Extensive changes for Singapore's stock market after last year's penny stock rout

Share trading in Singapore is headed for major changes following a wide-ranging consultation exercise which regulators had with the investment community since February. -- PHOTO: BLOOMBERG
Share trading in Singapore is headed for major changes following a wide-ranging consultation exercise which regulators had with the investment community since February. -- PHOTO: BLOOMBERG

Share trading in Singapore is headed for major changes following a wide-ranging consultation exercise which regulators had with the investment community since February.

From next year, mainboard-listed shares will be subject to a minimum trading price of 20 cents.

Another fundamental change will see the current contra trading practice replaced with a collateralised system of trading by mid-2016 when the Singapore Exchange launches its new Post-Trade system.

This means that an investor will need to post a 5 per cent collateral before he is allowed to trade shares. However, with the SGX's Post-Trade System, an investor's shares can be tagged as collateral without them leaving his CDP account. This minimises his inconvenience of transferring the shares to the brokerage to be pledged as collateral.

From mid-2016, an investor who has shorted at least $1 million, or 0.05 per cent, of a listed firm's shares will be required to make a report. All these "short" positions will then be added up and published on a weekly basis without disclosing the investors' identities.

By the end of this year, the Securities Association of Singapore - which represents brokerages serving retail investors - will develop guidelines on the publication of trading restrictions imposed on their customers for trading of SGX-listed shares.