SGX Introduces Proposed Changes to Market Structure, Schedule

SGX hopes that the proposed break will retain a significant overlap in trading hours with key markets in Asia.

Singapore Exchange (SGX) has proposed a few adjustments to its equities market structure, consulting the public on the alterations that are aimed at helping address market conditions to the benefit of participants.

In particular, the SGX has targeted three areas for possible change – this includes an increase of the minimum bid size for stocks and relevant securities trading in the S$1.00 to S$1.99 range. Furthermore, SGX has also proposed a general widening of the forced order range for stocks and relevant securities and altering trading hours by including a mid-day break from 12.00pm to 1.00pm local time.

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Trifecta of Changes

The changes are designed to help promote better market conditions for participants at the SGX whilst also helping reconcile and calibrate the interests of its diverse and varied segments of participants across its market ecosystem.

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In terms of its proposed minimum bid size for stocks and securities, the SGX addressed this topic based on a decline in traded value in the S$1.00 to S$1.99 price range in recent years and lower retail trader participation in this price band.

Previous market feedback also indicated that a wider minimum bid size could potentially generate more viable trading opportunities, having taken into account total transaction costs for some segments of the market, such as retail traders. As for its order range changes, the SGX hoped to address its overall order entry efficiency.

Finally, the group’s proposed one hour mid-day break from 12.00pm to 1.00pm is essentially a second attempt at an earlier mid-day break from 12.30pm to 2.00pm in effect before the continuous all-day trading (CAT) schedule was first implemented in August 2011.

SGX hopes that the proposed mid-day break will allow for the retention of significant overlap in trading hours with key markets in Asia. According to Loh Boon Chye, CEO of SGX, in a statement on the changes: “SGX constantly reviews its market structures, rules and policies, taking into account changing market conditions, regular dialogue with the industry, and supportive data analysis.”

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