Singapore Exchange (SGX)

[weijian]

Would it be better for our stock market if CDP is a separate non-profit institution(assuming it's under SGX P&L currently ? ) given the unique role in the ecosystem ?

hi dreamybear,

The CDP is a wholly owned subsidiary of SGX. Besides been the depository agent (ie holding stocks in trust) as discussed, it is also a clearing house that removes the counterparty risk talked about earlier.

I do not think this role is unique in the ecosystem as it is very common elsewhere. For example the LME, bought by HKEX some time back, is a clearing house between commodity traders.

Risk is multi-fold. Taking low risk actions doesn't mean you will achieve results of lower risk. For example, keeping money in the bank is a low risk move against failed investments but exposes one to other risks like scams or inflation. Actions to address known risks will probably create new risks. For example, car seat belts were invented to address mortal injuries resulting in fatal car accidents but because they felt safe, more non-fatal accidents happened as a result even as fatal accidents did reduce.