Singapore Exchange Announces Schedules For Opening Access And Liberalising Commissions

Singapore Exchange (SGX) yesterday announced the schedules for opening access and liberalising commissions for securities trading. These schedules have been arrived at following close consultation with the Financial Center Advisory Group ("FCAG"), an international panel of prominent industry practitioners appointed by the Monetary Authority of Singapore. As announced previously, SGX will phase in fully open access to all securities brokers by January 2002. This is in line with the recommendations of the SES Review Committee in July 1998. Currently, international members cannot accept trades from local clients unless the value is $5 million or above. With effect from 1 January 2000, this limit will be reduced to $500,000 and will be totally removed a year later on 1 January 2001. Meanwhile, new members who meet prudential requirements may be admitted from 1 July 2000 with an initial local trading limit of $500,000 similar to the International Members. This limit will be reduced to $150,000 after one year, and eventually removed on 1 January 2002. By that time, there will be no restriction on qualified players who meet our regulatory requirements and wish to trade on our market. With effect from 1 January 2000, commissions for trades above $150,000 will be fully negotiable, while trades below $150,000 will be subject to a minimum of 0.75% . For approved fund managers, commissions on all trades will be fully negotiable, regardless of size. For this reason, rebates on such trades will be discontinued. Commissions on all trades will be made fully negotiable on 1 January 2001. In addition, SGX will evaluate the feasibility of fully liberalising commissions for online trades before January 2001. Lower commission rates for online trades have long been the norm in developed markets where commissions are determined solely by competitive pressures. SGX will assess the time required for the industry to improve its systems capability in preparation for the significant increase in trading volume expected, and announce its findings shortly.