SGX to change securities settlements process

It will shorten the cycle to two days instead of three days.

Singapore Exchange (SGX) plans to make changes in the clearing and settlement of securities in the Singapore stock market.

According to a press release, the proposed improvements for risk reduction include a shorter securities settlement cycle of two days instead of three days.

"The shorter settlement period reduces counterparty risks market-wide and avails securities and funds earlier for investors. HKEx, NYSE and the EU already operate a T+2 settlement cycle," SGX said.

The exchange also proposes a simultaneous securities and money settlement. This could reduce risk arising from the current time lag between money and securities settlement.

An enhancement of other settlement processes is also being planned.

Moreover, SGX is also proposing that investors with shares in their Central Depository (CDP) direct accounts have the option of giving their broker visibility over specific holdings by creating a broker-linked balance of these holdings.

The broker can then offer more personalised services such as portfolio management services.

SGX is targeting to introduce the changes by the second half of 2018. The public consultation is open until 15 January 2018.

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