Investor safeguards against unusual trading activity

Investor safeguards against unusual trading activity

Q: Many stocks have become highly active and more volatile in recent months. As an investor, I am wondering if this is a sign of unusual trading activity. What investor safeguards are in place in instances of unusual activity?

A: The Singapore Exchange (SGX) deploys a customised surveillance system that detects any unusual trading activity in individual counters on a real-time basis throughout the day.

Where a trading activity cannot be explained by corporate developments, macroeconomic factors, industry developments and other factors, we will publicly query the company in case there is material information yet to be disclosed.

The query will appear under the company's name on the Company Announcements page on www.sgx.com

While listed companies take their obligations seriously, there could be instances where they are unaware that fast-developing corporate actions or activities have leaked. The query serves to remind listed companies to promptly address the unusual trading movements.

When making investment decisions, investors should note these public queries and the responses of the companies concerned. Each SGX query to a company serves as a real-time up-to-the-minute alert to investors to trade with care.

The number of public queries has risen significantly in recent months: In January and February this year, we issued a total of 26 public queries to companies, or an average of 13 a month. This compares with an average of five public queries a month last year.

Given that each public query is issued because a certain trading activity cannot be explained, the high number of queries should serve as another reminder to investors to be cautious when trading.

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