Singapore Exchange Limited (SGX Group) is a

Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...

-based exchange conglomerate, operating equity,

fixed income Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year and repay the pr ...

currency A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a ''system of money'' in common use within a specific envi ...

and

commodity In economics, a commodity is an economic goods, good, usually a resource, that specifically has full or substantial fungibility: that is, the Market (economics), market treats instances of the good as equivalent or nearly so with no regard to w ...

markets. It provides a range of listing, trading, clearing, settlement, depository and data services. SGX Group is also a member of the

World Federation of Exchanges The World Federation of Exchanges (WFE), formerly the ''Federation Internationale des Bourses de Valeurs'' (FIBV), or International Federation of Stock Exchanges, is the trade association of publicly regulated stock, futures, and options exchan ...

and the Asian and Oceanian Stock Exchanges Federation. It is

ASEAN The Association of Southeast Asian Nations, commonly abbreviated as ASEAN, is a regional grouping of 10 states in Southeast Asia "that aims to promote economic and security cooperation among its ten members." Together, its member states r ...

's second largest market capitalization after

Indonesia Stock Exchange Indonesia Stock Exchange (IDX) ( (BEI)) is a stock exchange based in Jakarta, Indonesia. It was previously known as the Jakarta Stock Exchange (JSX) before its name changed in 2007 after merging with the Surabaya Stock Exchange (SSX). In rece ...

at as of September 2023. Singapore’s stock exchange hits 20-year low in listed companies.

History

SGX was formed on 1 December 1999 as a holding company. The share capital of some former exchange companies, namely

Stock Exchange of Singapore The Stock Exchange of Singapore (SES) was a stock exchange company in Singapore. It was formed in 1973, when the termination of currency interchangeability between Malaysia and Singapore, caused the Stock Exchange of Malaysia and Singapore (SEMS) ...

(SES),

Singapore International Monetary Exchange Singapore Exchange Limited (SGX Group) is a Singapore-based exchange conglomerate, operating Equity (finance), equity, fixed income, currency and commodity markets. It provides a range of listing, trading, clearing, settlement, depository and ...

(SIMEX) that was founded in 1984 and Securities Clearing and Computer Services Pte Ltd (SCCS) were cancelled and new shares issued in these companies were fully paid up by SGX. In this way, all assets previously owned by these three companies were transferred to SGX. The shareholders previously holding shares in SES, SIMEX and SCCS received newly issued SGX shares. On 23 November 2000, SGX became the third exchange in Asia-Pacific to be listed via a public offer and a private placement after Australian Securities Exchange; which listed in 1998 and Hong Kong Stock Exchange earlier in 2000. Listed on its own bourse, the SGX stock is a component of benchmark indices such as the

MSCI MSCI Inc. (formerly Morgan Stanley Capital International) is an American finance company headquartered in New York City. MSCI is a global provider of equity, fixed income, real estate indices, multi-asset portfolio analysis tools, ESG and ...

Singapore Free Index and the Straits Times Index. In May 2006, SGX launched Asia's first over-the-counter (OTC) clearing platform named SGX AsiaClear for a suite of OTC derivative products to reduce counter-party risks and increase liquidity. It introduced OTC trade registration and clearing for a wide range of forward freight agreements (FFA), and oil swaps. Shortly thereafter, it launched the world's first clearing and settlement of iron ore swaps and has since become the world's largest clearer of iron swaps. On 25 September 2006, the Joint Asian Derivatives Exchange (JADE), a joint venture between SGX and

Chicago Board of Trade The Chicago Board of Trade (CBOT), is an American futures exchange, futures and options exchange that was founded in 1848. On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form CME Group. CBOT and three other excha ...

(CBOT) became operational. However, this joint venture was cancelled in November 2007, with CME Groups selling of its 50% stake in the joint venture to SGX. The contracts previously traded on JADE were transferred to SGX's QUEST trading platform. In March 2007, SGX bought a 5% stake in

Bombay Stock Exchange BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange based in Mumbai. It is the 6th largest stock exchange in the world by total market capitalization, exceeding $5 trillion in May 2024. Established with t ...

for 42.7 million dollars. On 15 June 2007, Tokyo Stock Exchange, Inc. announced that it had acquired a 4.99% stake in SGX. Since then the value of the shares has declined and the Tokyo Stock Exchange, Inc. has made a decision to sell the shares it holds in SGX to its parent company, the Tokyo Stock Exchange Group, Inc. On 31 January 2008, SGX acquired a 20% stake in Philippine Dealing System Holdings Corp, which has become an associated company of SGX. On 18 April 2008, SGX opened a representative office in

Beijing Beijing, Chinese postal romanization, previously romanized as Peking, is the capital city of China. With more than 22 million residents, it is the world's List of national capitals by population, most populous national capital city as well as ...

. At the beginning of 2008, SGX reached an agreement to buy at least 95% of Singapore Commodity Exchange. On 30 June 2008, SGX completed the acquisition of Singapore Commodity Exchange Ltd (SICOM), which now is a 100% subsidiary. In August 2009, SGX formed a joint venture with

Chi-X Global BATS Chi-X Europe is a London-based, order-driven pan-European equity exchange that has been a subsidiary of BATS Global Markets since 2011. It is a low latency, low cost alternative to exchange traded equities and exchange-traded funds (ETFs ...

, called Chi-East. At the beginning of October 2010, this joint venture received approval from the

Monetary Authority of Singapore The Monetary Authority of Singapore or (MAS), is the central bank and financial regulatory authority of Singapore. It administers the various statutes pertaining to money, banking, insurance, securities and the financial sector in general, as ...

to operate a

dark pool In finance, a dark pool (also black pool) is a private forum ( alternative trading system or ATS) for trading securities, derivatives, and other financial instruments. On 8 June 2010, SGX announced it has opened an office in London. This is part of SGXs move to invest S$250 million into its Reach initiative. By implementing this initiative, SGX plans to create the world's fastest trading engine and a data centre as well as further connecting trading communities in the world to Singapore. The new trading platform, SGX Reach, will be delivered to SGX by

NASDAQ OMX Nasdaq Nordic is the common name for the subsidiaries of Nasdaq, Inc. that provide financial services and operate marketplaces for securities in the Nordic and Baltic regions of Europe. Historically, the operations were known by the company ...

Voltaire François-Marie Arouet (; 21 November 169430 May 1778), known by his ''Pen name, nom de plume'' Voltaire (, ; ), was a French Age of Enlightenment, Enlightenment writer, philosopher (''philosophe''), satirist, and historian. Famous for his wit ...

and HP. This platform is based on GENIUM, a trading platform developed by NASDAQ OMX. In November 2016 the Singapore Exchange (SGX) acquired the

Baltic Exchange The Baltic Exchange (incorporated as The Baltic Exchange Limited) is a Trade association, membership organisation for the Maritime transport, maritime industry, and Shipping markets, freight market information provider for the trading and settl ...

, headquartered in London. In February 2011, SGX has entered a partnership with NASDAQ OMX to provide a suite of tools and solutions for companies, which is designed to support listed companies in Asia. SGX plans to introduce dual currency trading of securities, which includes stocks, bonds and other listed investments in two different denominations, the Singapore and US dollar on 2 April 2012. In October 2013, excessive speculation led to the sharp price fall of three mainboard stocks, Blumont Group Ltd, Asiasons Capital Ltd. and LionGold Corp. SGX and the Monetary Authority of Singapore (MAS) launched a review of activities around the three stocks, and in February 2014 jointly issued a consultation paper setting out a number of enhancements to strengthen the securities market and protect investors from speculative and market manipulative behaviour. Enhancements included implementing a minimum trading price for mainboard listed issuers, requiring reporting of short positions and the creation of three independent regulatory bodies. On 6 February 2018, the Singapore Exchange (SGX) and

Bursa Malaysia Bursa Malaysia (English: Malaysian Bourses or Malaysia Exchange) is the stock exchange in Malaysia. It is one of the largest bourses in ASEAN. It is based in Kuala Lumpur and was previously known as the Kuala Lumpur Stock Exchange (KLSE). It p ...

announced a proposed stock market trading link which will be operational by end-2018. The new link will allow investors to conduct trading of shares in an efficient manner. In addition to trading, the link will cover the clearing and settlement of traded stocks, procedures required for post-trading arrangements. Before the launch of the link, cross-border supervisory and enforcement arrangements will be worked upon by the

and Securities Commission Malaysia. After the results of the

2018 Malaysian general election General elections were held in Malaysia on Wednesday, 9 May 2018. At stake were all 222 seats in the Dewan Rakyat, the lower house of parliament. The 13th Parliament was dissolved by Prime Minister Najib Razak on 7 April 2018. It would have be ...

, plans for the stock market link were put on hold. On 21 January 2020, Singapore Exchange (SGX) was listed in the Bloomberg Gender-Equality Index (GEI) for the first time in recognition of

gender equality Gender equality, also known as sexual equality, gender egalitarianism, or equality of the sexes, is the state of equal ease of access to resources and opportunities regardless of gender, including economic participation and decision-making, an ...

, as well as its commitment to diversity and board representation.

Merger talks

SGX was in merger talks with

Australian Securities Exchange Australian Securities Exchange Ltd (ASX) is an Australian public company that operates Australia's primary Exchange (organized market), securities exchange, the Australian Securities Exchange (sometimes referred to outside of Australia as, or c ...

(ASX), which would have created a bourse with a market value of US$14 billion had the deal been successful. The

Australian Competition & Consumer Commission The Australian Competition and Consumer Commission (ACCC) is the chief competition regulator of the Government of Australia, located within the Department of the Treasury. It was established in 1995 with the amalgamation of the Australian Tra ...

said on 15 December 2010 that it would not oppose SGXs takeover of ASX. SGX's plans to buy ASX have drawn criticism from the

Tokyo Stock Exchange The , abbreviated as Tosho () or TSE/TYO, is a stock exchange located in Tokyo, Japan. The exchange is owned by Japan Exchange Group (JPX), a holding company that it also lists (), and operated by Tokyo Stock Exchange, Inc., a wholly owned sub ...

, which is the second largest shareholder in SGX. A representative of the TSE said SGX's bid for ASX "would flag off a race to consolidate". TSE chief Atsushi Saito fears isolation of the Tokyo Stock Exchange as a result of the takeover. SGX revised its initial takeover proposal in an attempt to overcome some of the opposition to the plans. This would have decreased the number of Singaporean citizens on the board of the combined company and would have given addition seats to Australians. However, on 8 April 2011, the

Treasurer of Australia The Treasurer of Australia, also known as the Federal Treasurer or more simply the Treasurer, is the Federal Executive Council (Australia), minister of state of the Australia, Commonwealth of Australia charged with overseeing government revenu ...

Wayne Swan Wayne Maxwell Swan (born 30 June 1954) is an Australian politician serving as the 25th and current Australian Labor Party National Executive#National Presidents, National President of the Labor Party since 2018, previously serving as the 14th de ...

, made the decision to block the merger between the two exchanges. Upon the announcement that the federal government would block the merger, SGX retracted its bid for ASX shares and decided to seek growth opportunities elsewhere. As of July 2012, SGX was in merger talks with the

London Stock Exchange The London Stock Exchange (LSE) is a stock exchange based in London, England. the total market value of all companies trading on the LSE stood at US$3.42 trillion. Its current premises are situated in Paternoster Square close to St Paul's Cath ...

(LSE) and the two exchanges already signed a cross trading agreement. However, on 20 July, SGX said there are no plans for a takeover of or merger with LSE.

Structure

SGX operates several different divisions, each responsible for handling specific businesses. * SGX ETS (Electronic Trading System): provides global trading access to SGX markets where 80 per cent of the customers are from outside Singapore. * SGX DT (Derivatives Trading): provides derivatives trading. * SGX ST (Securities Trading): provides securities trading. * SGX DC (Derivatives Clearing): subsidiary for clearing and settlement operations. * SGX AsiaClear: offers clearing services for over-the-counter (OTC) oil swaps and forward freight agreements. * SGX Reach: an electronic trading platform. * Central Depository Pte Ltd: subsidiary responsible for securities clearing, settlement and depository services. * Asian Gateway Investments Pte Ltd: wholly owned subsidiary * Singapore Exchange IT Solutions Pte Ltd: provides computer services and maintenance as well as software maintenance

Listing

The companies listed on SGX belong to one of two groups: the companies listed on the SGX Mainboard and the companies listed on SGX

NASDAQ The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...

. In order to be listed on the mainboard, a company has to fulfill some requirements set forth by SGX, while a listing on NASDAQ is not tied to the fulfilment of any additional conditions. SESDAQ was replaced on 26 November 2007 by the SGX Catalist after an extensive study of other market models and a public consultation in May 2007. The word "Catalist" is an amalgamation of the words "Catalyst" and "List", to reflect the idea that the Catalist board could be used as a catalyst to propel growth upon listing. Catalist differs from SESDAQ primarily in its use of a sponsor system to determine a prospective company's suitability to list and as a corporate advisor to advise on listing and corporate governance issues.

Trading system

The exchange launched SGX QUEST (SGX Quotation and Execution System) in August 2004. The system is used by the exchange for derivatives and securities trading.

Financial performance

As of 31 January 2010, SGX had 774 listed companies with a combined market capitalisation of S$650 billion. The revenues of SGX are mainly from the

securities market Security market is a component of the wider financial market where securities can be bought and sold between subjects of the economy, on the basis of demand and supply. Security markets encompasses stock markets, bond markets and derivatives ma ...

(75%) and

derivatives market The derivatives market is the financial market for derivatives - financial instruments like futures contracts or options - which are derived from other forms of assets. The market can be divided into two, that for exchange-traded derivatives a ...

(25%). SGX reported a net profit of $165.8 million for the first half of its financial year 2010. Excluding non-recurring items, net profit was 7% higher compared to 1H FY2009 ($159.2 million). In the second quarter of the financial year 2010, excluding the non-recurring items, net profit of $77.0 million was 3% higher than a year ago. Operating revenue increased 6% to $324.0 million (1H FY2009: $304.9 million).

Corporate governance code

Numerous guidelines are set to be shifted to SGX Listing Rules. At least one-third of the board members are to be independent directors. The shareholding threshold for assessing director independence has been lowered to 5% from 10%. A director will no longer be independent if he or any immediate family member is a substantial shareholder with a 5% stake or more. Relationships between chairman and CEO must be disclosed if they are immediate family members. There will be a proposed 9 year limit on independent directors as a hard limit, or the appointment of independent directors who have served more than nine years to be put to an annual vote requiring approval from majority of all shareholders and majority of non-controlling shareholders, with a transition period of three years to be provided regardless of the option adopted. Directors must be submitted for renomination and reappointment at least once every three years. If dividends are not paid, companies must state the reason.

Companies listed

As of February 2022, there were 672 listed companies (excluding GDRs, Hedge Funds and Debt Securities) on the Singapore Exchange with a market capitalisation of SGD 899,124 million (roughly US$657 billion).

Major shareholders

The following are top 10 largest shareholders of Singapore Exchange Ltd as of 30 June 2022: # SEL Holdings Pte Ltd – 23.41% # Citibank Nominees Singapore Pte Ltd – 16.09% # DBSN Services Pte Ltd – 10.88% # Raffles Nominees (Pte) Limited – 9.65% # HSBC (Singapore) Nominees Pte Ltd – 8.42% # DBS Nominees (Private) Limited – 5.42% # Phillip Securities Pte Ltd – 1.41% # BPSS Nominees Singapore (Pte) Ltd – 1.03% # United Overseas Bank Nominees (Private) Limited – 0.69% # CGS-CIMB Securities (Singapore) Pte Ltd – 0.38%

References

External links

*
Annual Report 2009 : Association of Dutch Businessmen
(This info should be incorporated into the article) {{authority control 1999 establishments in Singapore Financial services companies established in 1999 Economy of Singapore Stock exchanges in Singapore Companies listed on the Singapore Exchange Companies in the Straits Times Index Singaporean companies established in 1999 Stock exchanges in Southeast Asia Singaporean brands Financial regulatory authorities of Singapore