Letters to Editor
Published Date: 30 January 2005

Response to "The CAO Derivatives Fiasco -Fools rush in" (The Economist, 11 December 2004)

Dear Sir,

"The CAO Derivatives Fiasco - Fools rush in" (The Economist, 11 December 2004) asserts that the Singapore Exchange "loosened its disclosure rules a few years ago."  In fact, Singapore has strengthened its disclosure, accounting and corporate governance standards in recent years, in line with practices in other leading financial centres.

2   Failure by listed companies to disclose material information on a timely basis attracts criminal and civil liabilities under legislation introduced in 2002.  Large listed companies must now make quarterly financial reports.  All listed companies must explain deviations from the Code of Corporate Governance in their annual reports.

3   Singapore-incorporated companies comply with accounting standards which are essentially aligned with International Accounting Standards.  A new Accountants Act has enhanced disciplinary action against errant public accountants.

4   Singapore's financial centre has a track record for integrity, rigorous supervision and strict enforcement. The CAO case is being thoroughly investigated.  We will consider whether we need to add new rules or tighten existing ones.   However, no amount of regulation or enforcement can guarantee that companies will always comply with disclosure rules and corporate governance standards, whether in Singapore or any other financial centre.

Yours sincerely,

Shane Tregillis
Assistant Managing Director (Market Conduct)