London Stock Exchange (LSE) today announces that it has signed a Memorandum of Understanding (the "Agreement") with Singapore Exchange Limited (SGX) to allow the largest and most actively traded stocks on each exchange to be traded by their respective member firms.
Under the Agreement, LSE members will be able to trade the top 36 SGX-listed companies on LSE's newly-created "International Board". These include securities of Singapore's leading indices; the Straits Times Index and MSCI Singapore Index. Similarly, SGX members will be able to trade FTSE 100 securities on SGX's GlobalQuote Board.
For investors, the collaboration will extend trading hours for the most actively traded securities in both markets to around 15 hours each day, providing more opportunities for investment, trading, and risk management for participants in London and Singapore.
For issuers in both markets, the initiative will offer a quotation on a new market without the need for a separate listing, giving access to a new investor audience and the opportunity to benefit from increased stock liquidity. It will also allow leading international businesses to be traded alongside their global peers, on two leading, transparent, regulated exchanges.
The trading of SGX-listed shares on LSE is expected to launch by early next quarter, while LSE-listed securities are expected to start trading on SGX in the first half of 2013, subject to relevant regulatory approvals.
Xavier Rolet, CEO LSE Group said: "I am delighted to announce the launch of this new partnership with Singapore Exchange. Our "International Board", a new and innovative concept, will offer our customers around the globe significant, previously inaccessible opportunities.
"As the world's most international stock exchange, we are committed to bringing global capital and investors to London, as well as raising the profile of companies listed on our markets. This partnership between LSE and SGX will bring exciting opportunities for both FTSE 100 companies and our trading customers around the world."
Magnus Bocker, CEO of SGX said: "We are excited to be partnering with LSE to offer customers in our respective markets a platform for investing in some of the world's largest companies. This partnership delivers on the SGX Asian Gateway offering and is significant for three reasons.
"First, we are broadening the coverage of GlobalQuote so customers in Singapore can now invest in listed companies across the globe, beyond the US and Asia into Europe. Second, we are raising the profile of our top Singapore-listed companies overseas and offering them more liquidity and access to global capital. Third, this international partnership effectively allows investors to act quickly on information and news flow released across several time zones and be able to manage their risks and returns 24/7."
Tony Weeresinghe, Head of Global Development at LSE Group said: "In the last three years, LSE Group has been rapidly enhancing and expanding its operations in developed and emerging economies across the globe. Building on this, the launch of our International Board is a bold first step towards creating an efficient, global trading network, unconstrained by geography. It has the exciting potential to totally transform the way in which companies and investors do business in the twenty-first century."
Trading will take place during normal market hours in both countries. Each day there will be a one or two hour period (depending on the time of year) in which both markets are open simultaneously. Trading of SGX stocks in London will follow LSE's SETS trading calendar (UK standard holidays) and the settlement calendar will follow standard Singapore market holidays. The same logic will apply to trading of FTSE 100 stocks on SGX.
LCH.Clearnet will clear trades of Singapore-listed stocks traded on LSE. These will be settled via the Singapore Central Securities Depository, CDP. Clearing and settlement arrangements for FTSE100 stocks traded in Singapore are subject to further regulatory approval.
Trading of Singapore stocks in London will be carried out in their respective listed currencies including Singapore and US Dollars; and trading on SGX of FTSE 100 stocks will be in Pound Sterling (denominated in Pence). It is envisaged that dedicated market makers will be in place in London and Singapore to provide liquidity on LSE's International Board and on SGX's GlobalQuote Board.