SGX Leverages RegTech to Strengthen Oversight of Listed Issuers

Singapore Exchange Regulation (SGX RegCo), a wholly-owned subsidiary of Singapore Exchange​ (SGX), announced that it is introducing the use of artificial intelligence and other RegTech solutions to strengthen its oversight​ of listed issuers.

The solutions will help automate the extraction of data that can then be used to compute certain indicators of financial risks. The indicators are based on SGX RegCo's observations of indicative signs of possible financial distress or irregularities in listed companies. These include, among others, the existence of long outstanding trade receivables, significant asset write-offs, low cash coverage ratio and negative working capital. 

SGX RegCo is expanding the solutions to include machine learning techniques and additional information sources with a view to improving predictive capabilities in these areas.

"Using artificial intelligence and other technology, SGX RegCo is adapting information from companies' disclosures into structured data that can be analysed and used easily and speedily. The automation of such processes directs regulatory resources to higher risk areas  and enables us to be more targeted in our regulatory responses," said Tan Boon Gin, CEO of SGX RegCo.

"We could, for example, issue disclosure queries taking into account these indicators, and where necessary, engage with the audit committee and external auditors. This together with issuers' responses will provide transparency to investors on signs of possible financial distress or irregularities in listed companies," Mr Tan added.