Annual Report 2001/2002

Liberalisation of Stockbroking Industry

Liberalisation of the stockbroking industry is now complete, coming a little over three years after the Stock Exchange of Singapore Review Committee report. The final restriction, in the form of minimum trading limits on new SGX-Securities Trading (SGX-ST) members, was removed in January 2002. Singapore’s securities market is now totally open to local and inter-national participation.

The greatest impact since the start of liberalisation in 1998 has been a tremendous gearing up and consolidation in the broking industry. The loss of entrenched franchises has not been without pain. In the longer term, the rationalisation will bring benefits to the market, investors and also brokerages that have re-organised themselves.

Meanwhile, services have improved with more intense competition; new and multiple products are now available on brokers’ internet platforms, even as balance sheets strengthen considerably with industry mergers and acquisitions.

Following the liberalisation, new participants in the form of large sophisticated brokerages have entered the market and become SGX-ST members. This has avoided a situation where trading in Singapore equities becomes overly concentrated with fewer intermediaries as a result of consolidation. The new entrants into the market will ensure a minimum level of choice for investors. While the merger of existing members has resulted in greater depth and enhanced ability to invest in technology, the new participants bring with them international experience and gives the market additional span in reaching out to foreign investors.

Moving forward, MAS will continue to benchmark Singapore’s securities market to global standards. It will look to the market to innovate and leverage on technology developments to enhance its offerings. One key area will be the implementation of a straight-through-processing environment with an infrastructure based on open architecture.

Meanwhile, when the SFA comes into effect in the third quarter of 2002, a single licensing and a risk-based capital framework will be implemented, which will better reflect the potential of dual membership in Singapore’s equity and derivatives markets. This process of regulatory renewal and fine-tuning will continue.

[Liberalisation] [Liberalisation of Stockbroking Industry] [Equity and Derivatives Markets] [Debt Market] [E-Financial Services and E-Commerce] [Recent Developments in Electronic Payments] [Financial Services Development Fund] [Enhancement of Exchange Infrastructure] [Dialogue Sessions with Industry] [Technology in Finance Dialogue Sessions]

[Regulatory Initiatives] [Developmental Initiatives] [Market Infrastructure]

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