Delays in the launch of the ASEAN exchange trade link between the Singapore Exchange (SGX) and Bursa Malaysia have been blamed on administrative and regulatory issues, according to top decision makers at the two exchanges.
“The infrastructure for the ASEAN exchange link has been tested and is ready to go but we are just awaiting the final sign-offs from service providers, regulators and brokers,” SGX president Muthukrishnan Ramaswami exclusively told theTRADEnews.com. “We want to ensure we have adequate fall-back procedures from the first day of operation.”
Ramaswami’s comments affirm similar remarks from Bursa Malaysia chief executive officer Tajuddin Atan at a press conference last week when he told press that the delays were due to “administrative regulatory issues that need to be addressed” and that he was “hopeful they can be resolved fast”.
A spokesperson for Bursa Malaysia confirmed the reason for the hold-up of the trading link but would not be drawn on clarifying exactly what the “administrative regulatory” issues were.
The trading link, which is being underpinned by technology from software vendor SunGard, is billed as eventually providing market participants from within and outside the region access ASEAN markets via a single connection.
The link between SGX and Bursa Malaysia was scheduled to open in June, with the Stock Exchange of Thailand (SET) to join in August 2012 after it had migrated to a new trading platform. It is not known how the current delay will affect SET’s plans to join.
The region’s other 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.
In particular, Indonesia is seen by some market commentators as at risk of pulling out of the initiative because of burgeoning domestic demand that may make joining the link unnecessary.
However, it is hoped that the link will help attract more trading between ASEAN members and increase international investment into the region as a whole. The project will yield the creation of the ASEAN Stars, an index of the region's top blue-chip stocks.
“We are not expecting the volume of trades to skyrocket in the region. We are more hopeful that the project will help to increase the visibility of ASEAN by creating an investable basket of the region’s securities and facilitate more intra-regional investments,” Ramaswami said of the trading link.