Following the resolution of regulatory delays, the ASEAN Trading Link between Bursa Malaysia and Singapore Exchange (SGX) will finally go live on 18 September.
The link was originally scheduled to open in June, with The Stock Exchange of Thailand (SET) scheduled to join in August 2012. Other ASEAN stock markets – the Indonesia Stock Exchange, the Philippine Stock Exchange and Vietnam’s Ho Chi Minh and Hanoi exchanges – are involved in discussions to join the network, but their participation is not confirmed. SET has now confirmed its readiness to join the ASEAN link following the successful implementation of a new trading platform earlier this week and will join the project from next month.
"Joining the ASEAN Trading Link in October is a great opportunity for SET to attract investors in ASEAN to tap the opportunities and potential of the Thai stock market," said Veerathai Santiprabhob, chief strategy officer, SET.
It remains to be seen whether or not the new trading link between Bursa Malaysia and SGX will provide any benefits to investors compared with existing arrangements.
“We think that the ASEAN trading link near term will not have much of an impact on either trading volumes or cross border interaction,” said Keith Ducker, CIO of TORA, an agency broker strong in southeast Asia. “That said, the concept is a step in the right direction in an effort to reduce the costs and difficulty of ASEAN trading.
Further, Ducker said US and European investors welcome any actions which make Asia trading less onerous.
“Although a pan-Asia trading facility may be difficult to emerge, the common geography and relative size of the ASEAN markets make it the most likely to succeed with cross exchange tie-ups,” said Ducker.
SGX rule changes for ASEAN integration
With the launch date now set for later this month, SGX has also revealed rule changes to allow market participants to access its main trading platform – SGX-ST – directly, using systems of their own or of SGX members. The new rules take effect on 18 September 2012 and facilitate the introduction of the ASEAN Trading Link.
SGX said with direct market access, market participants can transmit orders to SGX-ST’s trading engine in real time. SGX-ST members will need to establish measures to safeguard against potential system malfunction and excessive customer trades by volume or value.
The main rule amendments are introducing member requirements for customers who use their own order management systems; requiring members to put in place minimum credit standards for customers with direct market access; and have comprehensive programmes for maintaining the integrity of their order management systems.