No more Mr Nice Bourse: SGX vows more detailed and targeted “Trade with Caution” alerts

TWC will now be second-level, heightened alerts.

The local bourse aims to change the implication of a “Trade with Caution (TWC)” alert, as it announces that it will overhaul the TWC approach to deliver higher-value information to investors.

According to a statement by Singapore Exchange (SGX), the changes were brought about by feedback from investors, market participants and other stakeholders about the current high volume of the TWC announcements, but with minimal new information.

“Currently, TWC alerts are automatically generated. When trading activity of a share is deemed unusual, which means it cannot be explained by any publicly-known factor, SGX issues a public query to the company. If the company in its reply to SGX says it is not aware of reasons for the trading activities, SGX issues the TWC alert,” SGX said.

To address verified unusual activities, SGX says the TWC announcement will be more of a second-level heightened alert.

“We will include, where warranted, information gathered from our review of trading activities much like how we flagged trading activities in IHC and CEFC previously,” said Tan Boon Gin, chief regulatory officer at SGX.