SGX RegCo Issues Guidance Note and Regulator’s Column to Enhance Disclosures Around Key Financial Indicators by SGX-ST Issuers

On 31 August 2023, the Singapore Exchange Regulation (“SGX RegCo“) issued the “Guidance Note on Financial Statements Disclosure” (“Guidance Note“) and “Regulator’s Column: What SGX RegCo expects of disclosures around key financial indicators” (“Regulator’s Column“) with the aim of enhancing the quality of disclosures in respect of financials by issuers listed on the Singapore Exchange Securities Trading Limited (“SGX-ST issuers“).

Guidance Note on Financial Statements Disclosure

The Guidance Note serves as an informational guide to investors and Boards of Directors, and highlights the factors that they should consider in reviewing and analysing financial statements and annual reports. It discusses examples of mitigation actions and governance practices that have been applied by some SGX-ST issuers to address three key financial indicators, namely: (i) liquidity ratios; (ii) non-current trade and other receivables; and (iii) significant advance or prepayments.

Regulator’s Column: What SGX RegCo Expects of Disclosures Around Key Financial Indicators

The Regulator’s Column also focuses on the three key financial indicators addressed in the Guidance Note. SGX RegCo highlighted that currently, most SGX-ST issuers produce “standard disclosures” in respect of the three financial indicators. The Regulator’s Column provides that when any of the three financial indicators of an issuer are at concerning thresholds, the issuer should consider adopting “substantive disclosures” on a proactive basis. This will ensure more timely disclosure of key information and minimise regulatory queries. The Regulator’s Column highlights examples of what SGX RegCo considers as “standard disclosures” and “substantive disclosures”, and sheds light on the situations in which an SGX-ST issuer is expected to make “substantive disclosures”. SGX-ST issuers should also refer to the Regulator’s Column for information to be covered in a specific scenario should “substantive disclosures” be required to be made.