SGX to scrap quarterly financial reports for most firms
SGX's new regime to kick in on Feb 7, aims to give firms more breathing room
Hundreds of listed companies will save time and money and be able to focus more on their long-term objectives after the Singapore Exchange (SGX) announced a dramatic change of rules.
The bourse said yesterday that it was planning to scrap the requirement that all companies with a market capitalisation of at least $75 million must report their earnings every three months.
This did not mean that investors would be kept in the dark as SGX said all companies must disclose significant information and developments immediately.
Once the new reporting regime kicks in on Feb 7, the quarterly reporting requirement will apply only to riskier companies - including those whose auditors have raised alarms.
Currently, almost 600 of the 850 companies listed here have to file quarterly financial reports - a task that is deemed onerous, time consuming and costly. After Feb 7, only about 100 or so companies, which will be identified by the SGX Regulation (SGX RegCo), will have to do so.
The remaining listed companies will be given more breathing room and will have to file their financial reports only every six months.
SGX RegCo chief executive Tan Boon Gin said yesterday: "Regulation needs to be more targeted, even surgical, so as to ensure compliant companies aren't overburdened while non-compliant companies receive more attention.
"Internationally, there is a shift away from quarterly reporting, and this is to allow companies to focus on the long term."
The European Union and Britain have moved away from quarterly reporting to cut the time and costs that these statements require.
Still, safeguards have been built in, especially for firms deemed at risk.
Mr Tan said: "Some companies face immediate challenges and need to focus on the short term to solve their problems. These are the companies that should be made to do quarterly reporting. Size-based quarterly reporting does not achieve this outcome."
Singapore Business Federation (SBF) chief executive Ho Meng Kit welcomed the move.
"SBF has always held the view that rules and regulations should not overburden businesses and, as result, divert their attention from their main focus of value creation," he said.
The Monetary Authority of Singapore said: "Ultimately, what is important is that companies and their boards must seek to conduct meaningful and regular engagement with their stakeholders, keeping them well-informed through timely, pertinent and high-quality disclosures."
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