SGX proposes adjustments to the equities market

Changes include increasing minimum bid size for stocks and changing trading hours.

Singapore Exchange (SGX) is planning to consult the public on its proposed adjustments to the equities market, which seek to address market conditions and balance the diverse objectives across varying segments of market participants.

SGX is proposing to increase the minimum bid size for stocks and relevant securities trading to the $1.00 – $1.99 price range from the current 0.005 to $0.01, based on the decline in traded value in the $1.00 – $1.99 price range in recent years and lower retail participation in that price range compared to other price ranges.

SGX also wants to widen the forced order range for stocks and relevant securities from the current +/-20 bids to +/-30 bids in response to market feedback to improve order entry efficiency.

Responding to feedback that market participants prefer shorter trading hours, SGX is also proposing a one-hour mid-day break from 12:00 pm to 1:00 pm, re-timed from the earlier mid-day break from 12:30 pm to 2:00 pm that was in place before continuous all-day trading (CAT) was implemented in 2011.

The mid-day break allows SGX to retain significant overlap in trading hours with key markets in Asia, and coincides with lower trading activity of the day. During the break, market participants can enter and manage their orders and SGX will publish an indicative equilibrium price (IEP) based on orders received to facilitate price discovery and enable investors to better manage risks.

“We recognise that the three proposed changes will affect segments of the market differently, and we will continue to calibrate and implement initiatives we believe are for the long-term interests of a vibrant and resilient market,” said Loh Boon Chye, chief executive officer of SGX.

Those wishing to give feedback may send correspondence to Rules@sgx.com until 29 March 2017.