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Practice Note 4.1.10 — Cross Trades

Past version: Effective from 25 Oct 2012 to 06 Jul 2015

Issue Date Cross Reference Enquiries
Added on
22 September 2006
and amended on
2 July 20072 July 2007.
Rule 4.1.10 Please contact:

Market Surveillance
Mr Christopher Chong 6236-8316
Ms Sally Lim 6236-5172

Enforcement
Ms Angelina Foo 6236-8842
E-Mail Address : enforcement@sgx.com

1. Cross Trades

1.1 In normal circumstances, the Exchange would consider that a cross trade was not prearranged if there is a time lag of ten (10) seconds between the entry of the first and second legs of the orders. However, if the time lag is less than ten (10) seconds, or the Exchange nevertheless suspects a cross trade was pre-arranged, the Member or the Approved Trader would have to satisfy the Exchange otherwise.
1.2 The following are examples on the application of Rule 4.1.10:

The Contract is NKH'06 with a tick size of 5 points.

Example Existing Bid Existing Offer Last traded price
(a) 11710 11740 11740
(b) 11710 11740 11740
(c) None None 11740


Example (a)

The Approved Trader receives buy and sell orders at the same time and at price of 11715. The Approved Trader can expose either the buy or the sell order first.

Reason: Both the price of buy and sell orders are better than the prevailing 11710 bid and 11740 offer respectively.

Example (b)

The Approved Trader receives buy and sell orders at the same time and price at 11740. The Approved Trader shall expose the buy order first.

Reason: The buy order is a more attractive order than the sell order because there was an existing 11740 offer waiting to be "lifted".

Example (c)

The Approved Trader receives buy and sell orders at the same time and price at 11715. The Approved Trader shall expose the sell order first.

Reason: The sell order has a more attractive price because the opposite trader who "lifts" the offer will be buying at a price lower than the last traded price of 11740. On the contrary, the buy order has a less attractive price because the opposite trader who "hits" the bid will be selling at a price lower than the last traded price of 11740.

Amended on 25 October 201225 October 2012.