SGX to use AI, regulatory technology to enhance oversight

The technology will be used to compute indicators of financial risk based on SGX RegCo's observations.

The Singapore Exchange Regulation (SGX RegCo) will start using artificial intelligence and other regulatory technology (RegTech) as a part of its oversight of listed issuers.

"Using artificial intelligence and other technology, SGX RegCo is adapting information from companies’ disclosures into structured data that can be analysed and used easily and speedily. The automation of such processes directs regulatory resources to higher risk areas and enables us to be more targeted in our regulatory responses," said SGX RegCO CEO Tan Boon Gin.

The technology will be used to automate data extraction, which can be used to compute some indicators of financial risk based on RegCo's ovservations. These include existence of long oustanding trade receivables, significant asset write-offs, negative working capital, and low cash coverage ration.

"We could, for example, issue disclosure queries taking into account these indicators, and where necessary, engage with the audit committee and external auditors. This together with issuers’ responses will provide transparency to investors on signs of possible financial distress or irregularities in listed companies," Tan explained.
 

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