SINGAPORE: Singapore Exchange's regulatory unit is proposing imposing price limits during daily stock auctions to prevent incidents such as the US$41 billion flash crash in January that briefly roiled shares in conglomerate Jardine Matheson.
Currently, SGX has daily circuit limits during trading hours but not for auctions, during which brokers place buy and sell orders. Officials from SGX Regulation (SGX RegCo) said the regulatory unit is proposing a 30 per cent price cap for the opening auction and a 10 per cent price cap for the midday and closing auctions.
AdvertisementAdvertisementThe proposals are aimed at safeguarding against price dislocations, Tan Boon Gin, chief executive of SGX RegCo, told a news conference.
Shares in Jardine Matheson crashed 83 per cent in early trade on Jan 24, wiping nearly US$41 billion off its market value, before rebounding as its shares changed hands far below the market level.
Some brokers involved in the trade had requested SGX to amend or cancel the trades but SGX had said trading was orderly and it found no basis to cancel the transactions after a review.
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