SGX proposes new algorithm for computing prices

The bourse said the computed price will better reflect the market.

Singapore Exchange is consulting the public on its proposal to change the algorithm used to compute the equilibrium price at which orders are matched at the end of the opening and closing routines and adjust phases in the securities market.

The price computed by the proposed algorithm is a better reflection of the market because, according to SGX, the algorithm’s parameters allow for a better accounting of the forces of supply and demand. This algorithm is also used by the Australian Securities Exchange (ASX) and NASDAQ OMX.

The consultation paper on the proposed algorithm for determining the equilibrium price is available on SGX’s website www.sgx.com.