SINGAPORE: The Singapore Exchange (SGX) and Bursa Malaysia will once again be
reconnected from September 18, allowing easy trading access to investors from
both sides of the Causeway.
This is according to a statement
by the ASEAN Exchanges on Monday.
Bursa Malaysia and SGX will be
the first two exchanges to connect on the ASEAN Trading Link, followed by the
Stock Exchange of Thailand.
Previously, both exchanges were
connected through the Central Limit Order Book (CLOB), which was disbanded
during the Asian financial crisis.
The ASEAN Trading Link is a
collaboration among seven Southeast Asian exchanges to promote cross-border
trading.
Through the trading link, ASEAN
exchanges are connected electronically through an order routing system.
Currently, investors in Singapore
who want to trade shares in Malaysia will have to place their orders through
their local brokers.
Their local broker would then
have to contact their counterparts in Malaysia to execute the trade.
Such trades are inefficient due
to the time lag to execute each trade and investors may end up paying more as
it incurs higher fees.
With the new trading link,
investors can gain easy access to multiple ASEAN markets from their own
country.
Investors will also have wider
investment options to tap the region's growth opportunities.
Earlier reports said that the
three bourses that will participate in the first stage of the ASEAN Trading
Link - Singapore, Malaysia and Thailand - represent approximately two-thirds of
the US$2.1 trillion market capitalisation of the seven members of the ASEAN
exchanges.
In a separate statement, SGX said
it will introduce new rules that will allow market players to have direct
access to its securities trading system.
Under the rule amendments, SGX-ST
members are required to establish measures to safeguard against potential
system malfunctions and put in place minimum credit standards for customers
with direct market access.
The changes take into
consideration views from market participants and the public following a public
consultation in April 2012.
SGX is also introducing new rules
on the participation criteria and compliance requirements for its members in
relation to the ASEAN Trading Link.
The new rules will take effect on
18 September 2012.
Yvonne Chan
- CNA/ms
Business & Investment Opportunities
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