On 29 November, SGX proposed shorter period for securities settlement.

  • Revisions impact clearing and settlement of securities in Singapore stock market.
  • Seek reduction of systemic risk, align clearing, settlement process to global ones.
  • They will also strengthen Singapore’s position as an international financial center.

Proposals

  • Shorter securities settlement cycle of two days (T+2) instead of three (T+3) now.
  • Reduced counterparty risk, making available securities, funds earlier for investors.
  • Simultaneous securities and money settlement, reducing risk of current time lag.
  • Enhancement for various settlement process, for example, CDP’s cash payments.
  • CDP will cash-settle on intended settlement day + 6 business days (ISD+6), any
    trade with a failed delivery that is not resolved by then; as with global standards.
  • Investors having shares in CDP direct accounts have option of giving their broker
    visibility over specific holdings, by creating a broker-linked balance with holdings.
  • Broker can then offer a personalized services like portfolio management services.

Effectiveness

  • Targeting to introduce change by H2 2018, public consultation is open to 15 January 2018.