FTT SGX Trading Rules 1 — Questions and Answers
Question 1: What is the standard settlement cycle for securities traded on SGX?
- T+2 (trade date plus 2 business days) (Correct answer)
- T+1 (trade date plus 1 business day)
- T+3 (trade date plus 3 business days)
- T+0 (same day settlement)
Correct answer: T+2 (trade date plus 2 business days)
SGX operates on a T+2 settlement cycle, meaning that securities transactions must be settled two business days after the trade date. This is when payment and delivery of securities are exchanged.
Question 2: Which entity acts as the central counterparty for securities cleared on SGX?
- The Central Depository (CDP) (Correct answer)
- The Singapore Exchange itself
- The Monetary Authority of Singapore
- Member brokerages
Correct answer: The Central Depository (CDP)
The Central Depository (CDP), a wholly owned subsidiary of SGX, acts as the central counterparty and clearing entity for securities transactions, guaranteeing settlement and holding securities in book-entry form.
Question 3: What is the 'pre-open routine' on SGX?
- A period before the market opens where orders are collected and a theoretical opening price is calculated (Correct answer)
- The period when brokers review client accounts
- A time when only institutional investors can place orders
- A system maintenance window before trading begins
Correct answer: A period before the market opens where orders are collected and a theoretical opening price is calculated
The pre-open routine on SGX is the period before market opening where orders are collected and the exchange calculates a theoretical opening price (TOP) and theoretical opening volume (TOV) based on the order book, before an opening auction determines the actual opening price.
Question 4: On SGX, the minimum tick size for securities priced between S$1.00 and S$9.99 is:
- S$0.005 (half a cent) (Correct answer)
- S$0.01 (one cent)
- S$0.001 (one tenth of a cent)
- S$0.50 (fifty cents)
Correct answer: S$0.005 (half a cent)
For SGX-listed securities priced between S$1.00 and S$9.99, the minimum tick size is S$0.005 (half a Singapore cent), allowing for finer price increments in this price range.
Question 5: SGX's circuit breaker mechanism is triggered when:
- A security's price moves beyond a specified collar threshold from a reference price within a set period (Correct answer)
- Trading volume exceeds the daily average by 10 times
- A single order exceeds S$10 million in value
- More than 100 orders are placed in under one minute
Correct answer: A security's price moves beyond a specified collar threshold from a reference price within a set period
SGX's circuit breaker (trading halt) is triggered when the price of a security moves beyond a specified collar threshold from the reference price within a set time period, temporarily halting trading to prevent extreme volatility.
Question 6: What does 'direct business' mean on SGX?
- A trade negotiated between two parties off the exchange order book but reported to SGX (Correct answer)
- A transaction conducted entirely within SGX's central electronic order book
- A trade between two subsidiaries of the same company
- A trade executed by SGX on behalf of a member
Correct answer: A trade negotiated between two parties off the exchange order book but reported to SGX
A direct business (off-market trade) is a transaction negotiated between two parties outside of SGX's central order book but reported and registered through SGX, subject to specific rules on pricing and reporting timeframes.
FTT SGX Trading Rules 1
What is the standard settlement cycle for securities traded on SGX?