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SGX-ST Rules

3.1 Interpretation

3.1.1

Unless otherwise specified or the context requires otherwise, where the terms used in this Chapter are defined in relation to a holder of a Capital Markets Services Licence, such definitions shall, with the necessary modifications, apply to a Trading Member, as they apply to a holder of a Capital Markets Services Licence, whether or not that Trading Member holds a Capital Markets Services Licence.

Added on 3 June 20193 June 2019.

3.2 Base Capital Requirement

3.2.1
(a) A Trading Member that holds a Capital Markets Services Licence shall not cause or permit:
(i) where the Trading Member is incorporated in Singapore, its base capital; or
(ii) where the Trading Member is incorporated outside Singapore, its net head office funds,
to fall below the base capital requirement.
(b) A Remote Trading Member shall not cause or permit its base capital to fall below the base capital requirement specified in this Rule 3.2, or such other base capital requirement as SGX-ST may impose.

Added on 3 June 20193 June 2019.

3.2.2

The base capital requirement of:

(a) a Trading Member (whether concurrently a member of SGX-DT or not) shall be at least S$1 million; and
(b) a Trading Member that is also a member of CDP shall be at least S$5 million.

Added on 3 June 20193 June 2019.

3.2.3

If a Trading Member fails to comply or becomes aware that it will fail to comply with the base capital requirement prescribed under Rule 3.2, or such other base capital requirement as SGX-ST may have imposed, it shall immediately notify SGX-ST.

Added on 3 June 20193 June 2019.

3.2.4

It shall be a breach of the Rules by the Trading Member if the base capital, or as the case may be, net head office funds fall(s) below such base capital requirement, whether or not the Trading Member makes or has made the notification specified in Rule 3.2.3.

Added on 3 June 20193 June 2019.

3.3 Financial Resources Requirement

3.3.1

This Rule applies only to Trading Members that hold a Capital Markets Services Licence.

Added on 3 June 20193 June 2019.

3.3.2

A Trading Member shall not cause or permit:

(a) where it is incorporated in Singapore, its financial resources; or
(b) where it is incorporated outside Singapore, its adjusted net head office funds,

to fall below its total risk requirement.

Added on 3 June 20193 June 2019.

3.3.3

In the Rules, financial resources, adjusted net head office funds and total risk requirement shall be computed in the same manner as prescribed in the SFR (Financial and Margin Requirements), read together with the RBC Notice.

Added on 3 June 20193 June 2019.

3.3.4

It shall be a breach of the Rules by the Trading Member if its financial resources, or as the case may be, adjusted net head office funds falls below its total risk requirement, whether or not the Trading Member makes or has made the notification specified in Rule 3.3.5.

Added on 3 June 20193 June 2019.

3.3.5

Notification of Failure to Comply with Rule 3.3

If a Trading Member fails to comply or becomes aware that it will fail to comply with the financial resources requirement prescribed under this Rule 3.3, or such other financial resources requirement as SGX-ST may impose, it shall immediately notify SGX-ST.

Added on 3 June 20193 June 2019.

3.3.6

First warning of impending failure to comply with Rule 3.3

A Trading Member shall immediately notify SGX-ST if:

(a) in the case where the Trading Member is incorporated in Singapore, its financial resources; or
(b) in the case where the Trading Member is incorporated outside Singapore, its adjusted net head office funds,

fall below 150% of its total risk requirement or such other percentage as SGX-ST may impose.

Added on 3 June 20193 June 2019.

3.3.7

If SGX-ST is notified by a Trading Member under Rule 3.3.6 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 3.3.6) that the Trading Member's financial resources or adjusted net head office funds, as the case may be, have fallen or will fall below 150% of its total risk requirement, or such other percentage as SGX-ST may impose, SGX-ST shall be entitled to require the Trading Member to:

(a) submit the statements of assets and liabilities, financial resources, total risk requirement, aggregate indebtedness, and such other statements as required by SGX-ST at such interval and for such time frame as determined by SGX-ST; and
(b) operate its business in such manner and on such conditions as SGX-ST may impose.

Added on 3 June 20193 June 2019.

3.3.8

Second Warning of Impending Failure to Comply with Rule 3.3

A Trading Member shall immediately notify SGX-ST if:

(a) in the case where the Trading Member is incorporated in Singapore, its financial resources; or
(b) in the case where the Trading Member is incorporated outside Singapore, its adjusted net head office funds,

fall below 120% of its total risk requirement or such other percentage as SGX-ST may impose.

Added on 3 June 20193 June 2019.

3.3.9

If SGX-ST is notified by a Trading Member under Rule 3.3.8 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 3.3.8) that the Trading Member's financial resources or adjusted net head office funds, as the case may be, have fallen or will fall below 120% of its total risk requirement, or such other percentage as SGX-ST may impose, SGX-ST shall be entitled to require the Trading Member to comply with any or all of the directions prescribed under Regulation 7(3) of the SFR (Financial and Margin Requirements).

Added on 3 June 20193 June 2019.

3.4 Aggregate Indebtedness Requirement

3.4.1

This Rule applies only to Trading Members that hold a Capital Markets Services Licence.

Added on 3 June 20193 June 2019.

3.4.2

A Trading Member shall not cause or permit its aggregate indebtedness to exceed 1,200% of its aggregate resources, or such other aggregate indebtedness requirement as SGX-ST may impose. It shall be a breach of the Rules by the Trading Member if its aggregated indebtedness exceed(s) such prescribed percentage of its aggregate resources, whether or not the Trading Member makes or has made the notification specified in Rule 3.4.3.

Added on 3 June 20193 June 2019.

3.4.3

Notification of Failure to Comply with Rule 3.4

If a Trading Member fails to comply or becomes aware that it will fail to comply with the aggregate indebtedness requirement prescribed under Rule 3.4, or such other percentage of aggregate indebtedness over aggregate resources as SGX-ST may impose, it shall immediately notify SGX-ST.

Added on 3 June 20193 June 2019.

3.4.4

Early Warning of Impending Failure to Comply with Rule 3.4

A Trading Member shall immediately notify SGX-ST if its aggregate indebtedness exceeds 600% of its aggregate resources or such other percentage as SGX-ST may impose.

Added on 3 June 20193 June 2019.

3.4.5

If SGX-ST is notified by a Trading Member under Rule 3.4.4 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 3.4.4) that the Trading Member's aggregate indebtedness has exceeded or will exceed 600% of its aggregate resources, or such other percentage as SGX-ST may impose, SGX-ST shall be entitled to require the Trading Member to comply with any or all of the directions prescribed under Regulation 17(2) of the SFR (Financial and Margin Requirements).

Added on 3 June 20193 June 2019.

3.4.6

Qualifying Letter of Credit

(a) For the purpose of Rule 3.4, a Trading Member may include one or more qualifying letter(s) of credit in its calculation of aggregate resources, except that where the total amount payable under the qualifying letter(s) of credit exceeds 50% of the Trading Member's total risk requirement, the amount in excess shall not be taken into account for determining the Trading Member's aggregate resources.
(b) For the purpose of Rule 3.4.6(a), a qualifying letter of credit is a legally enforceable and irrevocable letter of credit that is:
(i) in the case of a Trading Member that is not a Clearing Member, made in favour of SGX-ST;
(ii) in the case of a Trading Member that is also a Clearing Member, made in favour of CDP; and
(iii) issued by a bank approved by, and in a form acceptable to SGX-ST or CDP, as the case may be,
but does not include any letters of credit provided by a Clearing Member to satisfy Rule 7 of the Clearing Rules or any other requirement imposed by CDP.
(c) SGX-ST shall reserve the right to call on any of the qualifying letter(s) of credit made in favour of SGX-ST pursuant to Rule 3.4.6 and apply the proceeds thereof in respect of the Trading Member's default to SGX-ST.

Added on 3 June 20193 June 2019.

3.5 Powers to Impose Other Requirements

3.5.1

SGX-ST may at its absolute discretion prescribe for any specific Trading Member, or one or more Trading Members, capital, financial and other requirements in excess of the minimum prescribed in this Chapter 3 based on such criteria as SGX-ST may determine at its absolute discretion, including but without limitation, volume, risk exposure of positions carried, risk concentration, margin policies and/or nature of business conducted or to be conducted or its membership in any exchange or organised market.

Added on 3 June 20193 June 2019.

3.6 Exposure to Single Customer

3.6.1

This Rule applies only to Trading Members that hold a Capital Markets Services Licence.

Added on 3 June 20193 June 2019.

3.6.2

A Trading Member shall immediately notify SGX-ST if the Trading Member's exposure to a single customer exceeds 20% of its average aggregate resources. To reduce the Trading Member's risk exposure to a single customer, SGX-ST shall have the right to impose on the Trading Member such risk management measures as it deems necessary.

Added on 3 June 20193 June 2019.

3.6.3

The full amount of the qualifying letter(s) of credit or any part thereof deposited pursuant to Rule 3.4.6 may be taken into account for the calculation of aggregate resources under this Rule.

Added on 3 June 20193 June 2019.

3.6.4

"Exposure to a single customer" means the sum of the following:

(a) in the case of securities carried in a customer's account (other than a margin financing account operated under Rule 3.10) carried on the books of a Trading Member:
(i) for purchase contracts that remain unpaid:
(I) where the securities purchased have not been delivered to the customer, the excess of the contracted price of the securities purchased by the single customer over the aggregate market value of the securities purchased and such other collateral, as prescribed by SGX-ST, that is held by the Trading Member less any amount due and payable by the Trading Member to him; and
(II) where the securities purchased have been delivered to the customer, the excess of the contracted price of the securities purchased by the single customer over the aggregate market value of all his collateral, as prescribed by SGX-ST, that is held by the Trading Member less any amount due and payable by the Trading Member to him;
(ii) for sale contracts for which delivery has not been made, the excess of the amount of the market value of the securities sold by the single customer over the aggregate of the market value of any of his collateral, as prescribed by SGX-ST, that is held by the Trading Member and the contracted sale price less any amount due and payable by the Trading Member to him;
(iii) where the contracts referred to in Rule 3.6.4(a)(i) or (ii) have been offset by a transaction on or before the due date, the exposure shall not include those amounts specified in Rule 3.6.4(a)(i) or (ii) in respect of such contracts but shall instead include the amount of the loss, if any, arising from the offsetting transaction, on the date on which the offsetting transaction takes effect; and
(iv) where the contracts referred to in Rule 3.6.4(a)(i) or (ii) have been offset by a force-sale or buying-in transaction after the due date, the exposure shall not include those amounts specified in Rule 3.6.4(a)(i) or (ii) in respect of such contracts but shall instead include the amount of the loss, if any, arising from the force-sale or buying-in transaction, on the date on which the transaction takes effect;
(b) the amount of margin deficiency in the single customer's margin financing account carried on the books of the Trading Member as determined in accordance with the margin requirements specified by SGX-ST;
(c) the amount of margin deficiency in the single customer's options margin account carried on the books of the Trading Member as determined in accordance with the option margin requirements specified by SGX-ST;
(d) the excess of the amount owed by the single customer in his options trading account carried on the books of the Trading Member over the market value of options held;
(e) the amount of any unsecured interest owed by the single customer;
(f) the amount of any unsecured loan, advance and credit facility granted to the single customer;
(g) where the Trading Member has lent securities to the single customer or is acting as guarantor for the return of securities lent to the single customer, the excess of the amount of the market value of the securities lent to the single customer over the amount of the market value of collateral and cash deposited by the single customer;
(h) where the Trading Member has deposited collateral with the single customer in respect of securities lent by the single customer or is acting as guarantor for the return of collateral deposited with the single customer in respect of any securities lent by him, the excess of the amount of the market value of collateral and cash deposited with the single customer over the amount of the market value of the securities lent by him; and
(i) the amount of deficiency in relation to margins required in any account of the single customer carried on the books of the Trading Member as determined in accordance with the margin requirements prescribed by the relevant exchange, clearing house or other such relevant financial institution.

Added on 3 June 20193 June 2019.

3.6.5

For the purposes of this Rule, a security or futures contract is deemed to be carried in a customer's account (other than a margin financing 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 futures contract or on the exercise date specified in the exercise notice in respect of an option in that security that has been exercised.

Added on 3 June 20193 June 2019.

3.6.6

"Single customer" in relation to a customer who is:

(a) a person, means that person and such group of persons who the first-mentioned person is able to control or influence;
(b) a Corporation, means that Corporation and any other Corporation or group of Corporations that is related, as specified in the Companies Act, to the first-mentioned Corporation; or
(c) a person, means that person and:
(i) any Corporation whose issued share capital is 50% or more owned by those persons mentioned in Rule 3.6.6(a) or any other Corporation or group of Corporations that is related, as specified in the Companies Act to the first-mentioned Corporation; or
(ii) any Corporation whose composition of board of directors is controlled by those persons mentioned in Rule 3.6.6(a); and for this purpose the composition of the board of directors shall be deemed to be controlled by those persons, if they, by the exercise of some power exercisable by them without the consent or concurrence or any other person, can appoint or remove all or a majority of the directors of that Corporation,

but shall not include the Trading Member itself.

Added on 3 June 20193 June 2019.

3.7 Remote Trading Member: Exposure to Single Customer

3.7.1

A Remote Trading Member shall set appropriate thresholds to monitor its exposure to a single customer.

Added on 3 June 20193 June 2019.

3.7.2

The Remote Trading Member shall immediately notify SGX-ST if its exposure to a single customer exceeds its internal threshold.

Added on 3 June 20193 June 2019.

3.7.3

For the purposes of this Rule, "single customer" and "exposure to a single customer" shall have the meaning ascribed to it in Rule 3.6.

Refer to Practice Note 3.7 and 3.9.

Added on 3 June 20193 June 2019.

3.8 Exposure to Single Security

3.8.1

This Rule applies only to Trading Members that hold a Capital Markets Services Licence.

Added on 3 June 20193 June 2019.

3.8.2

A Trading Member shall immediately notify SGX-ST of its exposure to a single security:

(a) in the case where the security is quoted on SGX-ST or any recognised group A securities exchange, if its exposure to that security (whether in relation to the quantity that is already quoted or to the quantity that is approved for quotation but not yet quoted), exceeds 300% of its average aggregate resources;
(b) in all other cases where the security is quoted, if its exposure to that security exceeds 100% of its average aggregate resources;
(c) 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, if its exposure to that security:
(i) exceeds 100% of its average aggregate resources if its aggregate resources is less than S$75 million; or
(ii) exceeds 150% of the average aggregate resources of the Trading Member if its aggregate resources is S$75 million or more;
(d) in the case where the security is not quoted, and not approved for quotation on SGX-ST or any recognised group A securities exchange, if its exposure to that security exceeds 10% of its average aggregate resources. This notification requirement does not apply to any security issued by:
(i) any subsidiary of the Trading Member that is established solely for the purpose of providing research, nominee, custodian or trustee services; or
(ii) any other company that SGX-ST may approve.

Added on 3 June 20193 June 2019.

3.8.3

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.

Added on 3 June 20193 June 2019.

3.8.4

The full amount of the qualifying letter(s) of credit or any part thereof deposited pursuant to Rule 3.4.6 may be taken into account for the calculation of aggregate resources under this Rule.

Added on 3 June 20193 June 2019.

3.8.5

"Exposure to a single security" means the sum of the following:

(a) the amount of the single security underwritten or sub-underwritten by or placed with a Trading Member, after deducting the amount that the Trading Member has sub-underwritten or placed with:
(i) a bank licensed under the Banking Act 1970;
(ii) a merchant bank approved as a financial institution under the Monetary Authority of Singapore Act 1970;
(iii) a finance company licensed under the Finance Companies Act 1967;
(iv) a company or co-operative society that is licensed under the Insurance Act 1966 to carry on insurance business as an insurer;
(v) the holder of a Capital Markets Services Licence under the Securities and Futures Act for dealing in capital markets products or for fund management;
(vi) a financial institution outside Singapore that 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
(vii) 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;
(b) 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;
(c) 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:
(i) the book value of options bought for the account;
(ii) the excess of the market value of the underlying securities over the exercise price of uncovered call options written for the account; and
(iii) the excess of the exercise price of put options written for a Trading Member's own account over the market value of the underlying securities;
(d) 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 security has not been delivered, whichever is the higher;
(e) for outstanding options in the single security carried in a customer's options trading account carried on the books of the Trading Member:
(i) the contract value of the options bought by the customer to the extent that such amounts have not been paid for;
(ii) the excess of the market value of the underlying securities over the exercise price of uncovered call options written by the customer; and
(iii) the excess of the exercise price of put options written by the customer over the market value of the underlying securities;
(f) the net amount of the single security borrowed or lent, as the case may be, by a Trading Member;
(g) 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;
(h) the amount of interest receivable secured by the single security;
(i) the amount of loans and advances secured by the single security; and
(j) 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 that is approved for quotation on SGX-ST or any recognised group A securities exchange but has not, as yet, been so quoted;

and shall not include exposure arising from a Trading Member's arbitrage transactions.

Added on 3 June 20193 June 2019 and amended on 18 January 2022.

3.8.6

For the purposes of this Rule:

(a) 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 that has been exercised;
(b) "security" does not include any security issued by the Singapore government or any public authority in Singapore;
(c) in calculating exposure to any particular security, all outstanding options exercisable into that security shall be included in such computation;
(d) in calculating exposure in any particular security under Rule 3.8.5(b) and Rule 3.8.5(d), all futures contacts with that security as an underlying shall be included in such computation.

Added on 3 June 20193 June 2019.

3.8.7

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 30th consecutive day of suspension until such time that the suspension has been lifted.

Added on 3 June 20193 June 2019.

3.9 Remote Trading Members: Exposure to Single Security

3.9.1

A Remote Trading Member shall set appropriate thresholds to monitor its exposure to a single security.

Added on 3 June 20193 June 2019.

3.9.2

The Remote Trading Member shall immediately notify SGX-ST if its exposure to a single security exceeds its internal threshold.

Added on 3 June 20193 June 2019.

3.9.3

For the purposes of this Rule, "single security" and "exposure to a single security" shall have the meaning ascribed to it in Rule 3.8.

Refer to Practice Note 3.7 and 3.9.

Added on 3 June 20193 June 2019.

3.10 Margin Financing

3.10.1

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.

Added on 3 June 20193 June 2019.

3.10.2

SGX-ST may exempt a Remote Trading Member from compliance with Rules 3.10.3 to 3.10.16, subject to any other requirements that SGX-ST may impose, if SGX-ST is of the view that the Remote Trading Member is subject to requirements of its Relevant Regulatory Authority that are comparable to the requirements in those Rules.

Added on 3 June 20193 June 2019.

3.10.3

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

Added on 3 June 20193 June 2019.

3.10.4

If a Trading Member seeks to mortgage, charge, pledge or hypothecate the assets of any customer who operates a margin financing account (such account being an account carried on the books of the Trading Member) with it, it shall:

  1. do so only in respect of a sum not exceeding the amount owed by the customer to the Trading Member and without obligation to retain in its possession or control assets of like character;
  2. ensure that it is given the discretion to sell or dispose of the assets in any manner in order to meet with the prescribed margin financing requirements; and
  3. before mortgaging, charging, pledging or hypothecating a retail customer’s assets:
    1. inform the retail customer that the Trading Member may mortgage, charge, pledge or hypothecate the retail customer’s assets but only for a sum not exceeding the amount owed by the customer to the Trading Member;
    2. explain to the retail customer the risks of mortgaging, charging, pledging or hypothecating the retail customer’s assets; and
    3. obtain the retail customer’s written consent to mortgage, charge, pledge or hypothecate the retail customer’s assets.

Added on 3 June 20193 June 2019 and amended on 1 April 2025.

3.10.4A

A Trading Member must not, in relation to any assets or monies received from a retail customer, enter into any contract, arrangement or transaction of which the purpose or effect is to transfer any right, interest, benefit or title in those assets or monies to itself or any other person, unless:

  1. in the case of assets, the contract, arrangement or transaction is entered into in connection with borrowing or lending of the retail customer’s Specified Products;
  2. in the case of monies, the contract, arrangement or transaction is entered into in connection with lending of the retail customer’s Specified Products; and
  3. the Trading Member complies with the relevant laws in relation to the borrowing or lending (as the case may be) of the retail customer’s Specified Products.

Added on 1 April 2025

3.10.5

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.

Added on 3 June 20193 June 2019.

3.10.6 [Rule has been deleted.]

Added on 3 June 20193 June 2019 and deleted on 1 April 2025.

3.10.7
  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 be 110% of the debit balance in the customer’s margin financing account or less.
  2. Where the equity in a customer’s margin financing account is 110% of the debit balance in his margin financing account or less, the Trading Member:
    1. shall immediately require the customer to provide additional margin in the margin financing account within two Market Days from the date of the 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; and
    2. shall not cause or permit any new transaction to be made in the customer’s margin financing account, unless such new transaction will increase the percentage of equity over debit balance in the customer’s margin financing account.

Added on 3 June 20193 June 2019 and amended on 1 April 2025.

3.10.8

Where the customer fails to provide additional margin as required by the Trading Member under Rule 3.10.7, the Trading Member shall have the discretion to take such action as it may deem appropriate, including, liquidating the Specified Products purchased via the margin financing account and/or liquidating all or any acceptable collateral deposited to bring the equity to more than 110% of the debit balance without notice to the customer.

Added on 3 June 20193 June 2019.

3.10.9

A Trading Member shall review all margin financing accounts carried on the books of the Trading Member daily to ensure that credit is not over-extended beyond the approved facility limits and that the margin financing requirements and limits prescribed in this Rule 3.10 are met at all times. The Trading Member shall establish and maintain a robust framework to govern the conduct of such reviews.

Refer to Practice Note 3.10.

Added on 3 June 20193 June 2019 and amended on 1 April 2025.

3.10.10

A Trading Member shall have the discretion to impose higher margin financing requirements on any of its customers and/or to prescribe more stringent provisions on its customers than the provisions of this Rule 3.10.

Added on 3 June 20193 June 2019.

3.10.11

A customer may withdraw cash or assets from his margin financing account carried on the books of the Trading Member provided that:

  1. such withdrawal does not cause the equity in his account to fall to 110% of the debit balance or less; and
  2. the amount of cash withdrawn does not exceed the amount of cash balance held in his margin financing account at the point of withdrawal.

Added on 3 June 20193 June 2019 and amended on 1 April 2025.

3.10.12

A Trading Member shall not cause or permit:

(a) 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;
(b) 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
(c) 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.

Added on 3 June 20193 June 2019.

3.10.13

All transactions in a margin financing account carried on the books of the Trading Member shall be on a ready basis. The margin financing account shall not be used to meet margin requirements in respect of Marginable Futures Contracts.

Added on 3 June 20193 June 2019.

3.10.14

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 acceptable collateral, the Trading Member shall apply such applicable haircuts as SGX-ST may prescribe from time to time.

Added on 3 June 20193 June 2019.

3.10.15

SGX-ST shall have the absolute discretion upon notice to the Trading Members to vary any or all of the margin financing requirements stipulated in this Rule 3.11 or any of the haircuts in Rule 3.10.14, and impose such other requirements for margin financing transactions from time to time as it deems fit and appropriate.

Added on 3 June 20193 June 2019.

3.10.16

For the purposes of this Rule 3.10, the terms:

  1. "acceptable collateral", "debit balance", "equity", "free financial resources" and "margin exposure" each has the meaning ascribed to them in Regulation 24(6) of the SFR (Financial and Margin Requirements);
  2. “assets” in relation to a customer has the meaning ascribed to “customer’s assets” in Regulation 15 of the SFR (Licensing and Conduct of Business);
  3. “cash balance" includes unutilised cash deposits, and cash from sales proceeds or corporate action events; and
  4. “retail customer” has the meaning ascribed to it in Regulation 2 of the SFR (Licensing and Conduct of Business).

Added on 3 June 20193 June 2019 and amended on 1 April 2025.

3.11 Borrowing and Lending of Specified Products

3.11.1

This Rule shall not apply to Remote Trading Members, who shall instead comply with such requirements established by the Relevant Regulatory Authority and any additional requirements that may be imposed by SGX-ST, and observe the principles of good business practice, in relation to the areas set out in this Rule.

Added on 3 June 20193 June 2019.

3.11.2

Before engaging in borrowing or lending transactions in Specified Products, a Trading Member must enter into a written agreement with the borrower or lender in accordance with Regulation 45(4) or, if the Trading Member borrows Specified Products from an Accredited Investor, Expert Investor or Institutional Investor, in accordance with Regulation 45(6) of the SFR (Licensing and Conduct of Business). Such agreement shall also provide for the matters set out in Rule 3.11.3.

Added on 3 June 20193 June 2019.

3.11.3

Collateral

(a) Where a Trading Member lends Specified Products to any person, it must obtain collateral in accordance with this Rule 3.11.3.
(b) A Trading Member must obtain collateral from a borrower of Specified Products by the close of the Market Day before delivering the loaned Specified Products to the borrower.
(c) The collateral must be in the form as specified in Regulation 45(9) of the SFR (Licensing and Conduct of Business).
(d) The value of collateral obtained by the Trading Member from the borrower must be at least 105% of the market value of the loaned Specified Products throughout the period that the Specified Products are lent. For the purpose of this Rule 3.11.3, "market value" shall have the same meaning as set out in Regulation 45(9) of the SFR (Licensing and Conduct of Business).
(e) If the value of collateral falls below 105% of the market value of the loaned Specified Products, a Trading Member must, by the next Market Day, notify the borrower to provide additional collateral to bring the value of collateral to at least 105% of the market value of the loaned Specified Products by the close of the second Market Day from the date of notice. A Trading Member must not allow any new borrowings until the value of the collateral is restored to at least 105% of the market value of the loaned Specified Products.
(f) A Trading Member may, without notice to the borrower, realise the collateral and apply the proceeds to buy back Specified Products to close off the loan position if:
(i) the borrower does not provide the additional collateral by the close of the second Market Day from the date of notice; or
(ii) the collateral value falls below 100% of the market value of the loaned Specified Products,
whichever occurs earlier.
(g) A Trading Member may allow a borrower to withdraw collateral, provided that the remaining collateral value is at least 105% of the market value of the loaned Specified Products after the withdrawal.
(h) SGX-ST may vary the percentages set out in this Rule 3.11.3 and/or specify the haircuts to be applied by Trading Members to the value of collateral.
(i) A Trading Member may require additional collateral from the borrower over and above the requirements set out in this Rule 3.11.3.
(j) A Trading Member may apply haircuts to the value of the collateral that are higher than any specified by SGX-ST.

Added on 3 June 20193 June 2019.

3.12 Submission of Returns

3.12.1

A Trading Member shall submit to SGX-ST such financial returns and statements, each in the format and by the time specified by SGX-ST, as SGX-ST may from time to time require, including but not limited to the following:

(a) in the case of a Trading Member that holds a Capital Markets Services Licence, submit by the 14th calendar day of each month statements of assets and liabilities, base capital, financial resources, total risk requirement, aggregate indebtedness, profit and loss, exposures to a single security and a single customer and margin exposure; and
(b) in the case of a Remote Trading Member, submit by such time specified by SGX-ST financial returns based on such computation methodology and in the form prescribed by SGX-ST.

Refer to SGX Data Submission Website (https://esub.sgx.com) for the submission template.

Added on 3 June 20193 June 2019.

3.12.2

There shall be imposed upon the Trading Member a late fee of S$100 for each day that the statements are not submitted after the prescribed time or such extended time as SGX-ST may grant.

Added on 3 June 20193 June 2019.

3.12.3

Requests for extension of time shall be submitted to SGX-ST at least three Market Days prior to the due date for submission of the statements.

Added on 3 June 20193 June 2019.

3.12.4

A Trading Member shall be required to resubmit the statements and documents prescribed under Rule 3.12.1 and take such other steps as SGX-ST may require if the statements and documents are inaccurate or incomplete.

Added on 3 June 20193 June 2019.

3.13 Annual Financial Audit

3.13.1

A Trading Member shall:

(a) in the case of a Trading Member that holds a Capital Markets Services Licence, obtain the written approval of SGX-ST in the event of any change of its existing external auditor; and
(b) in the case of a Remote Trading Member, notify SGX-ST at least seven days prior to any change of its existing external auditor. The Remote Trading Member shall appoint external auditors that are accepted by its Relevant Regulatory Authority.

Added on 3 June 20193 June 2019.

3.13.2

If SGX-ST is not satisfied with the performance of duties by an external auditor appointed by a Trading Member in relation to the Trading Member's activities on SGX-ST, it may:

(a) at any time direct the Trading Member to remove the external auditor; and
(b) direct the Trading Member, as soon as practicable thereafter, to appoint another external auditor.

Added on 3 June 20193 June 2019.

3.13.3

A Trading Member shall, within five months after the close of the financial year, furnish to SGX-ST the following information:

(a) relevant forms in respect of its annual financial audit that the Trading Member is required to lodge with its Relevant Regulatory Authority, translated into English (if necessary), and as prescribed by SGX-ST. In the case of a Trading Member that holds a Capital Markets Services Licence, the forms shall be in the prescribed format under Regulation 27(9) of the SFR (Financial and Margin Requirements);
(b) audited accounts of the Trading Member and its subsidiaries;
(c) a certificate in respect of its annual financial audit signed by the auditor appointed by the Trading Member to carry out such audit and stating in such form prescribed the Relevant Regulatory Authority.

Added on 3 June 20193 June 2019.

3.13.4

Where, in the performance of his duties, the Trading Member's auditor becomes aware:

(a) of any matter that in his opinion adversely affects or may adversely affect the financial position of the Trading Member to a material extent;
(b) of any matter that in his opinion constitute or may constitute a breach of the Securities and Futures Act, or any other relevant applicable laws and regulatory requirements relating to the regulation of organised markets and licenced entities, or an offence involving fraud or dishonesty;
(c) of any irregularity that has or may have a material effect upon the accounts, including irregularities that jeopardise the monies or other assets of any customer of the Trading Member; or
(d) that the accounting system, internal accounting control and procedures for safeguarding monies or other assets are inadequate and the inadequacies have a material effect on the accounts,

the auditor shall, and the Trading Member shall procure that the auditor shall, immediately report the matter to SGX-ST.

Added on 3 June 20193 June 2019.

3.13.5

A fee of S$200 may be imposed for each day that the statements are not submitted after the prescribed time or such extended time as SGX-ST may grant.

Added on 3 June 20193 June 2019.

3.13.6

Requests for extension of time shall be submitted to SGX-ST at least three Market Days prior to the due date.

Added on 3 June 20193 June 2019.

3.14 Provision in Annual Accounts

3.14.1

A Trading Member that is incorporated in Singapore shall make such provisions in its annual accounts as SGX-ST may from time to time require.

Added on 3 June 20193 June 2019.

3.15 Other Financial Requirements

3.15.1

Rules 3.15.2 to 3.15.5 shall not apply to a Remote Trading Member.

Added on 3 June 20193 June 2019.

3.15.2

A Trading Member that is incorporated in Singapore shall not reduce its paid-up ordinary share capital or paid-up irredeemable and non-cumulative preference share capital without the prior written approval of SGX-ST.

Added on 3 June 20193 June 2019.

3.15.3

Preference Shares

(a) A Trading Member that is incorporated in Singapore shall notify SGX-ST prior to the issue of any preference share.
(b) A Trading Member that is incorporated in Singapore shall not repay the principal of any preference share (other than any paid-up irredeemable and non-cumulative preference share capital) that is computed as part of its financial resources, through repurchase or redemption:
(i) unless the Trading Member notifies SGX-ST within such time before the proposed date of repurchase or redemption as prescribed by the SFR (Financial and Margin Requirements);
(ii) if at the date of repurchase or redemption:
(I) its financial resources is less than 150% of its total risk requirement; or
(II) its aggregate indebtedness exceeds 600% of its aggregate resources;
(iii) if such repurchase or redemption will cause an event in Rule 3.15.3(b)(ii) above to occur; or
(iv) if SGX-ST has prohibited in writing such a repurchase or redemption.

Added on 3 June 20193 June 2019.

3.15.4

Qualifying Subordinated Loan

(a) A Trading Member shall obtain the prior approval of SGX-ST if it enters a subordinated loan agreement in a format other than the format prescribed by SGX-ST from time to time.
(b) Where a Trading Member draws down a qualifying subordinated loan, the Trading Member shall notify SGX-ST no later than the date of draw down of the qualifying subordinated loan.
(c) A Trading Member shall not repay, whether in part or in full, any subordinated loan principal before the maturity date without the prior approval of SGX-ST.
(d) A Trading Member shall not repay, whether in part or in full, any subordinated loan principal that has matured:
(i) unless the Trading Member notifies SGX-ST at least one Market Day before the date of repayment;
(ii) if its financial resources is less than 150% of its total risk requirement;
(iii) if its aggregate indebtedness exceeds 600% of its aggregate resources;
(iv) if such a repayment will cause an event in Rule 3.15.4(d)(ii) or (iii) to occur; or
(v) if SGX-ST has prohibited in writing such a repayment.

Added on 3 June 20193 June 2019.

3.15.5

A Trading Member shall not, without the prior written approval of SGX-ST, make any unsecured loan or advance, pay any dividend or director's fees or increase any director's remuneration if:

(a) in the case where the Trading Member is incorporated in Singapore:
(i) its base capital is less than the base capital requirement as prescribed in Rules 3.2 and 3.5;
(ii) its financial resources is less than 150% of its total risk requirement;
(iii) its aggregate indebtedness exceeds 600% of its aggregate resources; or
(iv) such a loan, advance, payment or increase will cause an event in Rule 3.15.5(a)(i), (ii) or (iii) to occur; or
(b) in the case where the Trading Member is incorporated outside Singapore:
(i) its net head office funds is less than the base capital requirement as prescribed in Rules 3.2 and 3.5;
(ii) its adjusted net head office funds is less than 150% of its total risk requirement;
(iii) its aggregate indebtedness exceeds 600% of its aggregate resources; or
(iv) such a loan, advance, payment or increase will cause an event in Rule 3.15.5(b)(i), or (iii) to occur.

Added on 3 June 20193 June 2019.

3.15.6

A Remote Trading Member shall notify SGX-ST immediately of any actions taken relating to:

(a) any reduction in paid-up ordinary share capital;
(b) any issue of any preference share;
(c) the entry into a subordinated loan agreement in a format other than the format prescribed by SGX-ST from time to time, drawing down on a qualifying subordinated loan or repayment whether in part or in full, any subordinated loan principal before or upon maturity;
(d) any matter that has or may have a financial or capital impact on the Remote Trading Member and is or may be required to be reported to the Relevant Regulatory Authority.

Added on 3 June 20193 June 2019.

3.15.7

A Trading Member that holds a Capital Markets Services Licence must not issue or allot partly paid shares.

Added on 3 June 20193 June 2019.