The linkage will facilitate the trading of securities listed on SGX by investors in Malaysia and similarly for securities listed on Bursa Malaysia by investors in Singapore. It will also provide brokers access to market and trading information and allow them to transmit orders through their local trading terminals directly into the electronic trading systems of the other exchange. The trading link is expected to go live by end 2005.
Both exchanges are also exploring derivatives trading linkage and shared IT services in areas such as data centre, back-up facilities and other IT infrastructure.
Mr Hsieh Fu Hua, CEO of SGX said, "We are happy to embark on this initiative with Bursa Malaysia. This linkage follows the SGX-ASX model in which orders are channeled into, and executed on the home exchange. This is a preferred alliance model as investors are able to enjoy the aggregated liquidity in the home market."
"We expect the linkage to contribute to greater liquidity in our market, hence benefiting all players. This model pools liquidity for the home market by expanding access points internationally. Furthermore, with an officially sanctioned linkage, investors' interests are protected as they are effectively trading in the home market," said Mr Yusli Mohamed Yusoff, CEO of Bursa Malaysia.
Both exchanges have obtained the in-principle support of their respective regulatory authorities to jointly work on this trading linkage.
