Singapore Exchange aims for faster trade settlement next year

SINGAPORE — Singapore Exchange Ltd plans to speed up clearing and settlement of securities to reduce systemic risks and bring the island nation's market in line with global standards.

The exchange wants to shorten the settlement cycle to two days from three, introduce simultaneous settlement of securities and cash, and ensure payments of Singapore dollar transactions will be carried through MAS Electronic Payment System instead of commercial banks, it said on Wednesday.

The moves, which were presented in a consultation paper, will bring SGX in line with exchanges in Hong Kong, the US, Europe and Australia, which operate on a two-day settlement cycle. Indonesia and Thailand are contemplating similar moves.

SGX is planning to introduce the changes in the second half of next year, after originally proposing the same switch in 2014 with an intention to start in 2016. Nico Torchetti, head of market services, said it took longer than expected to shift members from the exchange-operated client accounting system to their own back office platforms. BLOOMBERG