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MAS, SGX propose measures to strengthen securities market

The Monetary Authority of Singapore and the Singapore Exchange have proposed measures to strengthen the securities market, including minimum trading prices, new collateral rules and short-selling reporting.

SINGAPORE: The Monetary Authority of Singapore and the Singapore Exchange have proposed measures to strengthen the securities market in Singapore.

To promote orderly trading, they have proposed that punters with open or unsettled positions be made to put up collateral when trading.

The proposal is one of several measures put up by MAS and SGX to promote more responsible investing in Singapore-listed stocks.

A consultation paper was issued on Friday.

The paper included proposals such as setting a minimum trading price for stocks listed on the SGX Mainboard to reduce volatility.

The regulators are proposing to delist stocks that do not meet a minimum trading price. The initial range could be around S$0.10 to S$0.20, but the consultation paper noted that this could impact 10 to 230 issuers.

Jimmy Ho, president of The Society of Remisiers, commented: "For a start, the most serious objection should come from the removal of the 'penny', penny stocks.

"The investors don't want to see that what they have purchased earlier on get washed away. No matter how low the share price is, there's still hope of a revival." 

A third significant change proposed is to get stockbroking firms to disclose trading curbs imposed on any stock by announcing it through the SGX website.

The proposals also coincide with changes announced by the SGX, which include lower clearing fees from May 2.

Separately, the SGX announced other new rules that will take effect from March 3.

These include the SGX publishing a "trade with caution" announcement whenever a company is unable to explain unusual trading activities.

In addition, the listed firm's board of directors will also be required to approve the company's reply to a public query by SGX.

These new measures come in the wake of the penny stocks saga in October last year when shares of SGX-listed Blumont Group, LionGold and Asiasons fell sharply in a matter of days, wiping out billions of dollars in market value.

In a statement, the MAS said Singapore's stock market was fundamentally sound and the consultation is aimed at initiating a conversation with stakeholders to strengthen regulation.

Market regulators are giving industry players about three months to give feedback on the proposals. 

Lee Chuan Teck, assistant managing director of capital markets at MAS, said: "This consultation allows us to have a conversation with all stakeholders to see how we can make the market even stronger, and in a sense, more mature.

"No decision has been taken, we welcome all views, and we'll consider all views carefully before making any decision."

SGX CEO Magnus Bocker said: "This joint consultation -- combined with the enhanced role for SGX when it comes to regulatory tools, combined also with this fee revision -- is crucial for us to become a stronger market. "

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