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4.2.4 ENABLING SWIFT, EFFECTIVE AND TARGETED ENFORCEMENT
Effective regulations that hold entities and individuals accountable as well as deter misconduct promotes investor confidence, and is a key factor in the development of efficient markets. A successful enforcement strategy can change behaviour, reduce transgressions as well as create an environment where fair and efficient markets can thrive. In order to optimise the deterrent effect of sanctions imposed, enforcement action needs to be swift and its outcomes certain. Timely enforcement interventions will also prevent misconduct from escalating and crystalising into detrimental effects on investors. As such, the SC’s enforcement strategy will prioritise the utilisation of its resources in market segments that are susceptible to abuse and towards misconduct that impairs the operations of a fair and orderly market. To achieve the aforementioned enforcement outcomes, the SC will adopt a holistic approach across its enforcement value chain.
Diagram 23
SWIFT, EFFECTIVE AND TARGETED ENFORCEMENT APPROACH
Continuous improvement
Greater self-remediation of
Targeted enforcement strategy
misconduct in exchange for appropriate sanctions
that reflects the SC’s priorities and articulates the SC’s enforcement risk appetite
Greater
transparency mechanism
on enforcement when evaluating
Efficient triage
while balancing confidentiality
initiation of formal investigation
with expedited and effective case resolution for enforcement outcomes
Evaluation of effectiveness
Continuous improvement
Swift investigation
Source: SC.
with key performance indicators
Swift, effective and targeted enforcement
A. DEFINING A TARGETED ENFORCEMENT STRATEGY
Over the last decade, the SC focused on the vigorous enforcement of securities laws and active deterrence of capital market transgressions – this has seen significant enforcement focus on insider trading. Recognising the need for greater balance in enforcement focus across its mandate, the SC has in recent years started expanding its enforcement focus to include securities fraud, corporate misconduct, disclosure breaches as well as market manipulation. In tandem, the AOB has also stepped up enforcement actions and imposed sanctions on auditors to deter non-compliance with auditing standards and procedures, to mitigate the risk of future audit failures. These enforcement actions are in line with the SC’s priorities on CG, market conduct and investor protection – particularly against fraud and scams arising from an increasingly digital landscape. To be more effective in enforcement outcomes that shape market behaviour, the SC and AOB will continue to refine and deploy a more targeted enforcement strategy.
CAPITAL MARKET MASTERPLAN 3
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