SGX proposes shorter securities settlement cycle of two days

Singapore Exchange (SGX) on Wednesday proposed to make changes in the clearing and settlement of securities in the Singapore stock market.

SGX
SGX Logo. Reuters

Singapore Exchange (SGX) on Wednesday proposed to make changes in the clearing and settlement of securities in the Singapore stock market.

The proposed improvements include a shorter securities settlement cycle of two days instead of three days as a shorter period reduces counterparty risks market-wide and avails securities and funds earlier for investors.

It also aims to provide simultaneous securities and money settlement. This reduces risk arising from the current time lag between money and securities settlement. Iron-cladding, enhancement of processes, SGX said in a statement.

SGX is also proposing that investors with shares in their Central Depository Accounts have the option of giving their broker visibility over specific holdings by creating a broker-linked balance of these holdings.

"SGX has been actively engaging with stakeholders on the proposals for many months. We believe all these will benefit the market," Loh Boon Chye, CEO of SGX said.

SGX is targeting to introduce the changes by the second half of 2018. The public consultation is open till January 15.

SGX
SGX Logo. Reuters

Singapore Exchange (SGX) on Wednesday proposed to make changes in the clearing and settlement of securities in the Singapore stock market.

The proposed improvements include a shorter securities settlement cycle of two days instead of three days as a shorter period reduces counterparty risks market-wide and avails securities and funds earlier for investors.

It also aims to provide simultaneous securities and money settlement. This reduces risk arising from the current time lag between money and securities settlement. Iron-cladding, enhancement of processes, SGX said in a statement.

SGX is also proposing that investors with shares in their Central Depository Accounts have the option of giving their broker visibility over specific holdings by creating a broker-linked balance of these holdings.

"SGX has been actively engaging with stakeholders on the proposals for many months. We believe all these will benefit the market," Loh Boon Chye, CEO of SGX said.

SGX is targeting to introduce the changes by the second half of 2018. The public consultation is open till January 15.

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