"Introducing these routines is consistent with our efforts to improve the efficiency and transparency of our marketplace to meet our investors' needs," said Thomas Kloet, CEO of SGX. "For end user customers and investors, the new pre-open routine will allow the entry of an order before trading begins, improving its access to the market's opening. The pre-close routine will allow for improved price discovery at the close."
Pre-Open Routine
The Pre-Open Routine is a 30-minute session before regular trading starts at 0900 hrs. It comprises the Pre-Open Period and the Non-Cancel Period.
During the Pre-Open Period (0830 - 0859 hrs), buy and sell orders can be entered, amended or withdrawn. However, they will not be matched and executed during this period.
The Non-Cancel Period is between 0859 and 0900hrs, during which input, amendment and withdrawal of orders are not permitted. Orders that can be matched are executed at a single computed price, which will be the same as or better than the price at which the orders are entered. This computed price shall be the opening price for the day. Unmatched orders will be carried forward into the regular trading session.
This routine facilitates the smooth flow and matching of orders once the regular trading session starts.
Pre-Close Routine
At 1700 hrs, all unmatched orders are carried forward to the Pre-Close Routine, which runs for 6 minutes and consists of a Pre-Close Period and a Non-Cancel Period.
Similarly, orders can be entered, amended or cancelled during the Pre-Close Period (1700 - 1705 hrs).
During the Non-Cancel Period (1705 - 1706 hrs), orders are matched and executed at a closing price computed for the day, while unmatched orders will become void.
This routine makes it difficult for anyone to manipulate closing prices with a single transaction at an unusually high or low price, just before the trading session ends.
