(Reuters) -Singapore Exchange is proposing a rule change to help shareholders in calling special general meetings, as the city-state attempts to enhance corporate governance practices, the bourse's regulatory arm said on Tuesday.
Singapore-listed firms currently have no regulatory obligation to respond to shareholder calls for special general meetings. Domestic companies have historically been on the side of not granting such requests.
Under the current proposal, listed firms will be required to take certain action within 21 days to hold a meeting after a set of shareholders, or even one shareholder who owns at least 10% stake, makes a request.
Any company that disputes the validity of the requisition notice must apply for a court ruling within the same timeline, SGX RegCo said.
The public consultation is open till May 23.
"If investors have a stronger say, companies will be more motivated to consider their interests by improving both operational performance and shareholder returns," said Tan Boon Gin, CEO of SGX RegCo, adding that companies need to hear what the market is asking for.
Other exchanges, such as the one in the growing market of Hong Kong, have similar laid down rules.
Singapore has been making constant efforts to improve corporate governance in the country after a recent surge in investor activism locally and among global firms.
In January 2023, the bourse had moved for better transparency in payment details for CEO and individual company directors.
Other than taking steps towards improving market discipline, the regulator is currently working on forcing companies to increase value of shareholders.
SGX RegCo is currently working on strengthening the board of firms to enhance performance and also to reduce market friction, CEO added.
(Reporting by Rishav Chatterjee in Bengaluru; Editing by Shilpi Majumdar and Rashmi Aich)
