Rulebooks: Contents

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SGX-ST Rules
Section D — Regulatory Framework
Chapter 11 — Capital and Financial Requirements
Rule Amendments

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  • 11.9 Margin Financing

    • 11.9.1

      Subject to the margin financing requirements of this Rule, a Trading Member who is licensed to conduct product financing may extend credit facilities to customers for transactions in Specified Products.

      Amended on 23 January 2009 and 8 October 2018.

    • 11.9.1A

      (1) In the case of a Trading Member that holds a Capital Markets Services Licence, Rules 11.9.2 to 11.9.16 shall apply; and
      (2) in the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), such requirements as may be prescribed by the Relevant Regulatory Authority shall apply. The Trading Member shall immediately notify SGX-ST on any changes to such requirements. Where no such requirements have been prescribed by the Relevant Regulatory Authority, Rules 11.9.2 to 11.9.16 shall apply. Notwithstanding the foregoing, SGX-ST shall have the discretion to prescribe additional requirements.

      Added on 19 May 2014 and amended on 29 December 2014.

    • 11.9.2

      Margin financing arrangements shall be evidenced in the form of a written agreement executed between the Trading Member and the customer.

      Amended on 23 January 2009.

    • 11.9.3

      If a Trading Member seeks to mortgage, pledge or hypothecate the Specified Products or property of any customer who operates a margin financing account with a Trading Member (such account being an account carried on the books of the Trading Member) shall authorise the Trading Member to mortgage, pledge or hypothecate the customer's securities or property for a sum not exceeding the debit balance in the margin financing account and without obligation to retain in its possession or control Specified Products of like character. The Trading Member shall also be given the discretion to sell or dispose of any or all the Specified Products in any manner in order to meet with the prescribed margin financing requirements.

      Amended on 23 January 2009, 1 July 2016 and 8 October 2018.

    • 11.9.4

      A Trading Member shall not cause or permit any new transaction made in a customer's margin financing account (such account being an account carried on the books of the Trading Member) unless the resulting equity in the account is not less than 140% of the debit balance, or the Trading Member has required the customer to deposit margin in the margin financing account within 2 Market Days from the date of the Specified Products transaction to bring the equity to not less than 140% of the debit balance.

      Amended on 23 January 2009, 1 July 2016 and 8 October 2018.

    • 11.9.5

      A Trading Member who provides margin financing must obtain margin from each customer in respect of any margin financing account (such account being an account carried on the books of the Trading Member) and in respect of any credit facility provided to the customer for Specified Products transactions. The margin deposited by customers with the Trading Member shall be in the form of acceptable collateral and such other instruments as SGX-ST may from time to time prescribe.

      Amended on 10 November 2006 and 8 October 2018.

    • 11.9.6

      (1) A Trading Member shall not cause or permit the equity in a customer's margin financing account (such account being an account carried on the books of the Trading Member) to fall to or below 110% of the debit balance in the customer's margin financing account, unless the Trading Member has immediately required the customer to provide additional margin in the margin financing account within 2 Market Days from the date of notice to increase the equity in the customer's margin financing account to more than 110% of the debit balance in the customer's margin financing account.
      (2) Where the equity in a customer's margin financing account falls to or below 110% of the debit balance in his margin financing account, and that the customer has failed to provide additional margin to increase the equity in his margin financing account to more than 110% of the debit balance in his margin financing account within the prescribed time frame referred to in Rule 11.9.6(1), a Trading Member shall have discretion, including, where appropriate, liquidating the Specified Products purchased via the margin financing account including the acceptable collateral deposited to bring the equity to more than 110% of the debit balance without notice to the customer.

      Amended on 10 November 2006, 23 January 2009, 1 July 2016 and 8 October 2018.

    • 11.9.7 [Rule has been deleted.]

      Deleted on 14 November 2005.

    • 11.9.8

      A Trading Member shall cause daily review to be made of all margin financing accounts carried on the books of the Trading Member to ensure that credit is not over-extended beyond the approved facility and that the margin financing requirements prescribed above are met at all times. For the purpose of computing margin financing requirements in a margin financing account, the last done price of the Specified Product on the preceding Market Day, or in the case of a Prescribed Instrument, the closing price of the Prescribed Instrument on the preceding Market Day, shall be used. All transactions done on the same day shall be combined on a transaction date basis and the total cost of purchase or the net proceeds of sale including any commission charged and other expenses shall be taken into account for computing margin financing requirements.

      Amended on 23 January 2009, 24 February 2014, 1 July 2016 and 8 October 2018.

    • 11.9.9

      A Trading Member shall have the discretion to impose higher margin financing requirements on any of its customers.

      Amended on 23 January 2009.

    • 11.9.10

      A customer may withdraw cash or Specified Products from his margin financing account carried on the books of his Trading Member provided that the equity in his account does not fall to 140% of the debit balance or less.

      Amended on 23 January 2009, 1 July 2016 and 8 October 2018.

    • 11.9.11

      A Trading Member shall not cause or permit:

      (1) the aggregate of the margin exposures in the margin financing accounts of all customers (such accounts being accounts carried on the books of the Trading Member) to exceed 300%, or such other percentage as SGX-ST may allow, of its free financial resources;
      (2) the aggregate of the margin exposures in the margin financing accounts of all customers in respect of Specified Products, other than Specified Products quoted on SGX-ST, to exceed 100%, or such other percentage as SGX-ST may allow, of its free financial resources; and
      (3) the debit balance in each customer's margin financing account to exceed 20%, or such other percentage as SGX-ST may allow, of its free financial resources.

      Amended on 12 October 2005, 23 January 2009, 1 July 2016 and 8 October 2018.

    • 11.9.12 [Rule has been deleted.]

      Deleted on 12 October 2005.

    • 11.9.13

      All transactions in a margin account carried on the books of the Trading Member shall be on an immediate or a ready basis. The margin account shall not be used to subscribe for new issue of securities, or to meet margin requirements in respect of Marginable Futures Contracts.

      Amended on 23 January 2009 and 1 July 2016.

    • 11.9.14

      In computing the market value of Specified Products bought and carried in a customer's margin financing account (such account being an account carried on the books of the Trading Member) and the market value of securities deposited as collateral by the margin customer, the Trading Member shall apply such applicable discounts as SGX-ST may prescribe from time to time.

      Amended on 23 January 2009, 1 July 2016 and 8 October 2018.

    • 11.9.15

      SGX-ST shall have the absolute discretion to vary any or all of the margin financing requirements stipulated in Rule 11.9, and impose such other requirements for margin financing transactions from time to time as it deems fit and appropriate.

      Amended on 23 January 2009.

    • 11.9.16

      In this Rule:—

      Term Meaning
      "debit balance" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).
      "equity" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).
      "free financial resources" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).
      "acceptable collateral" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).
      "margin exposure" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).

      Amended on 12 October 2005 and 10 November 2006.