SINGAPORE, Oct 31: The Singapore Exchange (SGX), whose method of monitoring unusual trades has long been the subject of public curiosity, on Wednesday detailed how it goes about the business.

The disclosure is part of a move to ensure greater transparency in the marketplace.

According to a five-page report on Wednesday, SGX’s market surveillance and enforcement (MSE) department uses a real-time market surveillance system that automatically alerts its officers to unusual price and volume movements of a counter.

The report did not state how SGX determines what “unusual” is.

An MSE officer then checks if any public information or other various factors can explain the market activity.

If no explanation is apparent, SGX requires the issuer to inform the public about whether it is aware of any material information that might have reasonably led to the unusual nature of trades.

Depending on the extent of the unusual trading activity, the MSE department then poses either an oral or written query to the issuer.

Unless specifically necessary, oral queries and their responses are not typically required to be posted on Masnet, the online repository of public company announcements, the SGX statement said.

The MSE department then tends to monitor the counter further, to see if a written query is warranted. If it decides that one is necessary, the written query will be posted on Masnet by the SGX immediately after its issue.

Wherever possible, the MSE officer will alert the issuer’s authorized representative before the query is issued.—Straits Times/Asia News Network