SGX proposes raising minimum bid order for some stocks, bringing back lunch break

The Singapore Exchange said it is proposing to increase the minimum bid size for stocks and relevant securities trading in the S$1.00 - S$1.99 price range from the current S$0.005 to S$0.01.
The Singapore Exchange said it is proposing to increase the minimum bid size for stocks and relevant securities trading in the S$1.00 - S$1.99 price range from the current S$0.005 to S$0.01.PHOTO: ST FILE

SINGAPORE - The Singapore Exchange (SGX) is consulting the public on three proposed stock market changes:

- Increasing the minimum bid size for stocks and relevant securities trading in the S$1 to S$1.99 range;

- Widening of the forced order range for stocks and relevant securities; and,

- Changing trading hours via a mid-day break from 12pm to 1pm.

On minimum bid size:

SGX said it is proposing to increase the minimum bid size for stocks and relevant securities trading in the S$1-S$1.99 price range from the current S$0.005 to S$0.01.

 

The proposed change is based on a decline in traded value in the S$1 to S$1.99 price range in recent years and lower retail participation in that price range relative to those of other price ranges, said SGX.

It also considered market feedback that a wider minimum bid size could generate more viable trading opportunities taking into consideration total transaction costs for some segments of the market, such as retail traders. This in turn may promote a more balanced mix of participants for securities in this price range, said the market operator.

On forced order range:

SGX is proposing 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.

On lunch break:

SGX said market feedback indicates that while the benefits of continuous all-day trading (CAT) remain relevant, market participants prefer shorter trading hours.

The proposed one-hour mid-day break from 12pm to 1pm is re-timed from the earlier mid-day break from 12.30pm to 2pm in effect before CAT was implemented in August 2011.

SGX said the new timing "allows us to retain significant overlap in trading hours with key markets in Asia, which was one of the key intended benefits of CAT, and coincides with the generally lower trading activity of the day".

During this break, market participants can continue to enter and manage their orders and SGX will publish an indicative equilibrium price (IEP) based on the orders received in the order book to facilitate price discovery and enable investors to better manage their risks.

Said SGX CEO Loh Boon Chye: "We recognise that the three proposed changes will affect segments of the market differently. We look forward to an active participation in the public consultation and collectively working towards a common goal of enhancing the equities market."

The public consultation will open till March 29.

Members of the public can e-mail their feedback to to Rules@sgx.com, or by mail to the exchange, with attention to "Regulatory Development & Policy".