SGX picks London Stock Exchange's IT arm to overhaul post-trade system

The Singapore Exchange (SGX) is completely overhauling its clearing, settlement and depository services for cash equities and bonds and has picked London Stock Exchange's (LSE) technology arm MilleniumIT to provide a new post-trade system,

SGX will be the first bourse in Asia to implement the new system based on MilleniumIT's post trade technology. The change will be carried out in phases from end-2015.

"This is not just an upgrade. This is a big shift for the market and will transform the infrastructure of Singapore's financial market," SGX chief executive Magnus Bocker told The Straits Times in an interview.

The new post-trade system will replace the current outdated technology. It is also aimed at boosting the currently uninspiring trading volumes in equities, a top item on Mr Bocker's agenda for Southeast Asia's largest bourse.

The system will shorten time to roll out new products and allow brokers to have better access to the system, giving them more flexibility and efficiency.

"The current technology is far too cumbersome. This is the final little piece (in terms of technology) for us to become one of the world's leading exchanges," Mr Bocker said.

The revamp also includes an overhaul of the Central Depository (CDP) system. Retail investors will be able to grant their brokers access to information on all their investments held with the SGX's securities depository, said the exchange in a statement on Thursday.

SGX will work with MilleniumIT, a technology services company acquired by the LSE in 2009, to essentially clear, settle and safe-keep assets in a faster and easier way in multiple currencies across various asset classes for its international mix of members.

The new system will suppport the exchange's domestic expansion plans, enabling it to provide additional post-trade services through the securities depository. Regionally, it will allow for better linkages with other markets, depositories and post-trade service providers, said SGX.

Mr Bocker said the move will also be the biggest implementation of MilleniumIT's post-trade technology to date.

With this latest arrangement, there are now 32 organisations around the world which employ MilleniumIT's technology, including Argentina's Central Securities Depository and Norway's Oslo Bors.