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March 26, 1998
Singapore stock exchange may allow individual Internet trade
SINGAPORE (AP) -- Singapore's stock exchange is considering a world first: allowing small investors to trade on the Internet, bypassing brokerage firms.
Elsewhere, investors who trade on the Internet type in their orders and send them to online brokerage services, which then execute the transactions for a fee.
Singapore's largest newspaper, The Straits Times, quoted anonymous sources Wednesday as saying the system will go into effect by the end of the year.
The Internet trades would be limited to 50,000 Singapore dollars ($31,250) a day and would have to be executed immediately at prevailing market rates, the paper reported.
Brokerage houses were unhappy about the idea, saying it would make Singapore the first stock exchange in the world to compete against its own members for business. Brokers charge 1 percent commission on small trades under the current system.
Singapore is a high-tech society where the government encourages the use of computers for everything from filing tax returns to meeting a prospective spouse. In general, the use of more technology in share trading is viewed as inevitable and welcome in the financial community, but the immediate reaction to Internet stock trading was negative.
"We can't stop technological advances," Yap Swee Hoo, president of Singapore's Society of Remisiers, told Dow Jones Newswires. "But as a society, we hope we can be consulted so that we can understand what they want to achieve. None of us has been consulted."
The Society of Remisiers is an association of stock dealers that works under the umbrella of brokerage houses. But unlike institutional dealers, remisiers are responsible for their own trading activity, profits and losses.
"There are still several issues to be ironed out," Stock Exchange spokesman Peter Cheah told Dow Jones Newswires. The idea is at an exploratory stage, he said, adding, "Nothing has been confirmed."