RES 1BE1 – Add-on Module for Singapore Exchange – Securities Trading Limited

Correct: REITs must comply with the MAS Property Funds Appendix, which mandates specific leverage limits and high distribution ratios for tax transparency. Business Trusts are governed by the Business Trusts Act and offer more operational flexibility regarding distributions.

Incorrect: The strategy of assuming identical gearing caps for all trust structures ignores that Business Trusts are not bound by the same MAS leverage limits as REITs. Relying on the belief that Business Trusts have a mandatory 90% distribution requirement misinterprets the Business Trusts Act’s more flexible cash-flow-based approach. Choosing to categorize Business Trusts as inherently safer due to capital reserves overlooks the potential for higher financial risk given their less restrictive regulatory environment.

Takeaway: Differentiating between the MAS-regulated REIT framework and the Business Trusts Act is essential for constructing compliant and risk-aware portfolios on the SGX-ST.

Correct: Evaluating management quality and corporate governance is essential as these qualitative factors directly influence investor confidence and long-term valuation. Under the SGX Listing Rules and the Code of Corporate Governance, the board must ensure effective oversight of management. Transparency in interested person transactions is also critical to protect minority shareholders. Assessing the successor’s history and the MAS investigation provides a comprehensive view of the company’s risk profile. This approach aligns with the fiduciary duty to provide informed investment analysis.

Incorrect: Focusing primarily on historical financial performance fails to account for the forward-looking risks introduced by new leadership and potential regulatory breaches. The strategy of prioritizing quantitative metrics while treating management changes as neutral ignores the significant impact leadership transitions have on market sentiment. Relying on past audit reports to dismiss current qualitative risks is flawed because audits do not guarantee future compliance. Pursuing a strategy that assumes the investigation is merely administrative overlooks the potential for significant reputational damage and financial penalties.

Takeaway: Qualitative assessment must integrate management integrity, governance standards, and regulatory compliance to accurately gauge risks to a company’s share price.

Correct: Statement I is correct because the MAS Guidelines on Fair Dealing require representatives to ensure investment recommendations are suitable for the client’s specific risk profile. Statement III is correct as SGX-listed REITs are structured to distribute at least 90% of taxable income, offering a predictable yield for retirement planning. Statement IV is correct because maintaining an emergency fund is a foundational principle of financial planning to prevent forced liquidation of securities during market downturns.

Incorrect: The combination including the assertion that individual equities are capital-guaranteed is incorrect because securities traded on SGX-ST carry market risk and potential loss of principal. Relying on the idea that direct equity investment is a low-risk substitute for fixed deposits ignores the volatility inherent in the stock market. The strategy of prioritizing securities trading over emergency fund liquidity fails to meet the holistic financial needs of a client. Focusing only on capital appreciation without considering the income-generating potential of REITs overlooks a key component of diversified financial planning.

Takeaway: Securities trading must be integrated into a financial plan by balancing growth objectives with risk tolerance, liquidity, and income needs.

Correct: Post-Earnings Announcement Drift (PEAD) suggests that market prices do not adjust instantaneously to new information, which challenges the semi-strong form of market efficiency. Under Singapore’s Securities and Futures Act (SFA) Section 197, firms must ensure that automated strategies intended to exploit such anomalies do not inadvertently create a false or misleading appearance of active trading. Evaluating whether the drift is a risk premium or a behavioral inefficiency is essential for determining the strategy’s long-term viability and regulatory risk profile.

Incorrect: The strategy of treating the anomaly as a guaranteed arbitrage opportunity fails to account for the risk that the pattern may disappear during periods of high market volatility. Focusing only on the disposition effect and mean reversion overlooks the possibility that the earnings surprise represents a fundamental shift in the company’s valuation that justifies the price drift. Choosing to dismiss the observation as data mining without further investigation may cause the firm to miss legitimate alpha opportunities arising from structural market frictions on the SGX.

Takeaway: Successful anomaly exploitation requires distinguishing between behavioral inefficiencies and risk premiums while maintaining compliance with SFA market conduct rules.

Correct: Statement I is correct as SGX-ST Listing Rule 703 requires immediate disclosure of information necessary to avoid a false market. Statement II is accurate because Rule 703(3) provides a specific exception for incomplete proposals or negotiations where confidentiality is maintained. Statement IV correctly identifies the statutory requirement under the Securities and Futures Act for substantial shareholders to notify both the issuer and MAS within two business days.

Incorrect: The assertion regarding a five-day notification period for directors is incorrect because the Securities and Futures Act mandates a stricter two-business-day reporting window. Relying on the belief that all material information must be disclosed immediately without exception fails to account for the safe harbor for confidential negotiations. The strategy of excluding the dual reporting requirement for substantial shareholders is flawed as they must notify both the regulator and the exchange. Focusing only on the issuer’s obligations while ignoring the specific statutory timelines for directors leads to regulatory non-compliance.

Takeaway: Singapore listed entities and stakeholders must report material information immediately and disclose shareholding changes within two business days to ensure market transparency.

Correct: Under SGX-ST Listing Rule 703, an issuer must disclose material information immediately if there is a leak or rumor causing unusual market activity. Requesting a trading halt is the appropriate mechanism to prevent an uninformed market while the company prepares a comprehensive announcement. This action aligns with the Corporate Disclosure Policy to ensure all investors have equal access to price-sensitive information. Maintaining an orderly market takes precedence over the company’s preference to wait for final legal signatures.

Incorrect: Relying solely on the finality of legal signatures fails to address the immediate market distortion and potential for insider trading created by the leak. The strategy of issuing a non-committal statement is insufficient when specific, accurate rumors are already impacting the share price significantly. Focusing only on internal leaks and employee monitoring ignores the primary regulatory obligation to provide public clarity during unusual price movements. Choosing to prioritize deal confidentiality over market transparency violates the fundamental disclosure principles of the Singapore Exchange.

Takeaway: Listed companies must immediately request a trading halt or disclose information when rumors cause significant, unusual market activity.

Correct: Statement I is accurate because MAS requires financial institutions to notify them of critical technology incidents within three hours of discovery. Statement II is correct as SGX-ST Listing Rule 703 mandates immediate disclosure of any information likely to materially affect the price of securities. Statement IV correctly identifies the mandatory requirement under MAS Notice 655 for multi-factor authentication on all administrative accounts with access to critical systems.

Incorrect: The strategy of requiring a 24-hour notification for all data breaches is incorrect because the PDPA provides a 72-hour window for notifiable breaches. Relying on the assumption that every minor security incident must be reported to the PDPC is inaccurate as reporting is only mandatory for breaches meeting specific harm or scale thresholds. Choosing to exclude the cyber hygiene requirement fails to recognize that multi-factor authentication is a legally binding mandate for Singaporean financial institutions. Focusing only on SGX disclosure ignores the separate and immediate regulatory reporting obligations to the Monetary Authority of Singapore.

Takeaway: Firms must report critical cyber incidents to MAS within 3 hours and notifiable data breaches to the PDPC within 72 hours.

Correct: SGX-ST utilizes a dynamic circuit breaker mechanism for specific securities, including Straits Times Index components and REITs. This mechanism triggers a five-minute cooling-off period if a potential trade price deviates more than 10% from the reference price. This regulatory safeguard ensures orderly price discovery and prevents excessive volatility during periods of global market stress. It allows market participants to digest information and adjust their orders before trading resumes in the continuous session.

Incorrect: Relying on direct intervention by the Monetary Authority of Singapore to stabilize equity prices is incorrect as the regulator does not manage individual stock price levels. The strategy of expecting a market-wide trading halt for a 5% index drop is inaccurate because SGX-ST employs security-specific circuit breakers rather than index-level halts. Focusing only on the Force Order range is insufficient because this feature is designed to prevent input errors rather than managing systemic volatility or price discovery. Pursuing a strategy based on automatic suspension of all derivatives trading is also incorrect as equity market circuit breakers operate independently of the derivatives clearing house rules.

Takeaway: SGX-ST manages extreme volatility through security-specific dynamic circuit breakers that trigger cooling-off periods to ensure orderly price discovery.

Correct: Identifying patterns such as wash trades or marking the close is a critical requirement under Section 197 of the Securities and Futures Act. This proactive approach ensures that the firm complies with SGX-ST Market Surveillance expectations regarding the detection of false trading. Documentation and escalation to the Compliance Department facilitate the necessary regulatory reporting to the exchange and the Monetary Authority of Singapore.

Incorrect: The strategy of increasing trading limits based on high volume fails to address the potential for market rigging or price manipulation. Choosing to advise clients on how to avoid triggering automated alerts is highly inappropriate as it may constitute assisting in market abuse. The method of waiting for an official exchange query before acting ignores the firm’s independent obligation to monitor and report suspicious activities. Focusing only on price volatility while ignoring volume-based anomalies overlooks key indicators of non-beneficial ownership changes.

Takeaway: Professionals must monitor volume anomalies for signs of market manipulation and escalate suspicious patterns to ensure compliance with Singapore’s Securities and Futures Act.

Correct: Statement I is correct because the Pre-open and Pre-close phases on SGX-ST use the Indicative Equilibrium Price (IEP) mechanism to determine opening and closing prices without immediate execution. Statement III is correct as it reflects the continuous disclosure obligation under SGX Listing Rule 703, which requires issuers to announce material information to prevent a false market.

Incorrect: The strategy of claiming bonus issues require consideration is incorrect because bonus issues are free shares capitalized from a company’s reserves. Relying on the assertion that market making is prohibited for ETFs is inaccurate as SGX actively utilizes market makers to provide liquidity for these instruments. Focusing only on immediate execution ignores the batch processing nature of the Pre-open and Pre-close sessions used to establish market equilibrium.

Takeaway: SGX-ST mandates continuous disclosure for market transparency and utilizes specific non-trading phases to establish fair opening and closing prices.

Correct: Singapore operates under a one-tier corporate tax system where the tax paid by a resident company on its chargeable income is final. Consequently, dividends distributed by such companies are tax-exempt for all shareholders. This framework eliminates the double taxation of corporate profits at both the company and shareholder levels. It applies to all shareholders regardless of their tax residency status or whether they are individuals or corporations.

Incorrect: The strategy of using tax credits to offset personal liabilities describes the obsolete imputation system which was phased out in Singapore years ago. Relying solely on a distinction between cash and scrip dividends for taxability is incorrect because both forms are generally exempt under the one-tier regime. Choosing to apply a mandatory holding period for tax exemption misinterprets Singapore law, as no such minimum duration exists for domestic dividend exemptions. Focusing only on residency-based withholding tax for local dividends ignores the fundamental principle that one-tier distributions are exempt for both residents and non-residents.

Takeaway: Under Singapore’s one-tier system, dividends from resident companies are tax-exempt for shareholders because the company’s tax payment is final.

Correct: Statement I is correct as SGX Listing Rule 703 mandates immediate disclosure of material information to maintain market integrity. Statement II is correct because the Code of Corporate Governance Provision 2.2 requires a majority of independent directors when the Chairman is not independent. Statement III is correct as SGX Listing Rule 707(1) specifies that Mainboard issuers must hold their Annual General Meeting within four months of the financial year end.

Incorrect: The strategy of treating the Code of Corporate Governance as a mandatory statute with criminal penalties is incorrect because it operates on a comply or explain basis. Relying on combinations that exclude the immediate disclosure requirement fails to recognize the fundamental obligation to prevent false markets. Focusing on options that omit the majority independent director requirement ignores specific board composition protections for non-independent chair scenarios. Choosing combinations that suggest AGMs can be delayed beyond four months contradicts the strict timelines set in the SGX-ST Listing Rules.

Takeaway: SGX issuers must adhere to strict disclosure timelines and board independence requirements while applying the comply or explain governance framework.

Correct: Statements I, II, and III accurately reflect SGX-ST rules. The Equilibrium Price maximizes tradable volume during auctions. Price-Time priority ensures fairness for earlier entries. Market-to-Limit orders provide immediate execution at the best price before becoming limit orders.

Incorrect: The strategy of including Statement IV is incorrect because the Non-Cancel phase prohibits any amendments or cancellations of orders. Relying solely on Statements I and II ignores the valid regulatory definition of Market-to-Limit orders in Singapore. Focusing only on combinations with Statement IV fails to recognize that this phase is designed to prevent price manipulation before the market opens. Choosing to exclude Statement III misses the fact that Market-to-Limit orders are a standard execution mechanism on the SGX-ST platform.

Takeaway: SGX-ST utilizes equilibrium pricing and price-time priority, while the Non-Cancel phase strictly prohibits any order modifications to maintain market integrity.

Correct: Statement I is correct because SGX-ST surveillance uses historical price and volume baselines to identify anomalies that trigger Unusual Market Activity queries. Statement II is accurate as Section 197 of the Securities and Futures Act identifies transactions with no change in beneficial ownership as false trading. Statement III is correct because SGX-ST Listing Rules require issuers to correct and restate historical financial information if material errors are discovered to maintain market integrity.

Incorrect: The strategy of suggesting SGX-ST lacks independent surveillance authority is incorrect because the exchange acts as a front-line regulator alongside the Monetary Authority of Singapore. Focusing only on price movements while ignoring beneficial ownership changes fails to account for specific statutory prohibitions against wash trading. Relying on the assumption that historical financial statements never require restatement ignores mandatory disclosure obligations under Singapore Financial Reporting Standards. Pursuing an analysis that excludes SGX-ST’s role in market monitoring contradicts the co-regulatory framework established in Singapore.

Takeaway: SGX-ST performs front-line surveillance using historical data to detect market misconduct and ensure compliance with the Securities and Futures Act.

Correct: SGX-ST Listing Rules allow placements under a general mandate for efficiency, typically capped at 20% for non-pro-rata issues. Renounceable rights issues protect existing shareholders by providing tradable rights to mitigate dilution effects.

Incorrect: The strategy of requiring an EGM for every placement ignores the flexibility provided by the general mandate for issuances within prescribed limits. Focusing only on institutional investors for rights issues contradicts the fundamental principle of pro-rata participation for all existing shareholders. Pursuing a requirement that issues over 10% must be non-renounceable misinterprets the Listing Rules regarding capital raising structures and shareholder protections.

Takeaway: Placements provide speed via general mandates, while renounceable rights issues protect retail shareholders through tradable entitlements.

Correct: Statements I, II, and III are correct under SGX-ST market rules. The Indicative Equilibrium Price (IEP) is published in real-time during auction phases to enhance price discovery transparency. The Non-Cancel Session prevents market manipulation by prohibiting the withdrawal or amendment of orders just before the auction match. The Trade-at-Close (TAC) session allows for additional volume to be transacted at the established closing price.

Incorrect: The assertion that the Mid-Day Break prohibits all order management is incorrect because the system accepts order entries, amendments, and cancellations during this time. Focusing only on the morning and evening sessions ignores the fact that matching is the only function suspended during the break. The strategy of claiming the market is completely frozen misrepresents the operational flexibility provided to participants between 12:00 and 13:00. Choosing to include the fourth statement fails to distinguish between trade matching and order book management.

Takeaway: SGX-ST uses auction phases with non-cancel periods and a trade-at-close session to ensure orderly price discovery and market integrity.

Correct: Analyzing the reconciliation between net profit and operating cash flow is essential because accounting profits often include non-cash items like property revaluations. Under Singapore Financial Reporting Standards, operating cash flow provides the most accurate representation of the actual cash generated to sustain distributions. This approach ensures the Trading Representative evaluates the entity’s liquidity rather than just its accounting performance.

Incorrect: Evaluating total asset values on the Balance Sheet fails because net asset value reflects market valuations rather than the liquid cash required for distributions. Relying on gross revenue trends in the Income Statement is insufficient as it ignores significant operating expenses and non-cash accounting entries. The strategy of focusing on financing activities to fund distributions is unsustainable and represents a risk to long-term solvency by using debt for payouts.

Takeaway: Always distinguish between accounting profit and operating cash flow to accurately assess a listed entity’s ability to sustain its financial distributions.

Correct: Statements II, III, and IV are correct under Singapore’s regulatory framework. Structured warrants are issued by third-party financial institutions rather than the underlying company. Most structured products on SGX are classified as Specified Investment Products (SIPs) under MAS guidelines. This classification requires intermediaries to perform a Customer Knowledge Assessment (CKA) for retail investors. Furthermore, the payoff of these products is inherently linked to the performance of underlying reference assets like indices.

Incorrect: The assertion that Daily Leverage Certificates (DLCs) are suitable for long-term wealth accumulation is incorrect. DLCs feature a daily reset mechanism that makes them appropriate only for short-term or intraday trading. Relying on the idea that compounding benefits long-term holders ignores the risk of value erosion in volatile markets. The strategy of holding leverage products over multi-year horizons contradicts the product’s design and SGX educational guidelines. Focusing only on the leverage factor without considering the daily reset leads to significant financial risk.

Takeaway: Structured products on SGX are typically SIPs with underlying-linked payoffs, while leverage products like DLCs are strictly for short-term trading.

Correct: The Central Depository (CDP) and SGX-ST rules restrict off-market transfers to specific approved categories to maintain market transparency and prevent money laundering. Intermediaries must verify that the transfer reason is legitimate and supported by documentation. This approach aligns with the Securities and Futures Act and MAS AML/CFT requirements. It ensures the depository system is not used to bypass regulated trading venues without valid legal or beneficial ownership justifications.

Incorrect: Facilitating the transfer based solely on the client’s high-net-worth status ignores the regulatory restrictions on off-market movements and fails to address potential financial crime risks. The strategy of advising a nominal-price cross-trade is highly problematic as it may constitute market manipulation or a wash sale under the Securities and Futures Act. Choosing to reject the request immediately is overly restrictive because CDP does allow off-market transfers for specific, valid reasons provided the correct procedures are met. Focusing only on verbal explanations without verifying supporting documents fails to meet the standard of care required for depository services.

Takeaway: Off-market transfers in CDP require strict adherence to approved categories and robust documentation to prevent regulatory breaches and financial crime.

Correct: SGX Listing Rule 703 requires immediate disclosure of information that could materially affect the price or value of securities. When confidentiality is lost or unusual trading activity occurs, the issuer must clarify the situation immediately. This often necessitates a trading halt to prepare a comprehensive announcement for the market.

Incorrect: The strategy of maintaining silence until a formal signing occurs fails because the loss of confidentiality triggers an immediate disclosure obligation under SGX rules. Choosing to issue a standard announcement claiming ignorance is inappropriate when the issuer is aware of material negotiations causing the price movement. The method of selective briefing to institutional shareholders is a serious breach of the fair disclosure principle and violates the Securities and Futures Act.

Takeaway: Loss of confidentiality during material negotiations requires an immediate clarifying announcement and potentially a trading halt to maintain a fair market.

Correct: Under the Securities and Futures Act and MAS guidelines, intermediaries must perform a Customer Account Review (CAR) before retail clients trade listed Specified Investment Products (SIPs). This process verifies if the client has the requisite knowledge or experience to understand the risks of complex, leveraged instruments. The Trading Representative must also ensure the investment is suitable for the client’s updated risk profile and financial objectives.

Incorrect: Updating the risk profile solely based on a client’s sudden request without a formal assessment fails to address the underlying suitability and knowledge requirements for complex products. The strategy of isolating speculative trades into a separate account does not absolve the representative of the duty to ensure transactions are suitable for the client’s overall situation. Choosing to rely on verbal confirmations or waivers is prohibited under MAS Fair Dealing guidelines, as retail client protections cannot be bypassed through informal agreements.

Takeaway: Trading Representatives must conduct a formal Customer Account Review (CAR) before retail clients can trade listed Specified Investment Products on SGX.

Correct: Verifying order status through independent internal units prevents duplicate executions and maintains an orderly market under SGX-ST Trading Rules. This approach aligns with MAS Guidelines on Technology Risk Management regarding system integrity. Proper documentation ensures the firm meets its operational risk obligations and provides an audit trail for regulatory reviews. This method prioritizes accuracy and market stability over the risks associated with speculative execution during system failures.

Incorrect: The strategy of proceeding with immediate entry and relying on post-trade cancellations fails because SGX-ST maintains a high threshold for trade reversals to preserve market certainty. Choosing to split orders across different accounts could inadvertently trigger market surveillance alerts for suspicious trading patterns like wash trading. The method of using personal devices to bypass firm networks violates MAS requirements for recorded communications and compromises the firm’s cybersecurity protocols. Focusing only on execution speed without confirming previous fills ignores the fundamental duty to prevent erroneous trades.

Takeaway: Prioritize trade accuracy and internal control verification over execution speed during periods of system latency or operational uncertainty.

Correct: Statements II and III are correct because they accurately describe the core tenets of Modern Portfolio Theory (MPT). A portfolio on the Efficient Frontier provides the highest expected return for a specific level of risk. Additionally, the correlation between different SGX-ST asset classes, such as REITs and equities, is the primary driver of risk reduction through diversification.

Incorrect: The strategy of claiming diversification mitigates systematic risk is incorrect because market-wide factors like interest rates affect the entire SGX-ST and cannot be diversified away. Focusing only on the lowest standard deviation fails to account for the risk-return trade-off where investors seek to maximize returns for their specific risk tolerance. Relying on the assumption that investors ignore yield is a misunderstanding of risk aversion in the MPT framework.

Takeaway: MPT focuses on optimizing the risk-return trade-off by diversifying unsystematic risk and selecting portfolios located on the Efficient Frontier.

Correct: Statement I is correct because renounceable rights issues provide shareholders the flexibility to sell their entitlements on the secondary market. Statement III is correct as the Books Closure Date is the standard regulatory mechanism for identifying eligible investors within the Central Depository. These rules ensure transparency and liquidity during corporate actions on the Singapore Exchange.

Incorrect: The method of requiring mandatory underwriting for all issues is incorrect because SGX-ST permits non-underwritten rights issues provided there are adequate disclosures regarding the use of proceeds. Choosing to prohibit excess applications is a misunderstanding of standard practice, as shareholders are generally allowed to apply for excess rights not taken up by others. Opting for the view that all rights are non-tradable ignores the specific characteristics of renounceable offerings in the Singapore market. Focusing only on pro-rata limits fails to account for the mechanism of reallocating unsubscribed shares to interested existing investors.

Takeaway: Renounceable rights issues facilitate the trading of nil-paid rights and typically allow shareholders to apply for excess shares beyond their basic entitlement.

Correct: Under SGX Listing Rule 703, an issuer must immediately disclose any information that is likely to materially affect the price or value of its securities. Disclosing through SGXNet ensures that all market participants have equal and simultaneous access to material information. This practice aligns with the Code of Corporate Governance, which emphasizes fair and equitable treatment of all shareholders. By prioritizing public disclosure, the company prevents the creation of a false market and avoids the risks associated with selective disclosure to specific investor groups.

Incorrect: The strategy of delaying the announcement until the AGM fails the regulatory requirement for immediate disclosure of material information. Prioritizing private briefings for institutional shareholders constitutes selective disclosure, which is a significant breach of fair market principles in Singapore. Relying solely on boilerplate language while withholding known material setbacks can lead to market distortion and potential enforcement action by the SGX-ST. Focusing only on providing high-level guidance to select parties creates information asymmetry and undermines the integrity of the securities market.

Takeaway: Material information must be disclosed via SGXNet immediately to ensure all investors receive the same information simultaneously and fairly.

Correct: Rising interest rates increase the discount rate applied to future cash flows, which mathematically reduces the present value of equity. For SGX-listed entities with significant leverage, such as REITs, higher interest rates also directly increase debt servicing costs. This reduces the net property income available for distribution to unitholders. Consequently, investors demand a higher yield to compensate for the increased risk-free rate, leading to downward pressure on share prices.

Incorrect: Focusing on historical P/E multiples fails because it ignores how the cost of capital fundamentally reshapes what constitutes a fair multiple during periods of monetary tightening. The strategy of relying on Net Tangible Assets as a valuation floor is flawed because market prices frequently deviate from book values based on yield requirements. Choosing to use trailing dividend yields as a sole metric ignores the importance of the yield spread over risk-free assets like Singapore Government Securities. Simply assuming earnings growth will offset capital costs overlooks the immediate impact of interest expenses on a company’s bottom line.

Takeaway: Interest rate hikes generally exert downward pressure on share prices by increasing discount rates and reducing the net income of leveraged companies.

Correct: Under SGX-ST Rule 13.7 and Section 206 of the Securities and Futures Act (SFA), Trading Representatives must prioritize customer orders over their own or the firm’s proprietary trades. Maintaining the confidentiality of non-public research reports is essential to prevent market misconduct and ensure fair dealing. This approach ensures the client receives the best possible execution without being disadvantaged by the representative’s personal interests or leaked information.

Incorrect: The strategy of aggregating client and proprietary orders fails because it compromises the mandatory priority that must be afforded to the client’s interests under Singapore law. Choosing to disclose upcoming research reports to a specific client constitutes a breach of confidentiality and potentially facilitates insider trading or unfair market advantages. Relying solely on delaying execution until after a research release violates the duty of best execution and the requirement to process orders promptly.

Takeaway: Trading Representatives must prioritize client orders and maintain research confidentiality to comply with SGX-ST rules and the Securities and Futures Act.

Correct: Under SGX Listing Rule 703 and the Code of Corporate Governance, the Board is collectively responsible for ensuring the company provides timely and accurate disclosure of material information. Immediate disclosure is required when information is likely to have a material effect on the price or value of the company’s securities. The Board must oversee the investigation into internal control failures to fulfill their fiduciary duties and maintain market integrity as required by the Securities and Futures Act.

Incorrect: The strategy of delaying an announcement until a full forensic audit is completed fails to meet the SGX requirement for immediate disclosure of material information. Relying solely on the Audit Committee to manage the disclosure process is inappropriate because the entire Board retains ultimate legal responsibility for regulatory compliance and market transparency. Choosing to issue a vague cautionary statement without mentioning the specific irregularities does not satisfy the obligation to prevent a false market in the company’s securities. Pursuing a policy of silence until the scheduled earnings release violates the principle that material information must be disclosed as soon as it becomes known to the issuer.

Takeaway: The Board must ensure immediate disclosure of material information to the SGX-ST to maintain market transparency and fulfill collective regulatory obligations.