Chapter 5 — Designated Market-Maker

5.1.1

To be eligible for registration as a Designated Market-Maker, an applicant must be a Corporation that is deemed appropriate by SGX-ST.

5.2.1

To become a Designated Market-Maker in respect of Specified Securities, an applicant must apply to SGX-ST in the form SGX-ST prescribes.

5.2.2

SGX-ST may, in its absolute discretion, approve or reject an application to be a Designated Market-Maker. SGX-ST is not obliged to give any reasons.

5.2.3

The approval of a Designated Market-Maker is valid for such period as SGX-ST prescribes.

5.2.4

Without derogating from Rule 5.2.2, SGX-ST may reject an application to be a Designated Market-Maker if:—

(1) the applicant does not provide information relating to the application as SGX-ST requires;

(1A) any information or document that is furnished by the applicant to SGX-ST is false or misleading;

(2) the applicant, its substantial shareholder or head office, is in the course of being wound up, or a resolution to do so is passed by shareholders, or a court order is made, to wind it up, whether in or out of Singapore;

(3) execution against the applicant, its substantial shareholder or head office, in respect of a judgment debt has been returned unsatisfied in whole or in part, whether in or out of Singapore;

(4) the applicant, its substantial shareholder or head office, has entered into an arrangement or composition with its creditors that is still in operation, whether in or out of Singapore;

(5) a receiver, a receiver and manager, judicial manager or such other person having similar powers and duties, has been appointed, whether in or out of Singapore, in relation to any property of the applicant, its substantial shareholders or head office;

(6) SGX-ST is not satisfied with the financial standing of the applicant, its substantial shareholders or head office;

(7) SGX-ST is not satisfied with the manner in which the applicant's business is to be conducted;

(8) the applicant, any of its substantial shareholders or head office breaches any provision involving fraud or dishonesty, whether in or out of Singapore;

(9) the applicant, any of its substantial shareholders or head office has been convicted of an offence under the Securities and Futures Act or any other relevant applicable laws and regulatory requirements relating to the regulation of markets and licenced entities;

(10) the applicant, any of its substantial shareholders or head office is the subject of an investigation involving an allegation of fraud or dishonesty, whether in or out of Singapore;

(11) SGX-ST is not satisfied with the applicant's record of past performance;

(12) SGX-ST is not satisfied that the applicant, any of its substantial shareholders or head office is a fit and proper person;

(13) SGX-ST has reason to believe that the applicant may not perform the functions efficiently, honestly and fairly;

(14) SGX-ST has reason to believe that the applicant may not act in the best interests of its customers;

(15) the applicant, unless exempted, does not procure and maintain the requisite licence(s) with the Authority;

(16) the applicant is not regulated in a jurisdiction with regulatory standards comparable to those contemplated under the Securities and Futures Act and these Rules;

(17) the applicant is not regulated in a jurisdiction where the regulator or supervisory authority has information sharing and co-operation arrangements with the Authority; or

(18) in SGX-ST's opinion, it would be contrary to the interests of the public to register the applicant as a Designated Market-Maker.

Amended on 12 October 2005 12 October 2005 and 19 May 2014 19 May 2014.

5.3 Appeals

5.3.1

If SGX-ST rejects an application to be a Designated Market-Maker, the applicant may, within 14 days after it is notified of SGX-ST's decision, appeal in writing to the SGX RegCo Board whose decision will be final.

Amended on 15 September 2017 15 September 2017.

5.4 Register of Designated Market-Makers

5.4.1

An applicant approved by SGX-ST as a Designated Market-Maker will have its name entered in the Register of Designated Market-Makers. SGX-ST will notify all Designated Market-Makers and Trading Members of the effective date of the Designated Market-Maker's registration.

5.5 Obligations of A Designated Market-Maker

5.5.1 Compliance

A Designated Market-Maker must:—

(1) comply with this Chapter, and any Directives SGX-ST prescribes; and

(2) continue to satisfy the registration criteria.

5.5.2 Proprietary Accounts

A Designated Market-Maker may make a market in Specified Securities for 1 or more of the following:—

(1) its proprietary accounts;

(2) proprietary accounts of its related corporations or Associated Corporations; and

(3) customers if it holds a Capital Markets Services Licence or is exempt under the Securities and Futures Act or Securities and Futures Regulations.

In this Rule, an Associated Corporation means any body corporate formed in or out of Singapore in which the Designated Market-Maker and its related corporations hold directly or indirectly a beneficial interest of not less than 20% of the issued share capital.

Amended on 29 December 2014 29 December 2014.

5.5.3 Bid and Offer Quotations

A Designated Market-Maker must publish on the Trading System competitive bid and offer quotations:—

(1) on a continuous basis or in such manner as SGX-ST prescribes to provide for an adequately liquid market (with suitable disclosure to investors);

(2) within the maximum spread; and

(3) for not less than the minimum quantity that SGX-ST prescribes.

Refer to Directive No. 3.

Amended on 3 April 2008 3 April 2008.

5.5.4 Execution of Trades

If a Designated Market-Maker is not a Trading Member, its trades in any Specified Securities must be routed through a Trading Member.

5.5.5 Market-Making Representative

A Designated Market-Maker must appoint at least 1 person as its market-making representative to receive and execute orders on its behalf. The person must be registered with SGX-ST as a market-making representative.

5.5.6 Periodic Returns

A Designated Market-Maker must submit periodic returns as SGX-ST requires.

5.5.7 Auditors' Report

If asked, a Designated Market-Maker must provide an independent auditors' report to SGX-ST. This is for SGX-ST to review the Designated Market-Maker's performance or suitability as a Designated Market-Maker. The report may relate to the Designated Market-Maker's financial standing, personnel or internal control procedures.

5.5.8 Payment

A Designated Market-Maker must pay all fees, levies and charges SGX-ST prescribes. SGX-ST may reduce or waive any fee, levy or charge.

5.5.9 Notification of Adverse Changes

A Designated Market-Maker shall immediately notify SGX-ST if any of the following occurs, or is likely to occur:

(1) any of the events under Rule 5.2.4; and

(2) the inability of the Designated Market-Maker to satisfy any of its registration criteria and obligations as a Designated Market-Maker under this Rules.

Added on 27 May 2013 27 May 2013.

5.6 Suspension or Restriction of Trades in Specified Security

5.6.1

SGX-ST may suspend or restrict trading in any or all Specified Securities in accordance with Rule 8.10 or Rule 8.11. It may do so for 1 or more markets or 1 or more trading sessions or any part of a trading session.

5.6.2

Specified Securities which have been suspended from trading or subject to a trading halt cease to be traded on the Trading System.

Amended on 3 April 2008 3 April 2008.

5.6.3

Except with SGX-ST's approval, a Designated Market-Maker must not make a market in a Specified Security which is suspended or subject to a trading halt. SGX-ST may specify conditions under which the Designated Market-Maker is permitted to do so.

5.6.4

If SGX-ST imposes restrictions on trades in any Specified Securities, a Designated Market-Maker must not make a market in Specified Securities that will breach the restrictions.

5.7 Suspension and Restriction of Activities

5.7.1

SGX-ST may suspend or restrict the activities of a Designated Market-Maker for such period as SGX-ST specifies if the Designated Market-Maker:—

(1) fails to continue to satisfy the registration criteria;

(2) fails to comply with Rules 5.5, 5.6.3, 5.6.4 or any Directives;

(3) fails to comply with the Rules or any Directives in its capacity as a Trading Member (if applicable);

(4) is suspended in its capacity as a Trading Member (if applicable);

(5) defaults on any trade in Specified Securities or any other securities or futures contracts;

(6) in SGX-ST's opinion, is in financial or operating difficulty;

(7) is suspected of manipulating or distorting the market for a Specified Security or attempting to do so;

(8) is the subject of a written complaint involving an allegation of fraud or dishonesty, whether in or out of Singapore;

(9) is the subject of an investigation involving an allegation of fraud or dishonesty, whether in or out of Singapore; or

(10) engages in conduct detrimental to the financial integrity, reputation or interests of SGX-ST, or markets established or operated by SGX-ST.

Amended on 3 April 2008 3 April 2008 and 8 October 2018 8 October 2018.

5.8 Revocation of Registration

5.8.1

SGX-ST may revoke the registration of a Designated Market-Maker in the circumstances under Rules 5.7.1(1)–(7) or if the Designated Market-Maker:—

(1) breaches any provision involving fraud or dishonesty, whether in or out of Singapore; or

(2) is expelled as a Trading Member as a result of disciplinary proceedings.

5.9 Notification of Action and Appeal

5.9.1

If SGX-ST takes action against a Designated Market-Maker under Rule 5.7.1 or 5.8.1, it will inform the Designated Market-Maker in writing. Such action shall be effective on the date specified in the written notification.

5.9.2

If SGX-ST revokes the registration of a Designated Market-Maker under Rule 5.8.1, the Designated Market-Maker may, within 14 days after it is notified of SGX-ST's decision, appeal in writing to the SGX RegCo Board whose decision will be final.

Amended on 15 September 2017 15 September 2017.

5.10 Disciplinary Proceedings

5.10.1

A failure to comply with Chapter 5, or any applicable Rules or Directives, is a breach and may be subject to disciplinary action.

5.10.2

A Designated Market-Maker and a registered market-making representative are bound by the Supervisory Rules in Chapter 14 of these Rules and must comply with any disciplinary decision as if it were a Trading Member and he or she were a Trading Representative respectively.

Amended on 23 January 2009 23 January 2009.

5.11 Resignation

5.11.1 Procedures

(1) A Designated Market-Maker who intends to resign from making a market for a Specified Security must give at least 30 days' written notice to SGX-ST, stating the proposed date of resignation. SGX-ST may vary or waive the notice period. SGX-ST will notify all Designated Market-Makers and Trading Members of the effective date of resignation.

(2) A Designated Market-Maker must continue to comply with this Chapter, and any Directives as may be imposed by SGX-ST until resignation.

5.11.2 Acceptance of Resignation by SGX-ST

SGX-ST needs not accept the resignation of a Designated Market-Maker if it is:—

(1) conducting an investigation under the Rules, investigating a complaint, or has initiated disciplinary proceedings against the Designated Market-Maker, or

(2) not satisfied that the Designated Market-Maker has fulfilled or is able to fulfill all its obligations to SGX-ST.

5.11.3 Deletion from Register

If SGX-ST accepts a Designated Market-Maker's resignation, the Designated Market-Maker's name will be deleted from the Register of Designated Market-Makers upon the effective date of resignation.

5.12 Obligations of a Former Designated Market-Maker

5.12.1

A former Designated Market-Maker remains liable to SGX-ST and its customers (if applicable) for any liabilities incurred under the Rules or Directives during the period of its registration in respect of a Specified Security. The former Designated Market-Maker also remains subject to disciplinary action for any offence committed during the period of its registration.