Singapore Exchange Warns Entities About Sanctions, Export Compliance, Law Firm Says
The Singapore Exchange has recently asked entities listed on the exchange about their exposure to sanctions and export control risks, stressing that "inadequate compliance could lead to trading suspensions," Hogan Lovells said in a client alert this month.
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"This active focus on sanctions-related compliance has significant implications" for the nearly 630 companies listed on the exchange, along with other businesses considering a public listing in Singapore, the law firm said. It said listed companies and those preparing to list "must carefully assess and manage sanctions risk."
Under the exchange's listing rules, "issuers are required to maintain 'adequate and effective systems of internal controls … and risk management systems,'" Hogan Lovells noted. It also said recent guidance from the exchange doesn't limit compliance obligations to Singaporean sanctions, but it "refers broadly to 'sanctions-related risks' and 'any applicable Sanctions Law,' including those imposed by international bodies and national governments."
The exchange's compliance expectations apply to subsidiaries of listed companies as well, the law firm said. "This has significant implications for multinational structures, including foreign subsidiaries of SGX-listed holding companies."
Companies should consider reviewing and improving their compliance programs to match expectations from the exchange and other regulators, the firm said. "The message from the SGX is clear: sanctions risk management is not optional and listed companies or companies looking to list in Singapore must take a global view of their sanctions-related risk."