SGX and Bursa Malaysia to develop cross-border trading link

BM-SGX trading link will allow for cross-border clearing and settlement of traded shares on both exchanges.
By Hayley McDowell

Singapore and Malaysia have announced plans to establish a stock market trading link to encourage cross-border investments and lower trading costs.

Financial authorities in both countries will establish the link between the Singapore Exchange (SGX) and Bursa Malaysia (BM) by the end of this year.

The BM-SGX trading link aims to allow investors to trade and settle shares listed on both stock markets in a more cost efficient and convenient way.

Both exchanges will continue to be governed by its own listing, trading and clearing regulations, although they will work together on the operational model and safeguards of the connection.

“This is a unique opportunity to galvanise wider interest in listed companies and boost trading activity in both markets,” said CEO of SGX, Loh Boon Chye. “We will utilise technology to implement an end-to-end solution that delivers a better and more efficient experience for market participants.”

Last year, Hong Kong and Mainland China established a similar trading link which allows overseas funds to buy onshore bonds through Hong Kong.

Known as Bond Connect, the link was developed in order to boost the city’s economy and status as a global financial centre.

“The trading link will help lower trading costs for investors and encourage greater cross-border investments in the stocks listed on each other’s exchanges,” added Lee Boon Ngiap, assistant managing director at the Monetary Authority of Singapore.

“This will improve the liquidity of both our stock markets. I hope this initiative will in time expand to include the rest of the stock exchanges in the Association of Southeast Asian Nations (ASEAN).”