With lighter touch rules, the market must now live up to its end of the bargain

News analysis

- David Gerald

For years, Singapore's capital market participants have called for less regulatory burden and more flexibility.

In recent years, these calls have grown in intensity. The key takeaway from a May consultation paper was that industry players wanted a less prescriptive market, as many believed Singapore had matured enough to operate under a full disclosure-based regime, one where investors, armed with timely and accurate information, could make informed decisions without the need for heavy-handed rules.

In October, the Singapore Exchange and regulators signalled their confidence to move in this direction.

The financial watch list, long seen as a stigma that hampered struggling but possibly viable companies from raising much-needed capital, will be scrapped.

Listing rules will be simplified and placed under one regulator instead of two, requirements rationalised, and red tape trimmed in an effort to make the market more vibrant and business-friendly.

It is, in essence, what the industry had been asking for: less prescription and more reliance on market discipline.

But this freedom comes with a price: responsibility. If regulators are stepping back, the market must step up.

This is because a disclosure-based regime rests on a simple principle: Companies should be free to operate and raise capital as they see fit, so long as they provide full, fair and timely information about their activities.