FTT SGX Trading Rules 2 — Questions and Answers
Question 1: What is the purpose of a trading halt on SGX?
- To temporarily suspend trading in a security to allow dissemination of material information or prevent disorderly trading (Correct answer)
- To permanently delist a company from SGX
- To prevent a company's share price from falling below a set level
- To allow SGX to audit a company's financials
Correct answer: To temporarily suspend trading in a security to allow dissemination of material information or prevent disorderly trading
A trading halt on SGX temporarily suspends trading in a security — typically at a company's request — to allow time for material information to be disseminated to the market before trading resumes.
Question 2: Under SGX rules, a listed company must make an immediate announcement of material information that:
- Would be likely to materially affect the price or value of its securities (Correct answer)
- Only when the information has been approved by the board
- After at least 24 hours of internal review
- Only when required by MAS
Correct answer: Would be likely to materially affect the price or value of its securities
SGX's continuous disclosure requirements mandate that listed companies must make an immediate announcement of any information that would or would likely have a material effect on the price or value of their securities, without delay.
Question 3: What type of order allows a trader to specify both a stop price and a limit price?
- Stop-limit order (Correct answer)
- Market order
- Good-till-cancelled order
- At-auction limit order
Correct answer: Stop-limit order
A stop-limit order combines features of a stop order and a limit order. When the stop price is triggered, the order becomes a limit order at the specified limit price, giving the trader control over the execution price while automating activation.
Question 4: What does 'odd lot' mean in SGX trading?
- A quantity of shares that is less than the standard board lot size of 100 shares (Correct answer)
- A very large block trade above S$1 million
- A trade executed outside normal trading hours
- A futures contract with a non-standard expiry date
Correct answer: A quantity of shares that is less than the standard board lot size of 100 shares
An odd lot refers to a quantity of shares that is less than SGX's standard board lot size (currently 100 shares for most securities). Odd lots may trade on the SGX Unit Share Market at different spreads from the main board.
Question 5: SGX's 'buying-in' procedure is initiated when:
- A seller fails to deliver securities on the settlement date (Correct answer)
- A buyer fails to pay for securities purchased
- A member's margin falls below the required level
- A company fails to pay dividends on time
Correct answer: A seller fails to deliver securities on the settlement date
The buying-in procedure on SGX is initiated on the settlement date (T+2) when a seller fails to deliver the securities sold. SGX or the clearing house will buy in the securities in the market and charge any additional costs to the defaulting seller.
Question 6: What does 'programme trading' mean in the context of SGX?
- The use of computer algorithms to automatically generate and submit multiple orders based on pre-set criteria (Correct answer)
- Manual execution of a large block trade over several days
- Trading conducted only during pre-market hours
- Buying a predetermined set of stocks in fixed proportions manually
Correct answer: The use of computer algorithms to automatically generate and submit multiple orders based on pre-set criteria
Programme trading involves the use of automated computer systems or algorithms to generate and submit large numbers of orders simultaneously based on pre-defined parameters, such as index rebalancing or arbitrage strategies. SGX has specific requirements for members engaging in programme trading.
FTT SGX Trading Rules 2
What is the purpose of a trading halt on SGX?