SGX to launch new securities settlement and depository system

It will cut its securities settlement cycle from three to two days.

Singapore Exchange (SGX) is set to launch a new securities and depository framework on 10 December to cut its securities settlement cycle to two days (T+2) from three (T+3) and enable simultaneous settlement of money and securities, an announcement revealed.

According to SGX, moving from a T+3 to a T+2 settlement cycle will liken Singapore’s stock market with that of global markets such as Australia, Hong Kong and US.

“With the new settlement and depository framework, securities and funds will be made available to investors earlier, whilst reducing risks across systems and markets,” SGX executive vice president and head of equities and fixed income Chew Sutat said. “Our new system will also enable us and our securities members to enhance services for the market.”

The new system will also allow a broker-linked balance feature that will allow investors to give their chosen brokers visibility over specific securities, SGX added.

“This will provide brokers the ability to offer more personalised products and services to their clients,” SGX noted.

Meanwhile, Investors can also expect improvements like the streamlining of Central Depository (CDP) notifications and simultaneous settlement of securities and money.

The changes were made following feedback from SGX’s public consultation in November 2017.