To complement the SGX-Nasdaq listings bridge, should market making be compulsory?

SINGAPORE’S equities revival has been a striking development with the Straits Times Index outperforming many other markets over the past 18 months. Much of the credit belongs to the steady, deliberate efforts under the Equities Market Development Programme (EQDP), spearheaded by the Monetary Authority of Singapore and the Singapore Exchange (SGX).

Complementing this programme is a new framework for dual-listing arrangements. The latest update came in the form of an announcement that plans for the SGX-Nasdaq bridge are on track. It provided details on how regulations are to be aligned and how companies will list on the Global Listing Board. (* See amendment note)

There was, however, one noticeable omission: whether or not market makers must be appointed for Nasdaq companies seeking a dual listing on SGX. Nasdaq’s current listing rules require companies to employ at least three market makers to ensure sufficient liquidity in their shares while SGX’s rules do not. (Market makers offer liquidity to the market by quoting buy and sell prices for the securities they trade.)