responsibility for ensuring accurate and adequate disclosure. after a prospectus has been registered, it is proposed that mas be empowered to issue a stop order and prevent further issues of securities if a prospectus is found to contain misleading or incorrect statements, or to have omitted material information. investors who have subscribed for securities on the basis of the deficient prospectus can withdraw their applications and have their monies refunded. the new prospectus registration regime is aimed at placing greater responsibility on issuers and their advisers to meet the high standards of disclosure necessary for the development of more effective market discipline, and a more mature capital market environment. mas will be seeking feedback on the proposed prospectus registration regime shortly, as part of our public consultation on the draft sfa. conclusion approaches to regulation worldwide are evolving with the times. an effective system of market discipline is necessary to sustain and promote the growth of open, transparent and competitive markets. singapore is making substantial changes to its laws, rules and standards to support enhanced market discipline. it will be a process of evolution, but we have made good progress. succeeding in this endeavour will require effort by both the regulator and all market participants, including issuers, their advisers and investors themselves. it is an indispensable part of our efforts to make singapore a premier financial hub in asia, and we have every confidence in getting there.

and investment advisers likewise, have a duty to provide their investing clients with objective advice that is in their clients'best interests. • finally, it is for investors themselves to take advantage of higher standards of disclosure in making their decisions. investors and the media also contribute to effective market discipline by calling for more and better quality information from listed companies. institutional investors such as fund managers play an important role in this regard. they have greater resources to monitor and analyse information, and typically greater leverage on companies to encourage them to improve on standards of corporate governance and disclosure. the move towards market - based regulation will be given a significant push by the recommendations of two private sector - led committees that were appointed by the government last year - the corporate governance committee and the disclosure and accounting standards committee. the committees have recently completed an exercise of public consultation on their preliminary recommendations, and aim to publish their final reports by april. the development of a market - driven, disclosure - based regime is in progress. it will be naive to expect an effective system of market discipline to have arrived in a day, or in three years. the transition will cause some uncertainties initially, and even the occasional revanchist call for a return to the regime of the past. market participants will take time to develop high standards of corporate conduct and disclosure, and to discover the new boundaries. we can expect some of them to test the boundaries in the process, either wittingly or otherwise. but the boundaries of what is permissible to preserve fair and transparent markets should become quite apparent through a few salutary cases, which will help define the new dispensation. the mas and sgx themselves have reviewed their respective roles in the new regulatory environment. i will touch now on a number of issues concerning the regulatory functions of the sgx as a demutualised, profit - oriented and listed exchange, and its relationship with the mas as the statutory regulator. can a demutualised, listed exchange regulate the market? as a focal point of market activity, exchanges have traditionally been accorded the role of frontline regulator of the securities markets. with the demutualisation and public offering of shares by a growing number of exchanges - most recently the deutsche borse - questions arise as to whether a listed for - profit exchange is able to discharge its role as frontline regulator competently and effectively. conflicts of interest in the regulatory functions of an exchange are not new however. they existed before demutualisation.