SGX Trading Halt and Suspension

Trading Halt

The SGX trading halt is a temporary pause in trading of a specific security that can be initiated either by the issuer or by SGX-ST in certain situations. The primary objective of a trading halt is to allow investors to receive material information about the security before they decide on any further trades, which could potentially be influenced by the undisclosed information.

During a trading halt, unmatched orders within the trading system may be considered lapsed by SGX-ST, and the status of such orders will be communicated to trading members before the lifting of the market suspension. While a trading halt typically lasts for a minimum of 30 minutes and a maximum of three market days, the duration can be extended beyond three market days at the request of the issuer.

Upon the lifting of a trading halt, the stock will re-enter the phase of the market at that time. It is important to differentiate between a trading halt and a suspension, which is often a more extended period of time.

Suspension

In the context of SGX, a suspension involves a longer-term cessation of trading in a particular security, which can be imposed due to a range of issues, such as regulatory, legal, or operational concerns. Unlike a trading halt, which is usually a short-term measure initiated to reveal important information about a security to investors, a suspension is implemented when there are major concerns about the security or the market as a whole.

During a suspension, trading for the particular security is halted, and all orders in the trading system are suspended until further notice. Depending on the situation, SGX may cancel all unmatched orders and return them to the respective trading members. The length of the suspension may vary depending on the nature and severity of the underlying concerns. SGX may lift the suspension once the issues have been resolved and any required corrective actions have been taken.

It is essential to distinguish between a suspension and a trading halt, which is a temporary interruption of trading initiated to disclose material information about a security. A trading halt is generally shorter-term and less severe than a suspension.

According to an article on the straitstimes.com website, SGX has released a list of companies that have been suspended for over 12 months due to regulatory issues. This indicates that suspension can last for a year or even longer, depending on the severity of the underlying concerns. It is important for investors to be aware of this possibility when making investment decisions.