What SGX expects of issuers’ disclosures during COVID-19

SGX RegCo has issued a regulatory column on 22 April 2020 (Please click here) to guide issuers on its expectations on the disclosures of issuers during the COVID-19 outbreak and the resultant government measures on their businesses. A key takeaway from this regulatory column is that it is deemed necessary for issuers to provide transparent and timely disclosures during this period, and broad-stroke explanations on the company’s outlook due to the decline in general economic activity would be deemed inadequate and of little utility to their shareholders. A summary of the regulatory column is provided below.

Making Disclosures During Uncertain Times 1. Quantifiable. Shut down of stores, plants and offices, if quantifiable, should be disclosed. Such as proportions of units that are shut down vis-à-vis the operating units due to COVID-19. At the very least, issuers must be transparent about such decisions including providing data on operations that have been suspended or curtailed. 2. Non-Quantifiable. On ongoing developments and that is not quantifiable, issuers should still make disclosures to reflect its current state of affairs and outlook. In particular, assessment of the steps taken by the Board to address the effects of COVID-19 and how its operating and financial conditions may change. Updates can be provided when there are subsequent material developments. a. When information is insufficient to disclose the financial impact with certainty. Issuers should provide a detailed explanation of the non-disclosure and sufficient information to enable investors to independently assess the financial impact after taking into consideration the variables disclosed. b. Avoid generic statements that do not give any clarity of the specific impact on their operations and financial situation. Issuers should not publish a generic statement that they expect their financial results to be materially impacted due to COVID-19 without providing an assessment on how their operations would be affected.