SGX, LSE Sign Cross Trading Agreement

Singapore Exchange (SGX) has signed a Memorandum of Understanding Wednesday with London Stock Exchange (LSE) to jointly develop capabilities which will enable cross-trading of their largest and most actively traded stocks.

Under the agreement, SGX members will be able to trade FTSE100 securities on SGX’s GlobalQuote Board while LSE members will be able to trade 36 securities of Singapore’s leading indices on LSE’s newly-created International Board.

The collaboration will enable investors to have access, over extended hours, to the most actively traded securities in both markets, providing them with more opportunities for investment, trading, and risk management.

For issuers in both markets, the initiative will offer 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.

The proposed collaboration will occur in stages. Subject to regulatory approvals, the relevant SGX securities will be quoted on LSE’s newly created international Board by early next quarter while the relevant LSE securities will be quoted on SGX’s GlobalQuote by 1H2013.

“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 overseas profile of our top Singapore-listed companies 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 across several time zones and manage their risks almost round-the-clock,” said Magnus Bocker, CEO of SGX.

For his part, Xavier Rolet, CEO of LSE Group, said the collaboration will bring “exciting” opportunities to both FTSE100 companies and trading customers around the world.

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 FTSE100 stocks will be in Pound Sterling.

Dedicated market makers are expected to be in place in London and Singapore to provide liquidity on LSE’s International Board and on SGX’s GlobalQuote.