Stock exchanges in Indonesia, Singapore, Thailand, Philippines and Malaysia have signed a memorandum of understanding (MOU) to form an electronic trading link between them. The link is also open to other exchanges in the Association of Southeast Asian Nations (ASEAN) region, and is expected to go live next year.
The link will allow cross-border trading within the ASEAN region from a single point of access. The exchanges hope this will enhance the competitiveness of their countries’ capital markets and attract more international funds to the ASEAN region.
“This project will strengthen our regional financial stability by deepening regional capital markets and facilitating progressive liberalisation of our financial sector,” said Korn Chatikavanji, finance minister, Thailand, in a statement. “A stronger, integrated and more competitive ASEAN is necessary to respond to the changing global landscape.”
The exchanges will work towards establishing their clearing houses as central counterparties to facilitate clearing and settlement of cross-border trades. “Brokers will benefit from building on their relationships with their home clearing houses and need not take on foreign counterparty risks,” explained Hseih Fu Hua, CEO, Singapore Exchange.
Separately, The Singapore Exchange and the Stock Exchange of Thailand have renewed the MOU they signed back in August 2003 aimed at fostering closer cooperation. The MOU will now last until 2013.
Under the MOU, the exchanges aim to collaborate more closely in areas such as securities trading, promotional activities, and information sharing regarding the operations and regulatory framework of their respective securities and derivatives markets. They will also seek possible cooperation on cross-trading of securities.