Singapore’s Commodity Exchange: Read This Before Trading At The SGX


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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. We provide a list of brokers that give access to trading on the B3.

Jump to the list of SGX brokers in .

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.

SGX Homepage

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:

  1. 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.
  2. 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.
  3. 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:

TrustPassionService
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:

Regulatory FunctionDescription
IPO Admissions
  • Reviewing applications for listings
  • Accrediting and authorizing issue managers, full sponsors and registered professionals who introduce issuers
  • Listing ComplianceEnsuring that listed companies comply with exchange rules
    Surveillance
  • Monitoring price movements and trading for unusual activity
  • Disciplining members, trading representatives or registered representatives when necessary for rules violations
  • Member SupervisionAdmitting and monitoring members to ensure compliance with SGX rules.
    Regulatory Development and PolicyProviding input for SGX initiatives and helping craft new solutions and policies.
    Listing Policy and Product AdmissionDeveloping the listing policy of SGX and managing the SGX listing manual.
    EnforcementInvestigating suspected serious infractions of the SGX Rules as well as enforcing the SGX Rules by taking appropriate disciplinary actions for violations.
    Whistleblowing OfficeReceipt, assessment and management of whistleblowing allegations and handles all external communications with the whistleblowers.
    Strategic Planning OfficeIdentifies 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:

    Service CategoriesProducts
    SecuritiesStocks, 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 IncomeRetail and Wholesale Fixed Income Securities, OTC Trading
    DerivativesCommodities, Equities, FX & Interest Rates
    IndicesEquity, 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 ServicesResearch, 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:

    REACH

    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:

    1. SGXAccess Fix is designed to allow traders to connect to SGX with minimal reconfiguration or redevelopment of their trading systems.
    2. SGXAccess API offers faster trading speeds and lower latency. This connection gives traders access to the market through a proprietary application interface.

    Titan

    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:

    1. 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).
    2. Titan DT OUCH/ITCH offers faster trading speeds and lower latency. This connection gives traders access to the market through a proprietary application interface.

    Risk Management

    Traders can manage risk through fast trade canceling via two tools:

    1. Pre-Trade Risk Controls (PTRC)
    2. Drop Copy API

    SGX Memberships

    SGX offers different types of memberships for both securities and derivatives traders.

    Securities Memberships

    Membership CategoryDescription
    Trading MemberMarket participants who choose to offer specialist equities execution-only services can become a Trading Member.

    Trading Membership requirements:
  • Qualified by a member of the Central Depository (“CDP”) at all times
  • Maintain a minimum base capital of S$1million
  • Hold a Capital Markets Services License (if operating within Singapore)

  • Remote Trading Member requirements:
  • Comply with SGX capital and financial requirements
  • Be appropriately licensed in home jurisdiction
  • Clearing MemberClearing 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:
  • Maintain a minimum base capital of S$5 million
  • Hold a Capital Markets Service License
  • Trading and Clearing MemberClearing and Trading members must meet the following requirements:
  • Maintain a minimum base capital of S$5 million
  • Hold a Capital Markets Service License
  • Derivatives Memberships

    Membership CategoryDescription
    Trading MemberA 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:
  • Maintain a minimum base capital of S$1million
  • Hold a Capital Markets Services License (if operating within Singapore)

  • Remote Trading Member requirements:
  • Comply with SGX capital and financial requirements
  • Be appropriately licensed in home jurisdiction
  • Clearing MemberClearing Member requirements:
  • Maintain a minimum base capital of S$5 million
  • Hold a Capital Markets Service License
  • Remote applicants can apply to clear AsiaClear products
  • 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:

    Membership CategoryDescription
    Trading Fee0.0075% of traded value
    Clearing Fee0.0325% of traded value
    Goods and Services TaxPrevailing 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.

    Margin Rates

    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.

    Snapshots are taken at 11:30 am and market close. Margin calls will be issued by 2:30pm and 6:00am the following day.

    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:

    ServiceDescriptionTarget Audience
    Securities Market Direct FeedReal-time price information directly from securities trading engine.Information vendors, Institutions, Trading firms, ISVs.
    Derivatives Market Direct FeedReal-time price information on all SGX futures and options contracts direct from the trading engine. Information vendors, Institutions, Trading firms, ISVs.
    Post-Trade Data FeedService for viewing and managing trade orders independent of main trade access.Clearing Members, Back Office.
    SGX NewsReal-time corporate statements and action announcements.Information vendors, Institutions, Trading firms, ISVs.
    Historical and Reference DataDaily, weekly, monthly and yearly historical data including:
  • Prices
  • Turnover
  • Market capitalization
  • Trade execution
  • Researchers, Academics, Fund Managers, Consultants

    Traders should consult the SGX market data section of the website for policies and fees regarding data usage.

    Regulated Brokers: Where Can I Trade Commodities?

    Start your research with reviews of these regulated brokers available in .

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    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 71.00%-89.00% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

    FAQ

    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:

    1. Stock Exchange of Singapore (SES)
    2. Singapore International Monetary Exchange (Simex)
    3. 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.

    Key Events

    EventSubjectYearCommentary
    Investment Bombay Stock Exchange2007SGX acquires a 5% stake.
    Opening Beijing office2008Expansion into China.
    Joint VentureNomura’s Chi-X2009This partnership, which received approval from the Monetary Authority of Singapore (MAS) in 2010, created a dark pool trading platform.
    Opening London Office2010Decision to open office is part of a $250 million investment in Reach, a new faster trading platform based on Nasdaq OMX technology.
    PartnershipNASDAQ OMX2011Partners collaborate on a suite of tools to support companies listed in Asia.
    New Initiative Dual currency trading2012SGX provides for trading of stocks, bonds and other investments in both Singapore and US dollars.
    AcquisitionEnergy Market Company2014SGX acquired the remaining 51% of Energy Market Company (EMC). It acquired a 49% stake in 2012. EMC operates Singapore’s wholesale electricity market.
    AcquisitionThe Baltic Exchange2016The 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.

    NamePosition
    Kwa Chong Seng Chairman
    Loh Boon Chye Chief Executive Officer
    Ng Yao LoongChief Financial Officer
    Agnes KoChief Risk Officer
    Lee Beng HongSenior Managing Director, Head of Fixed Income, Currencies and Commodities
    Michael SynSenior Managing Director, Head of Equities
    Tinku GuptaSenior Managing Director, Chief Technology Officer
    Tan Boon GinChief 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.

    See all the vendors that provide data for derivatives trading markets at SGX.

    Vendor Website
    ATPlatform www.atplatform.com.cn/
    BidFX www.bidfx.com/
    Broadridge Financial Solutions www.broadridge.com/
    CQG www.cqg.com
    DZH International www.dzhintl.com
    Esunny Information www.esunny.com.cn
    Fidessa Group PLC www.fidessa.com
    FIS Global www.fisglobal.com
    Flextrade Systems www.flextrade.com
    Horizon Software www.hsoftware.com
    Ion Trading www.iontrading.com
    Itiviti Group AB www.itiviti.com
    Multitrade Softech www.multitradesoftech.com
    Object Trading www.objecttrading.com
    Sharp Point Limited www.sharppoint.com.hk
    Snap Innovations www.snapinnovations.com
    Stellar Trading Systems www.stellartradingsystems.com
    Systex Corporation www.systex.com.tw
    Trading Technologies International www.tradingtechnologies.com
    Utrade Solutions www.utradesolutions.com
    Vela www.velatradingtech.com

    What educational materials does SGX offer?

    SGX operates SGX Academy, which provides investor education and training to traders of all skill levels.

    SGX Academy

    Programmes

    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:

    1. Business and Market Cycles
    2. What Moves the Market?
    3. Economic Indicators
    4. Diversifying Your Portfolio
    5. The Math Behind Trading
    6. How to Place Orders
    7. Reading Annual Reports
    8. Benefits of Exchange Traded Funds
    9. 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.

    Webinars

    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.

    Further Reading

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