Singapore Exchange Regulation (SGX RegCo) announced that it will be using artificial intelligence (AI) and other RegTech solutions for the oversight of listed issuers.
The solutions will automate the extraction of data that can be used to compute certain indicators of financial risks.
The indicators are based on SGX RegCo’s observations of signs that indicate financial distress or irregularities in listed companies, which include significant asset write-offs and negative working capital.
SGX RegCo says it will expand the solutions to include machine learning techniques and additional information sources to improve predictive capabilities in these areas.
SEE:SGX ready to 'scale up' mergers: CEO Loh Boon Chye
“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,” says Tan Boon Gin, CEO of SGX RegCo.
“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,” he adds.
As at 3.12pm, shares in SGX are trading 1 cent higher or 0.1% up at $10.25.