FACTBOX-Singapore proposes securities market reform
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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