Saturday, August 2, 2014

Four Upcoming Major Changes To Share Trading In SIngapore

In the wake of the penny stock rout last October, both MAS and Singapore Exchange has jointly proposed a couple of major changes to the share trading rules in Singapore. The objective is simple : making share investment more accessible while reducing highly speculative trading.   

Following are the four key upcoming changes :

1. Reduced Lot Size (from January 2015) 

From January 2015, the lot size of 1,000 shares will be reduced to 100 shares. This will benefits retail investors the most as the blue-chip counters will be more accessible to us.

2. Minimum share-price for mainboard-listed shares (from March 2015)

From March 2014, all mainboard-listed shares will need to have a minimum trading price of 20 cents. It will be carried out over 12-month transitional period. So far, an estimated 200 firms may be affected by this rule.

3. No more "contra trading" without collateral (from mid-2016) 

From mid-2016, the contra trading will be replaced by collateralised trading via SGX's new Post-Trade System. Under the new system, an investor need to post at least 5 percent collateral (in cash, stock or bank guarantee) on unsettled positions by the end of the trading session. For example, if you are buying $18,000 worth of share, you need to put up $900 as collateral.

4. The need to report substantial "short" position (from mid-2016)

From mid-2016, an investor who "shorted" at least $1 million or 0.05% of a company's share will be required to make a report. On weekly basis, all these positions will be published (without the disclosure of the investors' identities).

Being a small retail investors, I am welcoming all these changes (especially #1). However, for #2, what would happen if a company's share price drop from above to below the benchmark (say from 25 cents to 15 cents)?



  1. The reduction of the lot size will attract many more smaller retail investors and punting I guess.

    1. Definitely so, smaller retail investors will have chance to buy blue chips which I think is a good thing

  2. hi there. do you think SGX implementing a reduced lot size to 100 shares per lot will make it easier for retail consumers to sell too? because sometimes when bonus issues are given out, consumers will not be able to sell until they accumulate 1000 shares.

    1. My simple answer is YES! With more investors joining the force, it will inadvertently increase the liquidity of the stocks.


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