SICOMs Gold Contract To Start Trading March 30
Singapore Commodity Exchange (SICOM), a subsidiary of Singapore Exchange (SGX), will commence trading its new Gold Deferred Settlement Contract (“SICOM Gold”) on Tuesday, 30 March 2010, 9:38am (Singapore time)*.
SICOM Gold is a deferred-settlement contract regulated as a commodity contract under the Commodity Trading Act (CTA) of Singapore. The contract’s unique feature is that it is priced as a spot contract with deferred settlement. Deferred settlement occurs when open positions at the end of each trading day are automatically “rolled forward” using current interest rates. Open positions are margined and marked-to-market daily based on the PM Gold Market fixing price established by The London Gold Market Fixing Limited. A position is closed by simply entering an opposite position. Trading hours of this contract are from 8.30am to 11.00pm (Singapore time), capturing both the Asian and European trading hours.
The SICOM Gold contract allows market participants to gain exposure to the international spot gold price without having to handle any physical delivery of gold nor payment of the full notional contract value. Market participants can also benefit from better risk management and more competitive bid-ask quotes with SICOM as the central counterparty in an open access marketplace.
SICOM’s Chief Executive Officer, Jeremy Ang said, “We are pleased to introduce our first new contract, the SICOM Gold. With its innovative features, the security of trading on an exchange and the popularity of gold trading, we are positive that SICOM Gold will appeal to global investors.”
* Electronic trading hours on subsequent days will commence at 8:30am on other business days.