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SGX proposes new 'trade at close' session for securities market

THE Singapore Exchange (SGX) has proposed a new five-minute long trading session for the securities market that will take place after the closing auction routine ends.

Called "trade at close" (TAC), the session will allow participants to execute orders only at the closing auction price set during the closing auction routine. The TAC session will apply to the ready and unit share markets.

"The introduction of the TAC session will allow investors to trade at a fixed price, namely the closing price of the security, while preserving the integrity of the price discovery process," said Nico Torchetti, head of market services.

SGX will shorten the trading phase preceding the closing routine by five minutes to 4.55pm on a normal trading day, or 11.55am for half-day trading. This will allow the market closing time to remain at 5.06pm and 12.06pm respectively, it said in a press statement.

The three main features of the TAC trading session are:

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1. The session will not occur if there is no closing auction price;

2. Orders will match at only the closing auction price and according to time priority; and

3. Orders can be amended but must all be priced at the closing auction price.

The closing auction price will increase in importance following the introduction of the TAC session, said SGX. The bourse said it will continue to be vigilant on the surveillance front.

Members of the public can submit feedback on the TAC session proposal till Oct 11. If adopted, SGX will implement the TAC session in July 2019.

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