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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  • 11.8 Exposure to Single Security

    This Rule 11.8 shall apply to a Trading Member that holds a Capital Markets Services Licence.

    Amended on 19 May 2014 and 29 December 2014.

    • 11.8.1

      A Trading Member shall immediately notify SGX-ST if the Trading Member's exposure to a single security exceeds:—

      (1) in the case where the security is quoted on SGX-ST or any recognised group A securities exchange, 300% of its average aggregate resources;
      (2) in all where the security is quoted other than as specified in Rule 11.8.1(1), 100% of its average aggregate resources;
      (3) in the case where the security is approved for quotation on SGX-ST or any recognised group A securities exchange but has not, as yet, been so quoted:—
      (a) 100% of the average aggregate resources of the Trading Member if its aggregate resources is less than $75 million; or
      (b) 150% of the average aggregate resources of the Trading Member if its aggregate resources is $75 million or more,
      Provided that the exposure under Rule 11.8.1(3) together with the exposure, if any, to securities already quoted, shall not exceed the limit specified in Rule 11.8.1(1); and
      (4) 10% of its average aggregate resources if the security is unquoted, but shall not include any security issued by:—
      (a) any subsidiary of the Trading Member which is established solely for the purpose of providing research, nominee, custodian or trustee services; or
      (b) any other company which SGX-ST may approve.

    • 11.8.2

      To reduce a Trading Member's risk exposure to a single security, SGX-ST shall have the right to impose on the Trading Member such risk management requirements as it thinks fit.

    • 11.8.3

      For the purpose of Rule 11.8.1, the full amount of the letter(s) of credit or any part thereof deposited pursuant to Rule 11.4.6 may be taken into account for the calculation of aggregate resources.

      Amended on 29 December 2014.

    • 11.8.4

      For the purpose of Rule 11.8.1, "exposure to a single security" means:—

      (1) the amount of the single security underwritten or sub-underwritten by or placed with a Trading Member, after deducting the amount which the Trading Member has sub-underwritten or placed with:—
      (a) a bank licensed under the Banking Act (Cap. 19);
      (b) a merchant bank approved as a financial institution under the Monetary Authority of Singapore Act (Cap. 186);
      (c) a finance company licensed under the Finance Companies Act (Cap. 108);
      (d) a company or society registered under the Insurance Act (Cap. 142) to carry on insurance business as an insurer;
      (e) the holder of a Capital Markets Services Licence under the Securities and Futures Act for dealing in capital markets products for fund management;
      (f) a financial institution outside Singapore which is licensed or regulated by a financial services regulatory authority in the country in which it is domiciled, and has a long-term credit rating of investment grade; and
      (g) any other person, provided that:—
      (i) full payment has been received by the Trading Member for the sub-underwritten, placed, sold or allotted amount; or
      (ii) the sub-underwritten, placed, sold or allotted amount can be offset against collateral received by the Trading Member under a netting agreement.
      (2) the book value of the single security carried long or the market value of the single security carried short in a Trading Member's own account carried on the books of the Trading Member;
      (3) for outstanding options in the single security carried in a Trading Member's own options trading account carried on the books of the Trading Member:—
      (a) the book value of options bought for the account;
      (b) the excess of the market value of the underlying security over the exercise price of uncovered call options written for the account; and
      (c) the excess of the exercise price of put options written for the account over the market value of the underlying security;
      (4) in relation to the single security carried in a customer's cash account carried on the books of the Trading Member, the contract value of the single security to the extent that such amounts have not been paid for, or the market value of the single security to the extent that such securities have not been delivered, whichever is the higher;
      (5) for outstanding options in the single security carried in a customer's options trading account carried on the books of the Trading Member:—
      (a) the contract value of the options bought by the customer to the extent that such amounts have not been paid for;
      (b) the excess of the market value of the underlying security over the exercise price of uncovered call options written by the customer; and
      (c) the excess of the exercise price of put options written by the customer over the market value of the underlying security;
      (6) the net amount of the single security borrowed or lent, as the case may be, by a Trading Member;
      (7) in relation to the single security bought or carried, or deposited as collateral in the margin financing accounts carried on the books of the Trading Member, the margin exposure of a Trading Member to the single security as determined in accordance with the margin financing requirements prescribed by SGX-ST;
      (8) the amount of interest receivable secured by the single security;
      (9) the amount of loans and advances secured by the single security; and
      (10) the amount under subscription by a Trading Member for its own account carried on the books of the Trading Member in relation to the single security which is approved for quotation on SGX-ST or any recognised group A securities exchange but has not, as yet, been so quoted.

      Amended on 23 January 2009, 29 December 2014, 1 July 2016 and 8 October 2018.

    • 11.8.5

      For the purposes of this Rule, a security is deemed to be carried in a customer's cash account or a Trading Member's own account (such account being an account carried on the books of the Trading Member) on the contract date specified in the contract note in respect of the transaction in that security or on the exercise date specified in the exercise notice in respect of an option in that security which has been exercised.

      Amended on 1 July 2016.

    • 11.8.6

      For the purposes of this Rule, in calculating exposure in any particular security, all outstanding options exercisable into that security shall be included in such computation.

    • 11.8.6A

      For the purposes of Rule 11.8.4(2) and Rule 11.8.4(4), in calculating exposure in any particular security, all futures contracts with that security as an underlying shall be included in such computation.

      Added on 3 April 2008.

    • 11.8.7

      This Rule shall not apply to:—

      (1) securities issued by the Singapore Government or any public authority in Singapore; and
      (2) a Trading Member's arbitrage transactions.

    • 11.8.8

      For the purposes of this Rule, where a security quoted on SGX-ST or any recognised group A securities exchange has been suspended for more than 30 consecutive days, a Trading Member shall not permit its exposure to the security to increase in monetary value above the level subsisting on the thirtieth consecutive day of suspension until such time that the suspension has been lifted.

    • 11.8.9

      In this Rule:—

      "single security" includes ordinary and preference shares, loan stocks, company warrants, structured warrants, transferable subscription rights, bonds, debentures, depository receipts, options and any other debt instruments or equity securities.

      Amended on 3 April 2008.