SGX Shifts Focus to Investor Accessibility

The Singapore Exchange (SGX), which in the last month of 2018 launched its new post-trade system powered by LSEG Technology, is now focusing on “smaller” projects, making processes more efficient and seamless for investors and fund raisers. 

In the past four years, the exchange has prioritized major launches. “We upgraded our derivatives system, we launched the new post-trade system; we have also developed SGX Bond Pro (a screen-based institutional-only electronic bond trading platform). There’s been a series of big projects that we have launched,” Boon Chye Loh, CEO of SGX said in reply to a question posted by WatersTechnology during SGX’s second quarter earnings analyst and media briefing. Loh added that SGX will continue to invest in technology, but there will not be “that many” big projects coming through. 

“We started way before this, on the digitalization journey, but what you see is an externalization of that. Whether it is post-trade [or something else], being able to work with the industry to make [the exchange] even more efficient, seamless, online and to get the access through easily is where we will be accelerating those efforts,” he said. “I think you will see a shift from us in terms of large project system launches to really making the investing journey coming to SGX and working with the whole ecosystem to make investing and fund raising a joy,” he said.

Loh declined to reveal specific projects the exchange is working on, but said, “Think of it as our desire to allow investors who want to invest into the market a more seamless and digital way, and also for any issuers who are listed on the exchange, whenever you do any corporate action and services, we just want to make it a lot easier.” 

In December 2018, LSEG Technology implemented SGX’s new post-trade system, which involved brokers, custodian banks, settlement banks, registrars and retail investors. 

During his presentation, Loh said since the launch of the new post-trade system, members are now able to use their own back-office systems to connect to SGX’s Central Depository (CDP). “There is now real-time exchange of information for trade allocation and settlement instructions which enable our members to operate more efficiently,” he said. 

“It provides the foundation for us going forward to have an efficient and seamless delivery of digital services with full day availability. [We] will be able to expand into SDAV [securities daily average value] independent services, and into other new areas that will allow investors to better utilize their assets that are safe kept with CDP for additional returns. [Such] services will include securities borrowing and lending, FX conversion services and some other market data services,” he said. 

Sutat Chew, head of equities and fixed income said in reply to a question posted by WatersTechnology that since the launch, SGX has been able to launch new services such as broker-linked balances. 

He said additional services will be introduced gradually. As for maintenance, Chew said, “It has been a very long cycle time before we had the entire industry migrate to the new post-trade system in December. We certainly don’t expect any immediate refresh of this.”