TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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Software defect prompts SGX to delay market opening by 3-1/2 hours while market mulls the hit to confidence in and reputation of the exchange
Kenneth Lim
04 December 2014
The second major market disruption in a month on Wednesday led to an apology by the chief executive of the Singapore Exchange (SGX) and a warning of possible action by the Monetary Authority of Singapore (MAS).
But while SGX CEO Magnus Bocker described the decision to delay the stock market’s open as a prudent move to ensure a level playing field for retail investors, others worried about an erosion of market confidence.
SGX moved the stock market’s open on Wednesday to 12:30pm from 9am to give local brokers time to update their client positions, after a software update resulted in a customer accounting system hosted by the market operator distributing erroneous reports for trades done on Monday and Tuesday.
Those reports are used by the brokers to, among other functions, keep track of clients’ position limits and margins.
Mr Bocker told a press briefing that although less than a third of market participants were affected, the bulk of them were retail investors. A judgement call was therefore made to give affected brokers time to reconcile their positions so that all types of investors would be able to trade equally.
“We could have opened earlier, but that would have had a negative impact on retail investors’ opportunities to participate,” he said.
In a statement, he apologised for the latest disruption, which came almost a month after the securities and derivatives markets shut down for an afternoon on Nov 5.
“This incident occurred on the back of the power breakdown on Nov 5 and we understand the market’s frustration,” he said. “This should not have happened and we take full responsibility. We are reviewing our processes to prevent any recurrence. Our priority is in rebuilding the trust that our members and customers have in us, and we seek their understanding and patience.”
Mr Bocker suggested that he was not ready to step down because of the disruptions.
“We are building a stronger SGX, we are building a stronger Singapore and Singapore financial market. My job is to do that,” he said, adding: “I’m not giving up because we have this. I’ve been working in exchanges for nearly 30 years. This is not the first time I’m sitting through this kind of challenges.”
But pressure is on SGX to address the operational breakdowns.
MAS warned that it could take unprecedented supervisory action.
Its spokesman said in a statement: “MAS has registered its disappointment and concerns with SGX over the delayed opening of its securities market caused by a software defect.
“The lapse is unacceptable, coming within weeks of the recent power breakdown on Nov 5.
MAS has instructed the SGX board and CEO to do a thorough review to address the shortcomings that led to the lapse. MAS will not hesitate to take supervisory actions against SGX if necessary.”
SGX had earlier set up a board-level committee to investigate the Nov 5 outage.
The impact of the Wednesday delay was largely in terms of convenience and confidence, industry players said.
“Very little financial impact, but staff had to work through the night,” CIMB Securities chief executive Carol Fong said.
One trader said the breakdowns are “becoming more of a joke” and are hurting the reputation of the exchange.
“When you drive on the street and you take full responsibility for an incident, you have to pay the summons, you know?” the trader said. “Some heads got to roll here.”
David Gerald, president of the Securities Investors Association of Singapore, said it was not fair to pin responsibility on any single individual.
But while he said it was important to remember that technical problems happened to other exchanges as well, he thought two incidents in a month were too many for a market with Singapore’s aspirations.
The newly created Small and Middle Capitalisation Companies Association (SMCCA), which has a membership of almost 30 companies, urged a truly independent review.
Its president Tan Choon Wee said in a statement: “I think it is necessary to elevate this inquiry commission to one that is totally independent of SGX ... It is critical to Singapore’s reputation as a financial hub that these two incidents remain isolated one-offs.”
The truncated session showed some weakness on Wednesday despite early gains.
About 1.2 billion shares worth S$875.4 million, or 78 per cent of the average daily traded turnover value in November, changed hands in the shortened session.
The Straits Times Index slipped 0.57 per cent or 18.93 points to close at 3,303.39.
SGX shares eased 0.6 per cent or 4 Singapore cents to end at S$7.23.