Rulebooks: Contents

Rulebooks
Mainboard Rules
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SGX-ST Rules
CDP Clearing Rules
DVP Rules
CDP Depository Rules
Futures Trading Rules
SGX-DC Clearing Rules
Chapter 1 Application of Rules
Chapter 2 Clearing Membership
Chapter 3 Committees
Chapter 4 Enforcement of Rules
Chapter 5 Arbitration
Chapter 6 Delivery and Related Matters
Chapter 7 Clearing and Margins
Chapter 7A Suspension and Default
Chapter 7B Payments
Chapter 8 Mutual Offset System
Chapter 9 Definitions and Interpretation
Chapter 10 Transitional Provisions
Directives
Practice Notes
Practice Note 2.28A.1.3 — Pre-Execution Checks
Appendices
Schedules
SIAC DT Arbitration Rules
SIAC DC Arbitration Rules
Rule Amendments

  Versions
(2 versions)
 
Mar 15 2013 - Nov 13 2016Nov 14 2016 onwards

Practice Note 2.28A.1.3 — Pre-Execution Checks

Issue Date Cross Reference Enquiries
Added on 15 March 2013 and amended on 14 November 2016. Rule 2.28A.1.3 Please contact Member Supervision:

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

1. Introduction

1.1 This Practice Note provides further details on the pre-execution checks contemplated in Rule 2.28A.1.3.

2. Pre-Execution Checks

2.1 Rule 2.28A.1.3 requires a Clearing Member, in order to clear the trades of a Trading Member, to satisfy the Clearing House that it has in place automated pre-execution credit control checks to monitor the Trading Member's trades and manage its risk exposure to such trades. The purpose of this is to prevent overtrading and for credit risk management purposes. As such, the checks must be appropriately set to effectively limit the firm's risk exposure to Trading Members to prevent the taking on of excessive risk.
2.2 [This paragraph is deleted.]
2.3 Clearing Members will be able to meet the requirement in Rule 2.28A.1.3 by using the appropriate Exchange-hosted pre-execution checks, or by directly setting and controlling the appropriate pre-determined automated limits in the Trading Member's system, having automated alerts whenever such limits are altered, and by conducting regular post-execution reviews of trades. Clearing Members should assess and continue to ensure that the pre-execution risk management control checks are robust on an ongoing basis.

Added on 15 March 2013 and amended on 14 November 2016.