SGX to introduce position accounts for CDP clearing members

SINGAPORE - Singapore Exchange is planning to introduce position accounts for clearing members of the Central Depository (CDP), as part of its efforts to improve the post-trade environment for Singapore's securities market.

The bourse today released a consultation paper seeking public opinions on the proposed changes, which also include amendments to trading and clearing rules in relation to position accounts.

In the paper, SGX said it wants to allow its clearing members to conduct post-trade activities - such as generating contracts and managing customers' positions - using their own back-office systems, instead of the existing Client Accounting System (CAS) SGX has been providing since te 1980s.

From late 2015, foreign clearing members will connect to CDP - a SGX subsidiary providing clearing, settlement and depository facilities - using their own in-house system for post-trade activities.

Enabling brokers to use their own choice systems to connect directly to CDP will bring several benefits, SGX said. It will improve operational efficiencies for clearing, and brokers will be able to create customised services that are otherwise not possible when connecting via CAS.

After the transition to members' own systems, the CAS will be discontinued and position accounts will be introduced to replace the existing account structure for clearing a settlement with CDP. Clearing members will be responsible for the accuracy and timeliness of market information captured in position accounts.

But the impact of these changes on end investors will be limited, SGX noted in the consultation paper.

"Consistent with the current CAS account structure, each customer who holds a direct securities account with CDP will have a specific position account identified to the customer and will continue to see their trades settle into their direct securities accounts," it said.

The consultation is open until April 13.