SGX Issues Consultation Paper On Amendments To Minimum Bid Sizes And Forced Order Range For Its Securities Market

Singapore Exchange Limited (SGX) is inviting public comments on its proposed amendments to the following:

1. minimum bid sizes of certain price ranges for securities 

   For securities, the minimum bid sizes will be reduced for price ranges below $0.20, from $1.00 to $1.99 (inclusive), and $10 and above.

    

   Lowering bid sizes will allow investors to quote at more optimal levels, resulting in tighter bid-ask spreads and, consequently, lowering the investors’ costs of trading. The move is expected to increase market liquidity. It will also align SGX’s minimum bid sizes in the selected price ranges with that of other major Asian exchanges, enhancing SGX’s competitiveness.

    

2. application of minimum bid sizes for debentures similar to those for exchange-traded funds (ETFs)
    

   Currently, the minimum bid size for debentures is $0.001.  SGX proposes to effect an amendment enabling it to determine a minimum bid size of either $0.01 or $0.001 for debentures, similar to ETFs.  This will allow SGX the flexibility to implement a minimum bid size of $0.01 for higher priced debentures and a minimum bid size of $0.001 for lower priced debentures.

    

3. the Forced Order Range of all securities,  ETFs and debentures, and the consequent amendment to the Error Trade Policy for ETFs and debentures
    

   A wider Forced Order Range[1] will be prescribed to complement the change in the bid sizes.

    

   Similarly, for ETFs and debentures, a wider Forced Order Range will provide greater flexibility in terms of order entry for ETFs and debentures with higher prices. For lower-priced ETFs and debentures, an amendment to the Error Trade Policy is proposed to strengthen the safeguards against error trades.

The details of the proposed amendments can be found in the Appendix.

The consultation paper, which explains the rationale and proposed amendments in detail, will be available on SGX website at www.sgx.com from today. Market participants andmembers of the public can give their feedback and suggestions on the above proposed amendments from today until 21 September 2009 via email and either by post/courier or fax:

Appendix

Consultation Paper