Growth Of Electronic SGX Nikkei 225 Futures Trading And The Closure Of SGX Nikkei 225 And JBG Futures Pits

The electronic trading of SGX Nikkei (e-Nikkei) 225 futures has surpassed the one million mark for contracts done since November 2004. Electronic trading for SGX Nikkei 225 now represents about 80% of total SGX Nikkei trading volume.

With the rapid growth of the electronic trading of SGX Nikkei 225 futures, SGX has decided to consolidate the trading of this contract on the electronic platform and close the SGX Nikkei 225 futures open outcry trading pit after the close of business on 31 March 2005.

Following the successful transition of SGX Nikkei 225 futures to electronic trading and in response to market demand, SGX will now develop the electronic SGX JGB (e-JGB) futures contract. We will introduce an electronic market making programme for the JGB futures commencing 14 March 2005. In conjunction with the e-JGB initiatives, the SGX JGB futures open outcry trading pit will also be closed at the end of the business on 31 March 2005.

However, both the options pits of SGX Nikkei 225 and JGB will continue to be opened for trading until further notice.

Mr Gan Seow Ann, EVP and Head of Markets of SGX, said "With the open connectivity for our members and the seamless access through SGX QUEST, we have seen a rapid rise in preference for electronic trading of SGX Nikkei 225 futures. The closure of the open outcry trading pits would be a natural progression as we migrate to electronic trading."

SGX has conducted consultation sessions with our market participants on the closure of the open outcry trading pits. To facilitate a smooth transition, SGX has embarked on several initiatives since 2004 to prepare our market participants for electronic trading. Some of the initiatives included electronic trading strategy and training programmes, simulated trading from the Electronic Learning Centre and the provision of handheld electronic trading devices with SGX QUEST access. Over 70% of the active floor Locals attended these free electronic training programmes. More than 200 floor Locals had the opportunity to use the facilities at the Electronic Learning Centre to familiarise themselves with electronic trading using real-time market feed and trade simulator.

A portion of SGX staff working on the trading floor affected by the closure will either be redeployed or offered a compensation package of one month for every year of service. Outplacement, counselling assistance and job search / placement services will be offered to all affected staff.