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Singapore Exchange (SGX) is consulting the public on its proposal to reduce the standard board lot size of securities listed on SGX from 1,000 to 100 units, with a view to reducing it to 1 unit in the longer term. The reduction of the board lot size to 100 units as a first step will allow SGX to assess the market impact before unitising the standard board lot.
SGX believes the reduced board lot size will benefit the public as individuals will find it easier to invest in higher-priced shares, instead of limiting themselves to lower-priced ones. Many of the index component stocks and blue chips tend to be higher-priced. This will enable retail investors to more easily build balanced and diversified portfolios to grow their savings.
Institutional investors will also be better able to manage their risk exposures through finer asset allocation of funds.
The proposed standard board lot size of 100 units will apply to ordinary shares, real estate investment trusts, business trusts, company warrants, structured warrants, extended settlement contracts and shares on GlobalQuote. Existing board lot sizes of less than 100 units will remain unchanged.
The board lot sizes for exchange traded funds[1], American Depository Receipts and fixed income instruments, including Singapore Government Securities and preference shares will also remain unchanged.
Amendments are proposed to the Listing Rules, to cater for the reduction of the board lot size. These include:
- removal of Mainboard Listing Rules specifying the minimum board lot size for structured warrants, given the adoption of the standard board lot size of 100 for structured warrants; and
- amendments to Mainboard and Catalist Listing Rules to require issuers to specify in the annual report, the number of shareholders who hold less than 100 shares.
SGX seeks the views of the public and market participants on this proposal. Subject to regulatory approval and member readiness, we target to introduce this by the first quarter of 2014.
The consultation paper is available on SGX’s website at www.sgx.com from today. Market participants and members of the public can submit their comments and suggestions until 6 September 2013 via email, post/courier or fax to:
Email: rules@sgx.com
Post/Courier: Singapore Exchange
2, Shenton Way, SGX Centre 1
#19-00, Singapore 068804
Attn: Chua Tat Hsien
Regulatory Development & Policy
Fax: +65 6534 2207
[1] Except for SPDR STI ETF and ABF SG Bond Fund for which the board lot size will be reduced to 100 units.
