2. Designation as a regulatory tool
SGX-ST has three key regulatory tools to support a fair, orderly and transparent market. They are as follows:(a) Query to listed companies. SGX may issue a query to listed companies in situations where there is unusual trading that is not explained by announced developments or industry trends. The query serves to raise investors' awareness that trading activity is unusual;(b) Designation of a security or futures contract. SGX may declare a listed or quoted security or futures contract to be a Designated Instrument where, in SGX's judgment, there is possible manipulation or excessive speculation in the security or futures contract (or its underlying), or it is otherwise in the interest of the market to do so; and(c) Suspension. SGX may suspend a security or futures contract where, in SGX's opinion, the market is not orderly, informed or fair.
Designation is a tool that is used sparingly and only in exceptional circumstances that warrant such intervention. Such circumstances may include prolonged trading anomalies observed in the security or futures contract, such as order book imbalances and/or prolonged, excessive speculation in a security. The objective of designation is to restore market equilibrium by removing the impact of such anomalies on price formation, and allow the price of the security or futures contract to be formed through demand and supply forces in an informed market. Designation would be lifted once, in SGX's opinion trading has returned to normalcy.