Times.
SGX RegCo established a new whistleblowing office in January to encourage complainants to come forward with evidence of financial irregularities. Since setting up the whistleblowing platform, the regulator has received 13 tip-offs with some actionable information, notes Regulation Asia.
Tan points to a need to protect whistleblowers: the current Code of Corporate Governance requires issuers to tell their employees about the existence of a whistleblowing policy, but the code is not a law, so in practice there has been little to compel companies to enforce a whistleblowing policy.
Under the proposed change, whistleblowing will become mandatory for listed companies on the exchange. Tan says the strengthened policy must include ‘preservation of confidentiality’ and ‘protection against reprisals’.
AI surveillance on trading
The exchange also recently announced that it had introduced an AI-powered surveillance tool to help detect manipulative trading activity. The software learns from historical trading patterns, which enables the exchange to isolate the unusual activity and pass it on to the surveillance team for further analysis, says SGX in a statement.
According to the release, ‘the AI can also segregate instances where stock prices of certain counters are artificially maintained even as other securities and the broad markets move significantly.’
‘The successful use of AI to generate higher-quality alerts affirms that investing in new technology can result in increased efficiencies and better outcomes for investors and the market,’ says Tan in the statement.