Money Market: T+1 or negotiable
CLOB International was set up on January 2, 1990. It is an over-the-counter market that allows investors to trade in a number of international securities listed on foreign exchanges. Shares “quoted” on CLOB international therefore do not have to adhere to the corporate disclosure policy that applies to companies listed on the SGX Mainboard or SESDAQ.
Brokers enter orders on the SGX system and trades are matched and executed automatically. The trade is then captured and affirmed in the CDP system. Trades between brokers are netted and settled on T+3. Under CDP’s enhanced delivery-versus-payment system, cash positions for institutional trades are settled on a net basis during the afternoon, while securities are settled on a gross basis overnight. Securities accounts are credited/debited on SD during CDP’s batch run after the system is shut down at 17:30 local time.
Simplified diagram of a trade life cycle:
1. Retail client sends trade order to broker.
2. Broker enters trade details to SGXAccess.
3. CLOB matches orders that are keyed in and sends confirmations to the brokers immediately.
4. Broker sends confirmation to client.
5. The Central Depository (CDP) nets the cash settlement on settlement date and transfers the securities on gross basis to/from the respective accounts.
Note: Approved foreign brokers who are not members of the SGX can now deal directly in stocks listed in foreign currencies, rather than routing trades through member brokers.
Book-Entry: All shares are traded scripless and the transfer of shares is on a book-entry basis.
Securities are immobilized at a CDP-appointed custodian and registered in the name of Central Depository (Pte) Ltd. Positions are maintained in the sub-custodian’s "depository agent" account, with shares transferred automatically by CDP on settlement date.
Physical: All shares are traded scripless and the transfer of shares is on a book-entry basis.
Securities are immobilized at a CDP-appointed custodian and registered in the name of Central Depository (Pte) Ltd. Positions are maintained in the sub-custodian’s "depository agent" account, with shares transferred automatically by CDP on settlement date. The title to bearer bonds is transferred by physical delivery of the certificates. However, bearer securities have to deposited with a depository bank approved by the Monetary Authority of Singapore.
Enhanced DVP (EDVP) system follows BIS Model 2 – a system in which securities transfers occur on a trade-for-trade (gross) basis throughout the processing cycle. However, fund transfers occur on a net basis at the end of the processing cycle. Security transfers are made via book entry and are final; fund transfers are irreversible, but not final. Therefore, final transfer of securities precedes final transfer of funds (i.e. delivery precedes payment).
Debt Securities Clearing Settlement System (DCSS) and MAS Electronic Payment System plus (MEPS+) systems follow BIS Model 1 where there is simultaneous gross settlement of securities with real time gross settlement (RTGS) of cash. That is, the final transfer of an asset or security to the buying party only occurs when the transfer of cleared funds in payment for the security to the selling party, and vice-versa, is confirmed. This simultaneous exchange of cash and security along with the RTGS of inter-bank obligations, guarantees irrevocability and offers the highest level of customer protection available.
MEPS+ is a real-time gross settlement (RTGS) system developed for large-value Singapore dollar interbank funds transfers and the settlement of scripless Singapore Government Securities (SGS). The main feature of MEPS+ is the real-time and irrevocable transfer of funds and SGS. The settlement of the cash leg of SGD-denominated corporate and other government debt instruments can also be made through MEPS.