SINGAPORE: Singapore Exchange (SGX) launched a public consultation on Wednesday (Mar 8) on bringing back a lunch break for traders and increasing the minimum bid sizes for some stocks.
The proposed lunch break will take place from 12pm to 1pm. SGX in 2011 scrapped the mid-day break – which was then from 12.30pm to 2pm – saying it could boost trading by as much as 10 per cent.
“Market feedback indicates that while the benefits of continuous all-day trading remain relevant, market participants prefer shorter trading hours,” SGX said in a news release.
“The timing of the proposed mid-day break allows us to retain significant overlap in trading hours with key markets in Asia, which was one of the key intended benefits of continuous all-day trading, and coincides with the generally lower trading activity of the day,” it added.
During the break, market participants can continue to enter and manage their orders. SGX will publish an indicative equilibrium price based on the orders received in the order book to facilitate price discovery and enable investors to better manage their risks, it said.
The exchange operator has also proposed to increase the minimum bid size for stocks and relevant securities trading in the S$1 to S$1.99 price range from the current S$0.005 to S$0.01.
The proposed change is based on a decline in traded value and lower retail participation in the S$1 to S$1.99 price range, SGX said.
“A wider minimum bid size could generate more viable trading opportunities taking into consideration total transaction costs for some segments of the market, such as retail traders. This in turn may promote a more balanced mix of participants for securities in this price range,” it said.
SGX also said it wants to widen the forced order range for stocks and relevant securities from the current +/- 20 bids to +/- 30 bids, in response to market feedback to improve order entry efficiency.
“SGX constantly reviews its market structures, rules and policies, taking into account changing market conditions, regular dialogue with the industry, and supportive data analysis,” said CEO Loh Boon Chye.
The public consultation is open until Mar 29, and feedback can be sent to rules@sgx.com.
