MAS and SGX announce new proposals to securities market

Find out the minimum trading price.

MAS and SGX recently responded with proposals to the joint consultation paper on the Review of the Securities Market Structure and Practices published on 7 February 2014, taking account feedback that it had gathered over the six-month interim.

In a release, MAS and SGX detailed proposals regarding minimum trading price, collateral requirement for securities trading, short position reporting requirements, transparency of trading restrictions imposed by securities intermediaries and reinforcing the SGX listings and enforcement framework.

A minimum trading price of $0.20 as a continuing listing requirement for issuers listed on the SGX Mainboard was introduced to address risks of low-priced securities being more susceptible to excessive speculation and potential market manipulation. According to MAS and SGX, a transition period of 12 months will be given to affected issuers to adjust to the new requirement.

Also, a minimum 5% of collateral will be collected from customers for trading of listed securities to promote financial prudence and help mitigate the risk of excessive leverage assumed.

To further enhance transparency of short selling activities in the securities market, an aggregate short position that exceeds 0.05% or $1 million of issued shares will have to be reported.

Here’s more from MAS and SGX:

To improve retail investors’ access to a broader range of listed securities,
particularly blue-chip stocks, SGX will reduce the board lot size for securities listed on SGX from the existing 1,000 shares to 100 shares in January 2015. SGX will announce details of this initiative by end August 2014.

Mr Lee Boon Ngiap, Assistant Managing Director, Capital Markets, MAS, said,
“An independent assessment by the International Monetary Fund last year affirmed that our securities market’s compliance with international standards is generally high. MAS’ enforcement philosophy relating to the securities markets and financial intermediaries was also assessed to be cogent, outcome-focused and well developed. These proposals will further enhance the robustness and resilience of our securities market and instill greater investor confidence in our marketplace.”