Contra rules good for quality, but could hurt volumes: industry

5% collateral seen as reducing risk without crimping turnover too much

[SINGAPORE] Proposed curbs targeting uncollateralised contra trading should improve the quality of the Singapore stock market, but the hit on liquidity remains a major concern, industry stakeholders said.

"While we foresee the proposed changes, if implemented, are likely to have some impact on trading activity, it is still early days to quantify the level of impact," Maybank Kim Eng regional head of retail equities Jeffrey Goh said.

"Overall, we believe the proposals are steps in the right direction that should benefit the securities market in the long term. By reducing the risk of market manipulation, the proposed changes will promote confidence and prudence in investing."

The Monetary Authority...

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