SINGAPORE, April 10 Singapore Exchange Ltd (SGX)
in June plans to introduce a new fee structure for
trading securities to increase liquidity and encourage retail
investors to trade higher-priced stocks.
Singapore is a major financial centre but the local equity
market has struggled in the past six months with falling trading
volumes amid a dearth of major new listings. Its most actively
traded shares are often "penny stocks".
The bourse's predicament was brought to the fore when three
stocks crashed in October, losing around S$8 billion ($6.41
billion) over two days after large run-ups in their share
SGX and the central bank responded by proposing measures
such as raising the minimum share price and requiring traders to
disclose short-selling, or share borrowing.
In one of the first initiatives to be implemented, SGX from
June 1 will lower the cost of clearing trades in a stock or
other listed security to 0.0325 percent of the value from 0.04
"We want to move retail investors up the chain towards
higher value," SGX President Muthukrishnan Ramaswami said at a
briefing on Wednesday.
Another change, however, could make trading more expensive
for institutional investors. The exchange has removed a S$600
cap on total clearing fees, meaning institutional investors
placing trades above S$1.85 million will face higher charges.
SGX is also trying to curtail off-exchange activity by
raising the cost of trades settled "off market" to 1.5 percent
of their value, from the current situation where they pay the
same S$30 fee charged for "on market" trades.
By the time the new fee structure is in place, the exchange
hopes to have several banks and trading houses signed up to a
new incentive scheme to be "market makers". That will give them
rebates on clearing fees, with higher rebates for trades on more
"We are so far behind as a market place that this is the
next place we have to go," said Ramaswami.
($1 = 1.2481 Singapore Dollars)
(Reporting by Rachel Armstrong; Editing by Christopher Cushing)