SGX calls for feedback on new securities trading proposal

The 'trade at close' will be rolled out by July 2019 if adopted.

Singapore Exchange (SGX) is open for public feedback regarding the proposed introduction of a new trading session for the securities market which will take place after the closing auction routine ends, an announcement revealed.

The ‘trade at close’ (TAC) is proposed to take place after the closing auction routine ends. During the five-minute-long TAC trading session, participants will be able to execute orders only at the closing auction price set during the closing auction routine.

“The introduction of the ‘trade at close’ session will allow investors to trade at a fixed price, namely the closing price of the security, while preserving the integrity of the price discovery process,” SGX head of market services Nico Torchetti said.

The TAC session will apply to the ready and unit share markets.

With the TAC session, SGX will shorten the trading phase preceding the closing routine by five minutes to 4.55pm on a normal trading day, or 11.55am for half-day trading. This will allow the market closing time to remain at 5.06 pm and 12.06 pm, respectively.

Based on SGX proposal, TAC will not occur if there is no closing auction price.

Moreover, matching for orders will only be done at the closing auction price and according to time priority. These orders can be amended but must all be priced at the closing auction price.

“The closing auction price will increase in importance following the introduction of the TAC session,” SGX noted. “SGX will continue to be vigilant on the surveillance front,”

Feedbacks will be welcomed until 11 October. If adopted, the TAC session will roll out by July 2019.

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