The Singapore Exchange Limited (SGX) will reduce the standard board lot size of securities listed on SGX from 1,000 units currently to 100 units from 19 January 2015.


The reduction will apply to ordinary shares, including shares traded on GlobalQuote, real estate investment trusts, business trusts, company warrants, structured warrants and extended settlement contracts. 

Existing counters with board lot sizes of 100 or less units will remain unchanged. Similarly, the board lot sizes for exchange traded funds (except for the SPDR Straits Times Index (STI) ETF and ABF Singapore Index Bond Fund for which the board lot size will be reduced to 100 units), American Depositary Receipts, fixed income instruments (including retail bonds), Singapore Government Securities and preference shares will remain unchanged.

As a result of the change, a minimum subscription and allocation value - S$500 for Mainboard issuers and S$200 for Catalist issuers - will be imposed on investors applying for shares offered during an initial public offering (IPO). This is to address the possibility of disproportionately high trading costs that may be incurred by IPO applicants who are allotted the minimum number of shares (one board lot of 100 shares) at the minimum issue price for IPO shares. With this change, listing aspirants now have discretion to set their own minimum subscription quantity, which must be in multiples of 100 shares. This means that the minimum subscription quantity of shares may differ from one IPO to another, depending on the issue price for the IPO shares. 


Consequential amendments are proposed to be made to the SGX Listing Rules, to cater for the reduction of the board lot size. These include the removal of Mainboard Listing Rules specifying the minimum board lot size for structured warrants (given the adoption of the standard board lot size of 100 units for structured warrants) and amendments to the Mainboard and Catalist Listing Rules to require issuers to specify in the annual report the number of shareholders who hold less than 100 shares.

The existing requirements on the minimum initial shareholding spread requirements and distribution guidelines at listing and the minimum float requirements post-listing have been retained, as these should continue to serve as preventive measures against concentration of shares, disorderly trading and market manipulation.


The move by SGX to reduce the standard board lot size of securities listed on SGX is designed to make it more affordable for retail investors to invest in a wider range of equities, including blue chips and index component stocks, both of which tend to be higher-priced, and enable them to build more balanced and diversified portfolios. The change will also allow investors with odd lots (100 shares and above) to sell the stock in the regular market instead of what is called the odd-lot market, where prices are at a discount to the market value. Furthermore, the move will allow institutional investors to better manage their risk exposures through finer asset allocation of funds.

SGX's decision to reduce the board lot size of securities is also generally seen as a safeguard measure in the wake of the penny stock crash involving Asiasons Capital, Blumont Group and LionGold Corp in October 2012. By making blue chip stocks more accessible to retail investors from an affordability perspective, it is hoped that the reduction in the board lot size of securities would invite retail investors to invest more in these less risky counters than settle for relatively more risky, lowly-priced shares which they could previously only afford. This will enable retail investors to more easily build balanced and diversified portfolios to grow their savings.


As part of its efforts to spur retail participation, SGX has also said that the move to reduce the board lot size from 1,000 shares to 100 shares may eventually pave the way to unit share trading. Other than improving the investor base and facilitating price discovery, unit share trading will align Singapore with other well-known exchanges around the world. The New York Stock Exchange, Nasdaq, and the Australian Securities Exchange have a board lot size of one. Board lot sizes at the Hong Kong and Tokyo exchanges are non-standard, to be determined by the issuer.