The consultation paper, which is open for public comments, is basically suggesting that the Central Depository's (CDP) clearing fund be increased.

Think of this fund as a buffer against what is known as systemic risk - if one firm fails to meet its obligations, it could affect other companies in the sector.

If the firm goes under due to its need to cover its losses, it could hit other firms as the industry would face settlement risk.

The CDP clearing fund comprises funds from the CDP itself, which operates the clearing system by acting as the counter-party for every trade matched on the bourse's trading platform.

It also includes insurance contributions and funds from its 24 clearing members. These include BNP Paribas Securities (Singapore), Citigroup Global Markets Singapore Securities, DBS Vickers Securities (Singapore), Phillip Securities and JP Morgan Securities Singapore.

Under the proposed changes, the CDP will increase its cash contribution from $25 million to $30 million.

Member firms, which must contribute a total of at least $15 million between them, will have their contributions raised to at least $30 million under the new changes.

Of that total amount of $15 million, individual firms now contribute at least $250,000 while those with a higher trading turnover chip in more. This will rise to at least $1 million for each company with the bigger operators up for more.

The SGX said yesterday it would review the contribution structure one year after it is implemented. If the securities daily average value remains above $1 billion, it plans to raise members' total contribution to $40million, from the proposed $30 million.

Read the full story in Tuesday's edition of The Straits Times.