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Singapore Exchange (“SGX”) is inviting public comment on the rule amendments to introduce the Pre-Settlement Matching Service (“PSMS”), which will automate the matching of settlement instructions of trades among Clearing Members and Depository Agents (“DAs”).
The proposed PSMS is part of SGX Prime, an open access infrastructure that facilitates straight-through processing of trades for the securities market via the Exchange’s clearing and settlement system. The automated PSMS will enhance market participants’ operational efficiency and minimise errors by replacing the manual affirmation of settlement instructions.
To facilitate the introduction of PSMS, the Exchange is proposing the following key amendments to its settlement frameworks:-
- To streamline Delivery-versus-Payment (“DVP”) transactions such that DAs are able to send settlement instructions without having to differentiate between onexchange trades, turnaround trades or off-market transfers.
Streamlining settlement instructions and including off-market transfers in the DVP settlement process will improve the overall efficiency of the system and reduce operational risks for DVP participants.
- To credit purchased securities for all Free-of-Payment (“FOP”) and CPF transactions respectively to the “Free” instead of “Available” balance of DAs’ subaccounts and the CPF omnibus sub-accounts.
This will allow the adoption of standard industry message protocols and facilitate the open access capability. Clearing and settlement of exchange trades through the CDP under Inter-Broker Settlement remains unchanged.
Market participants and members of the public are encouraged to participate in this public consultation. The consultation paper which sets out the proposed amendments to the DVP Rules and CDP Clearing Rules will be available on www.sgx.com, from 28 February 2008 to 20 March 2008.
All feedback and suggestions for the proposed changes should reach us by 20 March 2008 via email and either by post/courier or fax:-
Email: rules@sgx.com
Post/Courier: Singapore Exchange Limited
2 Shenton Way, SGX Centre 1, #19-00, Singapore 068804
Attn: Mr Vance Ng, Risk Management and Regulation
Ms Jessie Toh, Market Services
Fax: 6535 5573
