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SGX’s head of surveillance regulation talks about one of the most exciting days of his 14-year career and what keeps him motivated at the Exchange
Kenneth Lim
20 October 2014
ON Oct 4, 2013, Kelvin Koh, head of surveillance regulation at the Singapore Exchange (SGX), was at work by 8am, just a little earlier than usual; he would not leave for home that day until about 10pm, though.
When the markets opened at 9am, the stocks of a few counters began to collapse - wiping out hundreds of millions of dollars of market value and sending a shock wave across the market. In the next half-hour, SGX sent out a number of trading queries.
Within an hour, the market operator and regulator took the rare step of exercising its power to suspend trading in the shares of Asiasons Capital, Blumont Group and LionGold Corp. The penny stock meltdown of 2013 had begun.
“The team was on high alert and the atmosphere was tense as the team raced to collect information, while continuing to monitor the rest of the market,” Mr Koh told The Business Times.
He could not disclose many details about what happened that fateful day, because the case is currently under investigation by the police’s white-collar unit, the Commercial Affairs Department. But SGX has been under a spotlight ever since the 2013 debacle - and it has only recently stepped up efforts to tell its side of the story.
SGX’s efforts to maintain a “fair and orderly” marketplace rests mainly on a 22-person surveillance group, which is split into securities, derivatives and investigation teams. Other than strict rules prohibiting talking about work to outsiders, the people in that group are fairly normal.
Mr Koh is married, has one child, and collects stamps and coins of zodiac signs. To relax, the group occasionally goes for a few rounds of bowling.
A team is the only entity that can perform the job of surveillance, said Mr Koh, who consciously hires the people who work for him from diverse backgrounds ranging from compliance to trading.
“You have to think about what the bad people are thinking. Is this a strategy or is it market misconduct?” Mr Koh said.
One quickly learns that “you’re not always the greatest in this space”, he said. “There are people trying to outsmart you, always trying new means.”
And so on Oct 4, 2013, the team encountered what Mr Koh said was one of the most exciting days in his 14-year career at surveillance.
Work in those days dragged long into the night. And it was under those conditions that the team proved its readiness to put the public good above personal gain.
“They didn’t say anything like ‘Oh, it’s so tiring’. They know it’s a job they want to do, and that’s the reason why I think they’re still here,” Mr Koh said.
A sense of public duty is important in a job like surveillance, he mused.
Mr Koh’s ambition, while growing up, was to become a banker or a fund manager. But he ended up working as an audit officer with the Ministry of Education right after finishing university. And he found that he enjoyed doing investigative work.
He joined SGX two years later as part of what was then a two-man surveillance outfit. The work in surveillance is intense and demanding. During the penny stock saga, Mr Koh’s mind was constantly at work, even when his body was not.
“Even at the end of the day, I continued to think through and plan our strategies and actions for the following day,” he said.
But he continues to climb up to his watchtower every day, driven by the belief that his work actually makes a difference to others.
“Every day presents me with new challenges, and I think I play a meaningful role in upholding trust and confidence for the investor as well as in the marketplace,” he said.