CFA Society Singapore
SINGAPORE (Oct 10): The Singapore Exchange (SGX) is seeking public feedback on a raft of proposed changes to its rules on securities trading and market practices.
This will be conducted via a public consultation which will remain open until 7 Nov.
In a Tuesday filing, SGX says its proposed changes were developed in active consultation with its members.
Objectives of the proposed changes include adopting a more principles-based approach as well as ensuring that its rules remain relevant as market practices evolve.
To ease the barrier of entry to welcome new remisiers into the industry, SGX has suggested giving trading members full flexibility to set the amount of security deposit required of a remisier after conducting a credit assessment, while allowing them to negotiate the terms of their agreement with their remisiers.
SGX also intends to cease mandating senior management pre-approval for staff securities trading, so long as measures are in place to guard against the misuse of confidential information.
Additionally, trading representatives (TRs) who are engaging in their own business activities, apart from securities trading, will also no longer require SGX’s oversight as members will be responsible for ensuring that such activities do not conflict with the TR’s trading activities and compromise on customer interests.
Rules requiring a member to obtain written customer acknowledgement each time a TR starts mobile broking will be removed, although members will still be required to the provide appropriate risk disclosures to customers.
According to SGX, it also intends to introduce a less prescriptive approach to its requirements governing customer account opening, by giving members the responsibility of ensuring that any account opening is duly authorised.
Currently, management oversight of a securities broking firm is vested upon persons who are registered as approved executive directors with SGX. While registering of the CEO is currently practised by all members, many also register their executive directors with SGX.
As such, SGX is proposing to require only CEO registration as this person is ultimately responsible for the day-to-day management of the entire member firm and its activities.
SGX believes the proposed changes will clarify current market practices and situations, while certain exchange practices will be formalised in the process. The bourse operator is also looking to introduce or amend product definitions to clarify the applicability of the rules, given the definitional changes in the Securities & Futures Act.
Shares in SGX closed 3 cents higher at $7.64.