Corporate Governance 2- Public listed
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What is the purpose of frequent financial reporting for high-risk debt-listed issuers?

  • To ensure compliance with the stock exchange regulations.
  • To provide a basis for future loan approvals.
  • To keep shareholders informed about the issuer's financial position. (correct)
  • To reduce audit expenses for the company.

Which companies are required to undertake quarterly reporting?

  • All listed companies, regardless of circumstances.
  • Only companies with positive audit opinions.
  • Only newly listed companies.
  • Companies with adverse audit opinions or material uncertainties. (correct)

When is it mandatory for listed companies to disclose their diversity policy in annual reports?

  • Starting from 2022. (correct)
  • Starting from 2020.
  • Starting from 2023.
  • Starting from 2018.

What are the components that must be addressed in a company's board diversity policy?

<p>Skills, experience, and tenure diversity. (D)</p> Signup and view all the answers

What is the role of the board in sustainability reporting according to the Code of Corporate Governance?

<p>To bear ultimate responsibility and manage ESG factors. (B)</p> Signup and view all the answers

What type of training are all directors required to undergo related to sustainability?

<p>One-time training on sustainability. (B)</p> Signup and view all the answers

What is encouraged for companies regarding quarterly updates on financial positions?

<p>Voluntary updates for shareholders. (D)</p> Signup and view all the answers

Which aspect of diversity must be included in a board diversity policy?

<p>Diversity in age, ethnicity, and tenure. (A)</p> Signup and view all the answers

What is expected from listed companies regarding their progress on diversity targets?

<p>They need to disclose their progress towards specific targets. (D)</p> Signup and view all the answers

What are ESG factors related to in the context of corporate governance?

<p>Environmental and community engagement efforts. (D)</p> Signup and view all the answers

What does the materiality test in Rule 703 relate to?

<p>Information that likely affects significant changes in an issuer's securities value (C)</p> Signup and view all the answers

Which of the following is NOT an example of material information?

<p>Minor updates to internal HR policies (D)</p> Signup and view all the answers

Under what condition can information be exempt from the disclosure requirements of Rule 703?

<p>If it falls under certain confidential categories that a reasonable person would not expect to be disclosed (A)</p> Signup and view all the answers

Which rule dictates the obligation for immediate disclosure?

<p>Rule 704 (B)</p> Signup and view all the answers

What must companies do according to Chapter 7, Practice Note 7.1?

<p>Provide immediate announcements and periodic financial statements (D)</p> Signup and view all the answers

What is the primary aim of transferring the regulatory unit of the Stock Exchange to SGX Redco?

<p>To enhance the segregation of regulatory functions from commercial activities (A)</p> Signup and view all the answers

According to the content, what must material information relate to in order to require disclosure?

<p>Circumstances likely to materially affect the price or value of securities (D)</p> Signup and view all the answers

What does Rule 704 specify regarding disclosure?

<p>It outlines a specific list of events that require disclosure (C)</p> Signup and view all the answers

What is one exception to the general disclosure rule mentioned in the content?

<p>Immediate disclosure is a breach of law (A)</p> Signup and view all the answers

What landmark case is referenced regarding the testing of Rule 703?

<p>Peter Madhavan versus public prosecutor in 2012 (D)</p> Signup and view all the answers

What does the general category of disclosures include according to the guidelines?

<p>Material information concerning the issuer and its subsidiaries (B)</p> Signup and view all the answers

What key aspect does the content suggest about immediate disclosure requirements?

<p>They may be waived if it leads to a legal breach (B)</p> Signup and view all the answers

What must the nominating committee do if it recommends dispensing training for a director with sustainability expertise?

<p>Justify the recommendation for the dispensation. (B)</p> Signup and view all the answers

What is required of listed companies regarding their sustainability reports?

<p>They must prepare annual reports addressing specific primary components. (C)</p> Signup and view all the answers

Which of the following regarding the sustainability report is NOT true?

<p>It can include unverified data if it is labeled as such. (D)</p> Signup and view all the answers

What must a listed company do if it chooses to exclude a primary component from its sustainability report?

<p>Justify the exclusion with valid reasons. (D)</p> Signup and view all the answers

Which industries are mandated to comply with climate-related disclosures in their sustainability reports?

<p>Specific industries including agriculture, energy, and materials are required to comply. (A)</p> Signup and view all the answers

What is the purpose of Practice Note 7.6 in the context of external audits?

<p>To detail the external audit processes and expectations. (A)</p> Signup and view all the answers

What is a significant feature of the comply or explain approach mentioned in the rules?

<p>Companies may opt for compliance or provide explanations for non-compliance. (C)</p> Signup and view all the answers

What happens if a listed company fails to address primary components in its sustainability report?

<p>The company must provide reasons for exclusion; otherwise, it faces scrutiny. (A)</p> Signup and view all the answers

Which statement about external auditors and sustainability reports is accurate?

<p>Engaging external auditors is encouraged to ensure report reliability. (A)</p> Signup and view all the answers

What must occur if the conditions for withholding information cease to be satisfied?

<p>The issuer must announce the information immediately. (D)</p> Signup and view all the answers

Which of the following is NOT one of the three conditions for withholding information?

<p>The information is already publicly available. (D)</p> Signup and view all the answers

What is the maximum duration for a trading halt if material information needs to be disclosed during trading hours?

<p>3 days (D)</p> Signup and view all the answers

What is required from listed companies regarding sustainability reports introduced in 2017?

<p>They should issue their sustainability report within four months after the financial year end. (D)</p> Signup and view all the answers

What defines selective disclosure in this context?

<p>Providing privileged information to certain individuals before the public. (A)</p> Signup and view all the answers

Under the new reporting rules, companies must submit their quarterly financial reports within how many days from the end of the quarter?

<p>45 days (B)</p> Signup and view all the answers

Which of the following categories does NOT qualify for withholding information?

<p>Publicly discussed proposals (C)</p> Signup and view all the answers

What is the consequence for issuers who engage in selective disclosure?

<p>They may face penalties for irregularities. (B)</p> Signup and view all the answers

Which regulation mandates that information must be disclosed regardless of its general availability?

<p>Rule 703 (B)</p> Signup and view all the answers

Flashcards

SGX Redco

Singapore Exchange Regulation Private Limited, a subsidiary of the Singapore Exchange (SGX), handling all frontline regulatory functions.

Material Information

Information that could significantly impact the price or value of a company's securities.

Disclosure Requirements

Rules specifying what information companies must publicly report.

Rule 703

A listing rule outlining general requirements for disclosing material information.

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Rule 704

A listing rule specifying what specific kinds of events require disclosures.

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Board Diversity Policy Disclosure

Requirement to disclose policies regarding board representation based on diversity factors.

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Sustainability Reporting

Requirement to disclose a company's impact on the environment and society.

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Sustainability Expertise

A director's knowledge and experience in environmental and social responsibility practices.

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Comply or Explain

A principle where companies either follow specific guidelines or provide clear explanations for any deviations.

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Internal Review

An assessment of the sustainability report by the company's internal audit function.

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External Assurance

An independent audit of the sustainability report by external auditors.

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Primary Components

Key areas that must be addressed in a sustainability report, such as environmental impact, social responsibility, and governance.

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Justify Exclusion

When a company wants to omit a primary component from its sustainability report, they must provide strong reasons for doing so.

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Mandatory Compliance

Certain industries are required to comply with specific regulations regarding sustainability reporting.

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Climate Related Disclosures

Reporting on a company's actions and impacts related to climate change.

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Task Force on Climate-Related Financial Disclosures (TCFD)

An international body that provides recommendations for consistent and transparent climate-related disclosures.

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Quarterly Reporting

Companies with high risk factors must provide detailed financial information every three months.

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Semi-Annual Reporting

Companies with lower risk provide updated information every six months, twice a year.

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Voluntary Business Updates

All listed companies are encouraged to provide investors with regular information about their performance, even outside mandatory reporting periods.

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Board Diversity Policy

Mandatory disclosure of how a company plans to achieve diversity in its board of directors, focusing on gender, skills, experience, and other factors.

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Diversity Targets

Companies must set specific goals and timelines for achieving board diversity, and publicly report progress towards those goals.

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Reasonable Person

A hypothetical individual used as a standard to judge if information is likely to affect the company's securities. This person is assumed to be well-informed and reasonable.

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Confidential Information

Data that is private or sensitive and should not be disclosed to the public. It's often protected by confidentiality agreements.

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ESG Factors

Environmental, social, and governance aspects that significantly influence a company's operations and long-term success.

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Listed Categories [Rule 703]

Specific types of information, like ongoing litigation or potential acquisitions, that a company must disclose even if not publicly known.

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Material ESG Factors

Specific ESG factors that are relevant and important to a company's business activities and performance.

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Director Sustainability Training

Mandatory training for all board directors on the principles and practices of sustainability reporting and governance.

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Board Delegation

The board can delegate tasks related to sustainability reporting and managing ESG factors, while still retaining ultimate responsibility.

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When must companies disclose information?

Companies must disclose material information immediately when it arises, even during trading hours, unless certain conditions are met for withholding.

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What are the conditions for withholding information?

Three conditions must be met to withhold information: 1) A reasonable person wouldn't expect disclosure, 2) The information is confidential, and 3) The information relates to specific categories like incomplete proposals, trade secrets, or internal management purposes.

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What is selective disclosure?

Selective disclosure happens when material information is given to individuals outside the company and its advisors in a way that gives those individuals a privileged position in trading.

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What is the 'open door policy'?

The exchange encourages companies to maintain an open door policy when dealing with analysts, journalists, and investors, but material information cannot be shared selectively without prior public disclosure.

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What is the purpose of a trading halt?

A trading halt can be requested by a company to allow for the dissemination of material information during trading hours, preventing market disruptions and ensuring a fair playing field.

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What is mandatory quarterly reporting?

Companies used to have to report their financial performance quarterly, but this requirement has been revised to a risk-based approach, where only specific companies are still mandated to do so.

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What is the timeline for annual reports?

Listed companies should issue their annual report 14 days before their annual general meeting, making it available on exchanges, net, and to shareholders.

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What is the timeline for sustainability reports?

Listed companies have to issue a sustainability report within four months of the financial year end, with an extra month if the report is audited by external auditors.

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What is the purpose of transparency requirements?

Transparency requirements, such as the disclosure of material information, are crucial for maintaining a fair and efficient market, protecting investors, and fostering public trust.

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Study Notes

Corporate Governance - Corporate & Commercial Practice

  • Stock Exchange has transferred its regulatory unit to Singapore Exchange Regulation Private Limited (SGX Redco).
  • SGX Redco undertakes regulatory functions for SGX.
  • This aims to more explicitly separate regulatory functions from commercial & operating activities.
  • Material information disclosure is categorized as general and specific.
  • Issuers must announce information on themselves, subsidiaries, and associated companies.
  • Information necessary to prevent false market or affect security value.

Material Information Disclosure

  • Material information must be disclosed when it arises, even during trading hours.
  • If disclosure during trading hours, the exchange may halt trading.
  • There are exceptions to this general rule:
    • Immediate disclosure isn't needed if a law breach.
    • Three conditions for withholding information:
  • Reasonable person wouldn't expect disclosure.
  • Information is confidential.
  • Information relates to specific listed categories (incomplete proposals or certain types).

Sustainability Reporting

  • All listed companies must issue sustainability reports by four months after the financial year end.
  • If audited, one extra month is granted.
  • Selective disclosure is prohibited.
  • Disclosure of material information to any outsiders by the issuer or its advisor puts recipients in privileged dealing positions.

Quarterly and Annual Reporting

  • Periodic financial reports, previously quarterly for all listed companies, are now optional.
  • Quarterly financial reports are needed for companies with certain risks.
  • Semi-annual or half-yearly financial reports are required for other companies.
  • Annual reports should be issued 14 days before the annual general meeting.
  • The date of the AGM should not be more than four months after the financial year.

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Corporate Governance 2 - Public Listed Companies PDF

Description

Test your knowledge on corporate governance practices related to material information disclosure and the regulatory functions of SGX Redco. This quiz covers the separation of regulatory and commercial activities, essential disclosure requirements, and exceptions to these rules. Get ready to evaluate your understanding of corporate and commercial practices!

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