SGX stocks dual-listed in Europe will not be affected by Mifid II: MAS

EUROPEAN investors in Singapore-listed stocks that are dual-listed in Europe can continue to transact without being affected by the European Union's new financial markets regulations, known as MiFID II, which enter into force on Jan 3.

Stocks that are dual-listed in Singapore and Europe, such as Jardine Matheson Holdings, Jardine Strategic Holdings and Hongkong Land will not trigger a trading obligation under MiFID II, the Monetary Authority of Singapore (MAS) clarified on Thursday.

This is because virtually all trading in these stocks occurs on the Singapore Exchange (SGX), rather than on European trading venues.

The EU trading obligation would apply to shares dual-listed in other recognised countries only if trading in the EU constitutes a significant percentage of the shares' global trading volume.

The SGX said in a statement on Thursday: "We welcome the clarification by MAS today that EU parties can continue to transact on SGX.

"We also note the earlier clarification from the European Securities and Market Authority on Nov 13, that the absence of an equivalence decision with respect to a particular third country's trading venues indicates that the EC has currently no evidence that trading in the relevant dual-listed shares in the EU is systematic, regular and frequent."

On Dec 13, the European Commission declared MiFID II share trading venue equivalence in relation to dual listings on some trading venues in the US, Australia and Hong Kong.

In response to media queries, the MAS noted that the absence of an equivalence decision by the Commission for Singapore indicates that shares listed on the Singapore Exchange (SGX) would not trigger the trading obligation under MiFID II and that EU counterparties can continue to transact in all SGX-listed shares.

The MAS added that it will continue to engage the Commission on the equivalence determination for over-the-counter (OTC) derivatives trading venues in Singapore to facilitate cross-border trading.

The MAS said: "MAS has been in close discussions with the EC as European counterparties are significant players in the Singapore OTC derivatives markets. We are also working with our industry participants to mitigate any market disruption with the commencement of MiFID II."