Singapore Exchange (SGX) Implementation Of T+3 From 15 March 2000

With effect from 15 March 2000, the Singapore Exchange (SGX) will shorten the settlement period for securities trading to T+3 market days which is in line with moves by major international stock markets to shorter settlement cycles. Trades done on or after 15 March will be subject to the new settlement requirements. Trades executed on trade day, 15 March, will be due on the third market day, 21 March (as 16 March, Hari Raya Haji, is not a market day). After 15 March, contract notes will be sent on the market day after trade date (T+1) while confirmation notes will be sent on the 4th market day after the trade date (T+4). In the case of when-issued trading, the settlement date will be the 3rd market day following the 1st day of ready-trading. For margin accounts opened with stockbrokers, clients are required to deposit the initial margin with their brokers not later than 3 market days from the trade date (T+3). The CPF Board recently amended the CPF Investment Scheme ("CPFIS") procedures, eliminating the need for CPF members to submit a fresh authorisation form for each CPF trade. CPF members now need only submit a standing authorisation for all their trades under the CPF Investment Scheme. With the shortening of the settlement period to T+3, there will be no room for amendments to CPF trades after trade date. Trades executed on "CPF" basis cannot be amended to "cash" basis, or vice versa, after the trade date. To prepare the industry for the switch to T+3, brokers will not be able to amend CPF trade instructions after trade date for contracts executed from 10 March. This will help their clients adjust to the new procedure, thereby minimising failed trades under CPFIS after 15 March. For trades done on or after 15 March 2000, investors will have to pay for their purchases by due date, i.e. T+3 market days, instead of the next market day following the due date, unlike current practice. If investors fail to pay by due date, their stockbrokers will force-sell the purchases on the market day after due date, i.e. T+4 market days. Sellers will have their securities debited from their accounts on the 3rd market day after the trade date (T+3). Those with insufficient securities in their accounts at the point of debit will be bought-in on the 4th market day after trade date (T+4). Investors are advised to take note of the deadlines under the shorter settlement period. Brokers have been advised of the changes and should be able to assist with any enquiry concerning the revised schedule.