SGX Opens Access Further From 1 July - Exchange To Accept New Securities Members & Allow Dual Membership

Singapore Exchange (SGX) has announced measures to further open access to its markets. From 1 July 2000 onwards, the Exchange will (1) accept applications for new members of the securities market; and (2) allow a single legal entity to be a member of both the securities and derivatives markets.

Thomas Kloet, CEO of SGX, said, "These initiatives are part of our strategy to attract greater global participation by opening up our markets. In particular, the introduction of dual membership will enable our members to streamline their operations, reduce cost and achieve greater efficiency."

Admitting New Securities Members

Singapore Exchange Securities Trading Ltd (SGX-ST), which operates the securities market, will open its membership to new Clearing Member Companies. As Clearing Members, these new members will be able to perform both trading and clearing services.

Besides a sound financial standing and repute, a Member Company of SGX-ST is required to maintain a minimum paid-up capital of S$15 million and liquid capital of S$10 million. The admission fee for each new Member will be S$200,000, with immediate effect. There will also be an annual fee of S$50,000 for every new or existing Member, starting from 1 January 2001.

As announced earlier, these new Member Companies will initially be allowed to accept trades from local clients if the value is S$500,000 or above. This limit will be reduced to S$150,000 on 1 July 2001 and then removed completely from 1 January 2002. There are no restrictions for overseas clients.

Allowing Dual Membership

Existing and new members can now access both the securities and the derivatives markets under a single legal entity. They may apply for the following types of dual membership in SGX-ST and Singapore Exchange Derivatives Trading (SGX-DT):- Clearing Member Company of SGX-ST and Corporate Clearing Member of SGX-DT; or Clearing Member Company of SGX-ST and Corporate Non-Clearing Member of SGX-DT.

Among other requirements, the minimum liquid capital required for these two categories of dual membership are S$15 million and S$13 million respectively. As for paid-up capital, the minimum required for both categories is S$15 million. These minimum financial requirements will apply until SGX implements a risk-based capital adequacy framework for the companies holding dual membership.

Under dual membership, the respective fees for SGX-ST and SGX-DT will be payable separately.