PSE prepares for new trading system

MANILA, Philippines - All is set for the migration of the Philippine Stock Exchange to a more state-of-the-art trading system this year after it obtained the Securities and Exchange Commission’s approval of the revised trading rules.

The revised trading rules cover the introduction of the pre-close session to determine the day’s closing price for securities, adoption of a reduced tick size and board lot, real-time monitoring of foreign ownership, new order and validity types and standardization of the account code, among others.

The new trading system application was acquired from NYSE Euronext, which operates the largest exchanges around the world including the New York Stock Exchange. This application is used to trade a wide range of cash, debt and derivative instruments not currently possible through the current Mark Trade system used by the PSE since 1993.

The start of the new system was originally set in October 2009 but was postponed as the PSE grappled with a host of technical and regulatory issues.

PSE chief operating officer Val Antonio B. Suarez said the new trading system will improve the speed and efficiency at which stocks are transacted at the stock market.

The new system is also expected to exponentially improve the capacity of the PSE to handle any future sharp increase in its value turnover.

It is also seen to complement PSE’s plan to extend trading hours. Approved in August last year, the extended trading session is expected to attract more overseas investors and boost volumes.

Currently, the PSE only trades for two and a half hours in the morning, from 9:30 a.m. to noon, giving it one of the shortest trading days in the region. Afternoon trading, from 2 p.m. to 4 p.m., will be introduced to coincide with the new trading system.

The PSE tried afternoon trading in 2002 but it stopped after eight months because the extended hours, from 1 p.m. to 2:30 p.m., coincided with the mid-day trading break of exchanges in Malaysia, Singapore, Indonesia, Hong Kong and Thailand.