The Singapore Exchange's cancellation of an errant trade in DIAMOND DIA 10 ETFs raises again the conflict of interest between the SGX's roles as a provider of a platform to trade securities, and being the regulator of that platform. It's reversed a trade in which DBS Vickers Securities sold 16,300 DIA units at US$1.19 each, far below the last traded price of US$108. Apparently, someone at DBS made an error when keying in the stock code. My view is the trade should stand.

My reasons:

First, a trade is a trade. By cancelling it, Phillip Securities and the unidentified customer who bought these units at such a low price, are being made to pay for DBS Vickers' mistake. Even if it was made out of carelessness, you and I both know we can't afford to that in this fast-paced market. Phillip and DBS Vickers now have to agree on how much compensation should be paid but anything less than the actual potential gain would punish Phillip.

Secondly, as a buyer constantly on the lookout for cheap stocks it seems unfair for someone to come along, in this case the SGX, and tell you, 'no, you can't buy it at that price'. Afterall, stores that advertise goods at a particular price have to stand by their offer, even if they made a printing error in their catalogue.

Granted, the amounts of money involve are huge. DBS Vickers had actually offered to sell 75,000 DIA ETFs at US$1.19 apiece, worth just US$89,250. If the units had been sold at the last done price on the SGX, at US$108, it would have been worth US$8.1 mln. If they had been sold at the last price on the American Stock Exchange, the total value would have been US$9.3 mln. The difference in the price of the 16,300 securities Phillip bought at US$1.19 and the price they would have paid at $108 is US$1.74 mln.

The formula is simple. No one should be 'punished' for another's mistake. You made an error, so accept it and learn. The SGX's cancellation of the trade was a 'humane' act for DBS Vickers, but in my view not the right one for Phillip Securities.