Thursday, March 22, 2012

SGX introduces dual currency trading

SINGAPORE: Singapore Exchange (SGX) announced Thursday that listed companies will be able to trade in a second currency besides the Singapore dollar.

SGX said this will allow companies the choice to trade in any two different currency denominations.

An investor can now buy or sell a security in any currency, regardless of the currency in which it was first bought or sold. Securities eligible for the facility are known as "fungible" securities.

SGX says dual currency trading aims to deliver greater cost efficiency to investors, as they will be able to trade foreign-denominated securities in their local currency.

Magnus Bocker, CEO of SGX said: "Dual currency trading can also apply to other listed securities such as exchange traded funds.

"It will benefit investors who can now choose to trade in their preferred currencies while companies and issuers can enjoy the flexibility and potential added liquidity of having its securities trading in two currencies."

Mr Bocker added that SGX will continue to find new ways to assist issuers in fund raising and investors in trading and risk management.

Dual-currency listed shares will be consolidated in investors' Central Depository (CDP) accounts so that the total number of shares can be viewed at a glance. For example, 1,000 US dollar-denominated shares and 2,000 Singapore dollar-denominated shares will be reflected as 3,000 shares in the CDP account.

SGX said Hutchison Port Holdings Trust is the first listed security to launch dual currency units, in US dollars and Singapore dollars. It will start trading on April 2, 2012.

- CNA/wm

View the original article here

Source From Channel News Asia

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