Malaysia and Singapore to set up stock market trading link by year’s end

Tan Sri Dato’ Seri Ranjit Ajit Singh, SC Malaysia chairman (left) and Ravi Menon, managing director of the MAS. Both authorities will work together to launch a new stock market trading link by the end of 2018.
Reuters, The Business Times

The Monetary Authority of Singapore (MAS) and the Securities Commission Malaysia (SC) are planning to launch a new stock market trading link by the end of 2018.

This link will allow investors, especially retail investors, to trade and settle shares listed on each other’s stock market in a more convenient and cost efficient manner, the authorities said on Tuesday (Feb 6).

The link between Singapore Exchange (SGX) and Bursa Malaysia (BM) will also extend beyond trading to cover post-trade arrangements such as the clearing and settlement of the stocks traded.

Cross-border supervisory and enforcement arrangements will also be made to oversee and govern operations.

MAS assistant managing director of capital markets Mr Lee Boon Ngiap said the trading link will help lower trading costs for investors, which could in turn encourage greater cross-border investments in stocks listed on each other’s exchanges.

“This will improve the liquidity of both our stock markets. I hope this initiative will in time expand to include the rest of the stock exchanges in ASEAN,” Mr Lee said.

In a statement, SC said that the initiative is part of ongoing efforts implemented at the ASEAN Capital Markets Forum (ACMF) to deepen financial connectivity across the region’s capital markets.

“The establishment of this trading link is an important step towards encouraging ASEAN investors to invest in ASEAN,” Tan Sri Dato’ Seri Ranjit Ajit Singh, SC Malaysia chairman and ACMF chairman said.

He added: “The ease of accessibility for investors will contribute towards greater vibrancy in our markets. Once operationalised, this pilot initiative can form the basis for future connectivity among ASEAN markets.”