FACTBOX-Singapore proposes securities market reform

Fri Feb 7, 2014 6:58am EST

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SINGAPORE, Feb 7 (Reuters) - Singapore's central bank and
Singapore Exchange Ltd on Friday announced proposals
on new trading rules. 
    The changes proposed jointly by the Monetary Authority of
Singapore and Singapore Exchange (SGX) are listed below. The
proposals are open for consultation until May 2, 2014.

    * MINIMUM TRADING PRICE
    - Minimum trading price for stocks listed on the main board
of SGX should be imposed, possibly in the range of
S$0.10-S$0.20.
    - A period of 36 months would be provided for issuers to
take remedial actions including share consolidation.
    
    * COLLATERAL REQUIREMENTS 
    - Securities intermediaries should impose minimum collateral
on their customers, at a minimum 5 pct of open positions.
    - Customer cash collateral should be held in trust accounts
with licensed banks in Singapore at all times.
    
    * SHORT POSITION REPORTING REQUIREMENTS
    MAS and SGX propose two options:
    - In aggregate position reporting, net short positions of at
least 0.05 percent or S$100,000 of issued shares of a listed
entity must be reported weekly. Aggregated positions will be
published.
    - In public disclosure of short positions, net short
positions of at least 0.5 percent of issued shares must be
reported, as well as subsequent changes in position of 0.1
percent or more. The short position holder's identity and
position size will be published.
    
    *     TRANSPARENCY OF MARKET INTERVENTION MEASURES
    Trading restrictions imposed by securities intermediaries
for SGX-listed securities should be announced through the SGX
website.
    
    *     ESTABLISHMENT OF INDEPENDENT LISTING AUTHORITY
    An independent Listing Advisory Committee would be
established to consider listing policy issues and listing
applications that meet specified referral criteria.
    
    * ESTABLISHMENT OF INDEPENDENT COMMITTEES ON DISCIPLINE,
APPEALS 
    Independent Listings Disciplinary Committee and Listings
Appeals Committee should be set up to boost powers to enforce
regulatory actions against breaches of listing rules.
    The range of regulatory sanctions for listing rule breaches
should be expanded to include powers to impose fines, restrict
the activities that issuers may undertake, as well as to make
offers of compositions for minor and technical breaches. 
    
    Separately, SGX announced measures to strengthen market
transparency, effective from March 3, 2014:
    * An issuer's board of directors will be required to approve
the issuer's reply to a public query by SGX;
    * SGX will publish a "Trade with Caution" announcement
whenever issuers are unable to explain the trading activities
which SGX is querying;
    * Issuers will be required to notify SGX of discussions or
negotiations that are likely to lead to a takeover, reverse
takeover or a very substantial acquisition.
    
    Also, SGX plans to revise its fee structure to facilitate
market-making and improve liquidity, effective on May 2, 2014:
    * The clearing fee will be reduced by 20 percent to 0.0325
percent from 0.04 percent of contract value;
    * Transfers and onward settlement fees pursuant to
on-exchange trades will be charged a fee of S$30;
    * Transfers and onward settlement fees pursuant to
off-exchange trades will be charged a fee of 0.015 percent of
the value of the transaction, subject to a minimum of S$75. 

 (Compiled by Rujun Shen. Editing by Jane Merriman)
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