In this guide to the Singapore Exchange (SGX), we explain what the SGX is and how it works. We’ll also discuss membership requirements and fees for using this exchange.
What is the Singapore Exchange (SGX)?
The Singapore Exchange (SGX) is an investment holding company that operates one of Asia’s leading financial marketplaces.
SGX operates the most liquid, offshore marketplace for trading the major equity indexes of China, India, Japan, and the Association of Southeast Asian Nations (ASEAN). The exchange plays an important role in providing liquidity in the Asian marketplace.
How Is SGX Regulated?
SGX oversees the regulation of the exchanges and clearinghouses it operates, and in that role, functions as a self-regulatory organization (SRO). SGX also works closely with three outside agencies that have regulatory oversight in the securities industry:
- Monetary Authority of Singapore (MAS): An integrated supervisor overseeing all financial institutions in Singapore — banks, insurers, capital market intermediaries, financial advisors, and the stock exchange.
- Commercial Affairs Department (CAD): Part of the Singapore police force that supports the nation’s Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) framework.
- Accounting and Corporate Regulatory Authority (ACRA): The national regulator of business entities, public accountants, and corporate service providers.
SGX has adopted three key values that inform how it conducts regulation of its markets:
|We conduct ourselves with integrity.||We are energized, empowered, and committed to deliver our best.||We listen to our stakeholders and anticipate their needs.|
|We work as an inclusive team and treat each other with respect.||We have the courage to think big and the tenacity to make things happen.||We deliver with excellence.|
|We are responsible for a fair, orderly, transparent, safe, and efficient market infrastructure.||We aim to transform opportunity into reality.||We create value for our people, businesses, and economies.|
SGX self-regulatory functions cover the following areas:
|Listing Compliance||Ensuring that listed companies comply with exchange rules|
|Member Supervision||Admitting and monitoring members to ensure compliance with SGX rules.|
|Regulatory Development and Policy||Providing input for SGX initiatives and helping craft new solutions and policies.|
|Listing Policy and Product Admission||Developing the listing policy of SGX and managing the SGX listing manual.|
|Enforcement||Investigating suspected serious infractions of the SGX Rules as well as enforcing the SGX Rules by taking appropriate disciplinary actions for violations.|
|Whistleblowing Office||Receipt, assessment and management of whistleblowing allegations and handles all external communications with the whistleblowers.|
|Strategic Planning Office||Identifies and prioritizes strategic areas of focus for SGX RegCo, and conducts horizon scanning to help in the development of regulatory responses to changes in the operating environment.|
Traders can consult the regulatory section of the SGX website to learn more about each of these regulatory functions.
Trading Products on SGX
SGX offers a full range of products and services, including:
|Securities||Stocks, Real Estate Investment Trusts (REITs), Business Trusts, ETFs, Leveraged and Inverse Products (L&I), Daily Leverage Certificates (DLCs), Structured Warrants, American Depositary Receipts (ADRs)|
|Fixed Income||Retail and Wholesale Fixed Income Securities, OTC Trading|
|Derivatives||Commodities, Equities, FX & Interest Rates|
|Indices||Equity, Derivative Indices (Commodity, Equity & Fixed Income Futures), Fixed Income Indices, Custom Indices (Societe Generale), Straits Times Indices, MSCI Singapore, and Cryptocurrency Indices (iEdge Bitcoin Index and iEdge Ethereum Index)|
|Other Services||Research, Education, and Regulation, Market Data and Market Connectivity|
SGX’s Trading Platform
The SGX conducts trading on its exchange with two different trading engines. Each one is designed for trading specific asset classes:
Securities traders on the SGX use the REACH trading engine developed by NASDAQ-OMX and built on its Genium platform. This platform offers high speed and reliable access.
Traders can purchase one of two REACH access plans depending on their needs:
- SGXAccess Fix is designed to allow traders to connect to SGX with minimal reconfiguration or redevelopment of their trading systems.
- SGXAccess API offers faster trading speeds and lower latency. This connection gives traders access to the market through a proprietary application interface.
Derivatives traders on the SGX use the Titan trading engine developed by NASDAQ-OMX and built on its Genium INET version 4 platform. Titan also allows for derivatives clearing.
This platform also offers high speed and reliability and can support a range of functions including order sending, market feed, quotations, and drop copies of transactions.
Traders can purchase one of two Titan access plans depending on their needs:
- Titan DT API provides access to the Titan DT trading engine using a proprietary application interface on the Genium trading platform. Trading participants can choose access speeds ranging from 10 to 50 transactions per second. Traders can access this service via one of four ways (see below).
- Titan DT OUCH/ITCH offers faster trading speeds and lower latency. This connection gives traders access to the market through a proprietary application interface.
Traders can manage risk through fast trade canceling via two tools:
- Pre-Trade Risk Controls (PTRC)
- Drop Copy API
SGX offers different types of memberships for both securities and derivatives traders.
|Trading Member||Market participants who choose to offer specialist equities execution-only services can become a Trading Member. |
Trading Membership requirements:
Remote Trading Member requirements:
|Clearing Member||Clearing Members have clearing rights. Their role is to act as a third party clearer for Trading Members and themselves (if they have trading rights). |
Clearing Member requirements:
|Trading and Clearing Member||Clearing and Trading members must meet the following requirements: |
|Trading Member||A Trading Member can hold customer accounts and monies and has to clear its trades through a Clearing Member. Trading Members can be located offshore. |
Trading Membership requirements:
Remote Trading Member requirements:
|Clearing Member||Clearing Member requirements: |
|Trading Member (Proprietary)||A Trading Member (Proprietary) trades solely for its own account and or for the proprietary account(s) of its related/associated corporations. |
Trading Member (Proprietary) can be based offshore, and there are no licensing or base capital requirements for Trading Member (Proprietary).
Trading Member (Proprietary) has to appoint a Clearing Member to clear its trades.
Traders can consult the membership section of the SGX website for more details and application forms.
SGX Fees and Charges
Securities traders at SGX pay the following transaction fees excluding structured warrants:
|Trading Fee||0.0075% of traded value|
|Clearing Fee||0.0325% of traded value|
|Goods and Services Tax||Prevailing GST rate|
Trading fees for structured warrants are 0.001% of traded value, while clearing fees for those products are 0.004% of traded value.
Fees for derivatives vary by contract type. Traders should consult the clearing schedule on the SGX website for more details.
The CDP requires collateral from participants to protect against the possibility of a Clearing Member defaulting on an obligation.
The amount of collateral required depends on several factors.
CDP uses two cut-off times to determine margin for client portfolios. It then calculates Maintenance Margin (MM) and Variation Margins (VM) for each portfolio.
Factors including market volatility and traded value of the portfolio can impact margin.
Maintenance margin: After posting initial margin, a market participant is required to keep up maintenance margin, which is the amount of equity required to retain an open position.
Maintenance margin covers potential risk to a confidence interval of at least 99%.
Variation margin: This is the payment of additional funds that may be deemed necessary when the account balance falls below the maintenance margin or initial margin requirement.
Traders should consult the CDP Clearing Rule Practice Note 6A.5.2 Calculation of Amount of Clearing Member Required Margins for further details.
Market Data Available From SGX
SGX provides a variety of market data and newsfeed options for its customers:
|Securities Market Direct Feed||Real-time price information directly from securities trading engine.||Information vendors, Institutions, Trading firms, ISVs.|
|Derivatives Market Direct Feed||Real-time price information on all SGX futures and options contracts direct from the trading engine.||Information vendors, Institutions, Trading firms, ISVs.|
|Post-Trade Data Feed||Service for viewing and managing trade orders independent of main trade access.||Clearing Members, Back Office.|
|SGX News||Real-time corporate statements and action announcements.||Information vendors, Institutions, Trading firms, ISVs.|
|Historical and Reference Data||Daily, weekly, monthly and yearly historical data including:||Researchers, Academics, Fund Managers, Consultants |
Traders should consult the SGX market data section of the website for policies and fees regarding data usage.
Where Can I Trade Commodities?
Start your research with reviews of these regulated brokers available in .
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. <b>Between 53.00%-89.00% of retail investor accounts lose money when trading CFDs.</b> You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Below we answer some common questions about Linear Regression Line indicators.
What is the history of the Singapore Exchange?
The holding company that operates SGX was formed on December 1, 1999, and it acquired the assets of three predecessor exchanges:
- Stock Exchange of Singapore (SES)
- Singapore International Monetary Exchange (Simex)
- Securities Clearing and Computer Services Pte Ltd (SCCS)
Each of these exchanges received shares in the new entity known as Singapore Exchange Limited.
On November 23, 2000, SGX listed its shares for trading on its own exchange. SGX became the second exchange in Asia Pacific to have its shares listed via a public offering and private placement.
|Investment||Bombay Stock Exchange||2007||SGX acquires a 5% stake.|
|Opening||Beijing office||2008||Expansion into China.|
|Joint Venture||Nomura’s Chi-X||2009||This partnership, which received approval from the Monetary Authority of Singapore (MAS) in 2010, created a dark pool trading platform.|
|Opening||London Office||2010||Decision to open office is part of a $250 million investment in Reach, a new faster trading platform based on Nasdaq OMX technology.|
|Partnership||NASDAQ OMX||2011||Partners collaborate on a suite of tools to support companies listed in Asia.|
|New Initiative||Dual currency trading||2012||SGX provides for trading of stocks, bonds and other investments in both Singapore and US dollars.|
|Acquisition||Energy Market Company||2014||SGX acquired the remaining 51% of Energy Market Company (EMC). It acquired a 49% stake in 2012. EMC operates Singapore’s wholesale electricity market.|
|Acquisition||The Baltic Exchange||2016||The Baltic Exchange is the world’s only independent source of maritime market information for the trading and settlement of physical and derivative shipping contracts.|
Who Are the Singapore Exchange executives?
SGX is organized into 10 divisions, including the office of the President, which report to the CEO. Four additional divisions report to the President. SGX has a management team and board of directors with decades of both industry and financial markets experience.
|Kwa Chong Seng||Chairman|
|Loh Boon Chye||Chief Executive Officer|
|Ng Yao Loong||Chief Financial Officer|
|Agnes Ko||Chief Risk Officer|
|Lee Beng Hong||Senior Managing Director, Head of Fixed Income, Currencies and Commodities|
|Michael Syn||Senior Managing Director, Head of Equities|
|Tinku Gupta||Senior Managing Director, Chief Technology Officer|
|Tan Boon Gin||Chief Executive Officer, Singapore Exchange Regulation|
Does the Singapore Exchange have vendor partners?
SGX works with many outside vendors that supplement the trading and clearing experience.
|Broadridge Financial Solutions||www.broadridge.com/|
|Fidessa Group PLC||www.fidessa.com|
|Itiviti Group AB||www.itiviti.com|
|Sharp Point Limited||www.sharppoint.com.hk|
|Stellar Trading Systems||www.stellartradingsystems.com|
|Trading Technologies International||www.tradingtechnologies.com|
What educational materials does SGX offer?
SGX operates SGX Academy, which provides investor education and training to traders of all skill levels.
Traders can search this section of the site by course level, date, prices, and course category. Categories include in-person seminars and courses held in Singapore, E-training, and live events held with SGX partners.
Topics cover every aspect of trading and investing. E-courses offered through SGX Academy include the following:
- Business and Market Cycles
- What Moves the Market?
- Economic Indicators
- Diversifying Your Portfolio
- The Math Behind Trading
- How to Place Orders
- Reading Annual Reports
- Benefits of Exchange Traded Funds
- Financial Ratio Shortcuts
SGX / CBOE Partnership
SGX has a partnership with the Chicago Board of Options Exchange (CBOE), which is one of the leading options exchanges in the world, to offer options education e-courses. These courses are designed for all skill levels of trading and allow students to learn at their own pace. Traders can consult the CBOE Options Institute at SGX for more details.
SGX periodically holds live webinars for its trading community. Webinar speakers are experts in their fields and offer structured lessons on topics of interest to market participants. Traders can get more information at the SGX Academy website.
- Learn more about trading rubber and coffee and which broker’s offer access to these markets.
- Learn more about the world’s largest commodity exchanges including Euronext, the European Energy Exchange (EEX), the Zhengzhou Commodity Exchange (ZCE), the Deutsche Borse Group, the Multi (CMX) of India, and the Brasil Bolsa Balcão.
- If you’d like a primer on how to trade commodities in general, please see our introduction to commodity trading.
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