Trading halts: better procedures needed

TRADING halts are one of the most common occurrences in daily market life and are mandatory when listed companies make material announcements such as mergers, rights issues or placements. Yet despite their significance, it is surprising to see that the rules as they stand today are not at all clear and leave plenty of room for uncertainty and, possibly, even opportunity for unfair profit. It is time the Singapore Exchange (SGX) addressed this.

First, according to the exchange's Practice Note 13.1 "Procedures for Trading Halt and Suspension", companies can call for a halt at any time and must give the market at least 30 minutes to absorb the information before trading resumes.

Note that there is no specified time between halt and announcement, but this is fair enough - business negotiations sometimes drag on longer than expected and companies cannot be expected to give an exact time as to when the news…