09.21.2018

SGX Proposes “Trade at Close” Session

09.21.2018

Singapore Exchange (SGX) is seeking public feedback on the proposed introduction of a new trading session for the securities market, the “trade at close” (TAC), which will 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 TAC session will apply to the ready and unit share markets.

“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. This is part of SGX’s ongoing commitment to bettering its market structure and enhancing trading for both existing and potential participants,” said Nico Torchetti, Head of Market Services.

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.

SGX is proposing three main features for the TAC trading session:

  1. The TAC session will not occur if there is no closing auction price;
  2. Orders will match at only the closing auction price and according to time priority; and
  3. 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 will continue to be vigilant on the surveillance front.

The public can submit feedback on the proposal to introduce the TAC trading session till 11 October 2018. Full details of the public consultation including the questions posed are found here. If adopted, SGX will implement the proposed TAC session in July 2019.

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