Singapore Exchange proposes removal of iceberg order functionality

What will it mean for investors and traders, if approved?

The proposed removal of the engine-level iceberg order functionality from the securities and derivatives markets will allow the batch execution of large trade quantities in the marketplace.

Currently, the functionality limits the release of large orders in staggered batches in an attempt to minimize any market impact of such massive trades.

SGX proposes to do away with what it considers an obsolete functionality that has corresponding equivalents in broker trading systems.

"The SGX engine-level iceberg order functionality is little used by the marketplace, as similar execution functionalities are offered in the order management systems of brokers and automated execution desks to execute block trades. As such, the continued provision and maintenance of iceberg order functionality bring little benefit to the marketplace and its removal is expected to have insignificant effect on the market. The removal of this order functionality will also enhance transparency in the opening and closing routines, as well as, in the calculation of the equilibrium price," SGX said in a release.

SGX encouraged market participants and the public to read the proposal and send in their comments before 16 January 2012. The consultation paper is available for viewing on the SGX website www.sgx.com.