Rulebooks: Contents

Rulebooks
Mainboard Rules
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SGX-ST Rules
CDP Clearing Rules
DVP Rules
CDP Depository Rules
Futures Trading Rules
Chapter 1 General Matters
Chapter 2 Access and Membership
Chapter 3 Conduct of Members, Approved Traders and Representatives
Chapter 4 Listing and Trading of Contracts
Chapter 5 Physical Delivery
Chapter 6 Dispute Resolution and Arbitration
Chapter 7 Adverse Events, Rule Violations and Disciplinary Action
Chapter 8 Definitions and Interpretation
Chapter 9 Transitional Provisions
Regulatory Notices
Practice Notes
Practice Note 3.4.3A — Processes for Review of Orders and Trades
Schedules
SGX-DC Clearing Rules
SIAC DT Arbitration Rules
SIAC DC Arbitration Rules
Rule Amendments

  Versions
(1 version)
 
Mar 15 2013 onwards

Practice Note 3.4.3A — Processes for Review of Orders and Trades

Issue Date Cross Reference Enquiries
Added on 15 March 2013. Rule 3.4.3A Please contact Member Supervision:

Facsimile No : 6538 8273
E-Mail Address: membersup@sgx.com

1. Introduction

1.1 This Practice Note provides guidance on what Members should do as part of their processes for post-execution review of orders and trades.

2. Guidance on processes

2.1 Members should adopt processes to place suspicious orders and trades on exception reports or to trigger automated alerts for review. Exception reports and alerts should be reviewed by an independent party like a compliance officer or other appropriately qualified person on a regular basis to detect orders and trades or patterns of orders and trades which give rise to the possibility of non-compliance with the Rules. The review process may involve further enquiry with Approved Traders, Registered Representatives and/or customers or reviewing other Approved Trader, Registered Representative or customer-related information such as past trading activity.
2.2 Members are expected to follow up on suspicious orders and trades, keep on file the result of their review process and report such activity to the Exchange pursuant to Rule 3.4.4. Additionally, Members are expected to take appropriate action, such as advising the Approved Trader, Registered Representative or customer to refrain from such activity, performing a closer monitoring of the account activity of the Approved Trader, Registered Representative or customer and ultimately to close the account if the suspicious activity persists. Members should note that the mere fact that an order has been placed on an exception report does not absolve them from their underlying compliance responsibilities.

3. Parameters to assist in detecting suspicious trading behaviour

3.1 The effectiveness of processes to identify suspicious trading behaviour depends to a large extent on the types of parameters and thresholds set. It may be necessary for the officer reviewing orders and trades to understand the strategies employed by the Member's Approved Traders, Registered Representatives or customers in order to determine the appropriate parameters and thresholds
3.2 Members should employ processes that facilitate the identification of irregular orders/trades regardless of whether they originate from one Approved Trader, Registered Representative or customer or a group of such individuals acting in concert. In addition, they should also be familiar with trading patterns so as to be able to identify irregular trades.
3.3 In setting parameters, Members should take note of Contracts which are illiquid which make them susceptible to price manipulation.

Amended on 15 March 2013.