On June 10 2008, Singapore Exchange Limited (SGX) announced that it will admit banks in Singapore as clearing members of its securities market with effect from July 1 2008. The membership will allow them to offer clearing services to SGX Trading members and their customers.
Banks in Singapore licensed by MAS under the Banking Act are allowed to become SGX Securities Clearing Members under the new rules. With the new rules, banks no longer need to incorporate a separate company in order to apply for SGX clearing membership. However, banks who wish to become clearing members must be licenced under the Banking Act, and they are required to meet the SGX's admission criteria.
As a consolidated entity, banks can manage their capital centrally and use their resources more efficiently. With banks as an independent third-party clearing provider, exchange participants have more flexibility in their business operations.
SGX says the rule amendments will cater to the evolving needs of market participants and support its efforts to enhance market access and efficiencies.
The senior vice president, Head of Intermediaries and Market Access of SGX, Rama Pillai, believes that the rule amendments will help widen the pool of market participants to include banks as clearing members and grow their customer base to build a more vibrant securities market. In addition, he says the non-clearing participants can now choose to focus on their core business and save costs arising from clearing and settlement.
Please visit www.sgx.com for full details of the admission criteria and the amendments of the CDP rules.