How New SGX Regulations Will Affect You – 4 Aug 2014
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We have distilled the latest SGX Regulations announced on 1 Aug 14 and highlight the salient ones that will affect you, the retail investor
Upcoming Changes in Singapore Stock Market Regulations that will affect you.
A minimum trading price of S$0.20 as a continuing listing requirement for company shares listed on the SGX Mainboard – While this tries to address risks of low-priced securities being susceptible to speculation and manipulation, it doesn’t mean that you can assume it will no longer happen. Most affected companies are likely to consolidate their shares so that their share price is well and above S$0.20 unless they can boost their share price organically through good financial performance. Expected date of implementation: Mar 2015. Companies will have up to 4 years from Mar 2015 to comply. Companies that don’t comply may be forced to delist.
1) Minimum price as a continuing listing requirement for company shares listed ONLY on the SGX Mainboard
2) More cash outlay required
Securities intermediaries like your brokerages houses will have to collect at least 5% of collateral from you for trading of listed company shares. Exempted from this rule are institutional investors (Big boys, not you and us), trades settled through delivery-versus-payment mode, and funds from the Central Provident Fund and Supplementary Retirement Schemes.
For those affected, you will have to keep cash collateral in trust accounts with licensed banks in Singapore at all times, except for cash collateral collected in relation to trades on overseas securities exchanges such as NASDAQ.
Expected date of implementation: Mid 2016
3) Expensive stocks become “cheaper” to buy
SGX will reduce the board lot size for securities listed on SGX from the existing 1,000 shares to 100 shares.
Expected date of implementation: Jan 2015. More details will be provided by end August 2014.
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