Chapter 9 Settlement

9.1 Mode of Settlement for Trades Cleared by CDP

9.1.1

Unless otherwise specified by SGX-ST, delivery of securities for settlement of trades in securities or deliverable futures contracts that are designated by CDP as eligible for clearing is by book entry at CDP.

Added on 3 June 2019 3 June 2019.

9.1.2

Delivery of physical certificates is not accepted for settlement of trades in securities or deliverable futures contract that are designated by CDP as eligible for clearing.

Added on 3 June 2019 3 June 2019.

9.1.3

A Securities Account must be maintained with CDP by or for customers who trade in securities or deliverable futures contracts that are designated by CDP as eligible for clearing and by or for each Trading Member who trades in such securities or futures contracts for their own account. The Securities Account may be maintained directly with CDP or through a depository agent.

Added on 3 June 2019 3 June 2019.

9.1.4

Unless otherwise agreed between a customer and a Trading Member, trades are settled in the currency of quotation at the exchange rate determined by the Trading Member.

Added on 3 June 2019 3 June 2019.

9.2 Settlement Basis and Eligibility for Clearing by CDP

9.2.1

Unless otherwise stated by SGX-ST and subject to Rule 9.2.2, the Intended Settlement Day and eligibility for clearing of a trade that is executed on the Trading System or reported to SGX-ST is as indicated below:

Market in or for which trade is executed	Intended delivery and settlement day	Eligibility of trade for clearing
Ready market (for securities other than wholesale corporate bonds)	T+2	Eligible for clearing by CDP
Market for Marginable Futures Contracts	LTD+2	Eligible for clearing by CDP
Market for wholesale corporate bonds	T+2	Not eligible for clearing by CDP
Unit share market (for securities other than wholesale corporate bonds)	T+2	Eligible for clearing by CDP
Buying-in market	T+1	Eligible for clearing by CDP

Where T is the date in which the trade is executed and LTD is the Last Trading Day.

Added on 3 June 2019 3 June 2019.

9.2.2

SGX-ST may change the trading period and settlement date.

Added on 3 June 2019 3 June 2019.

9.2.3

If the day indicated in Rule 9.2.1 is a holiday for the foreign currency in which a trade is to be settled, the Intended Settlement Day for that trade will be the next common banking day on which CDP is open for business.

In this Rule, "common banking day" means a day on which (a) Singapore banks and (b) the relevant bank transfer clearing system designated by CDP for the foreign currency are both open for settlement.

Added on 3 June 2019 3 June 2019.

9.3 Mode of Settlement for Trades Not Cleared by CDP

9.3.1

Trades that have not been designated by CDP as eligible for clearing will be settled as agreed between the parties.

Added on 3 June 2019 3 June 2019.

9.4 Relationship Between Trading Member and Selling Customer

9.4.1

A selling customer must look only to its Trading Member, who executes the trade, in relation to all obligations in connection with that trade, including payment of sale proceeds.

Added on 3 June 2019 3 June 2019.

9.4.2

Unless a customer has in place arrangements to settle trades with its Trading Member on a delivery-versus-payment basis through the CDP Settlement Facility, the Trading Member must make payment of the sale proceeds to the selling customer on the banking day after the day that CDP makes payment to the Trading Member, save that the Trading Member may withhold payment until the selling customer has made delivery.

In this Rule, "banking day" means a day on which the bank(s) used by the Trading Member for payment to its customer is(are) open for settlement.

Added on 3 June 2019 3 June 2019.

9.4.3

If a selling customer fails to make securities available on Intended Settlement Day and buying-in is conducted under the Clearing Rules in respect of those securities, the selling customer shall be liable to the Trading Member for any costs or losses incurred by the Trading Member in relation to the buying-in.

Added on 3 June 2019 3 June 2019.

9.5 Relationship Between Trading Member and Clearing Member

9.5.1

This Rule 9.5 applies only to trades that are cleared with CDP.

Added on 3 June 2019 3 June 2019.

9.5.2

A selling Trading Member must look only to its Clearing Member who qualifies it in relation to all obligations in connection with trades that the selling Trading Member executes, including payment of all sale proceeds.

Added on 3 June 2019 3 June 2019.

9.5.3

A buying Trading Member must look only to its Clearing Member who qualifies it in relation to all obligations in connection with trades that the buying Trading Member executes, including delivery of securities or in the case of a deliverable futures contract, the relevant underlying.

Added on 3 June 2019 3 June 2019.

9.5.4

If a selling Trading Member fails to make securities available on Intended Settlement Day and buying-in is conducted under the Clearing Rules in respect of those securities, the selling Trading Member shall be liable to the Clearing Member for any costs incurred by the Clearing Member in relation to the buying-in.

Added on 3 June 2019 3 June 2019.

9.5.5

A buying Trading Member must pay its Clearing Member for its trade as follows:

(a) In the case of a buying Trading Member who has in place arrangements to settle trades with its Clearing Member on a delivery-versus-payment basis through the CDP Settlement Facility, the buying Trading Member must:

(i) submit delivery-versus-payment settlement instructions to CDP in time to make payment for the trade on Intended Settlement Day; and

(ii) make payment for the trade when required by CDP under the CDP Settlement Rules.

(b) In the case of any other buying Trading Member, the buying Trading Member must pay the Clearing Member for its trade on Intended Settlement Day, regardless of whether securities have been delivered.

Added on 3 June 2019 3 June 2019.

9.6 Relationship Between Trading Member and Buying Customer

9.6.1

A buying customer must look only to its Trading Member, who executes the trade, in relation to all obligations in connection with that trade, including delivery of securities or in the case of deliverable futures contracts, the relevant underlying. A buying customer must pay its Trading Member who executes the trade.

Added on 3 June 2019 3 June 2019.

9.6.2

A Trading Member shall, if informed by CDP or its Clearing Member that a right to receive securities pursuant to an Exchange Trade is to be replaced with a right to receive a monetary sum ("Cash Settlement Amount") pursuant to the Clearing Rules, immediately inform the relevant buying customer.

Added on 3 June 2019 3 June 2019.

9.6.3

Unless a buying customer has in place arrangements to settle trades with its Trading Member on a delivery-versus-payment basis through the CDP Settlement Facility, the Trading Member must:

(a) deliver securities to the buying customer on the same day that the securities are delivered by CDP; and.

(b) make payment, of any Cash Settlement Amount, corporate action entitlements or compensation for corporate settlement entitlements pursuant to the Clearing Rules, to the buying customer, on the banking day after the day that CDP makes payment to the Trading Member, save that the Trading Member may withhold delivery of securities or the payment of any Cash Settlement Amount, corporate action entitlements or compensation for corporate action entitlements until payment by the buying customer has been cleared and the proceeds received by the Trading Member.

In this Rule, "banking day" means a day on which the bank(s) used by the Trading Member for payment to its customer is(are) open for settlement.

Added on 3 June 2019 3 June 2019.

9.6.4

A buying customer must pay its Trading Member for its trade as follows:

(a) In the case of a buying customer who has in place arrangements to settle trades with its Trading Member on a delivery-versus-payment basis through the CDP Settlement Facility, the buying customer must:

(i) submit delivery-versus-payment settlement instructions to CDP in time to make payment for the trade on Intended Settlement Day; and

(ii) make payment for the trade when required by CDP under the CDP Settlement Rules.

(b) In the case of any other buying customer, the buying customer must pay the Trading Member for its trade on Intended Settlement Day, regardless of whether securities have been delivered.

Refer to Practice Note 9.6.4(b).

Added on 3 June 2019 3 June 2019.

9.6.5

Subject to Rule 9.6.6, if a buying customer fails to meet any of the timelines in Rule 9.6.4, the Trading Member shall force-sell the securities of the buying customer on the following Market Day.

Added on 3 June 2019 3 June 2019.

9.6.6

If the Trading Member reasonably expects full payment from the buying customer, the Trading Member may defer force-sale for up to two Market Days.

Added on 3 June 2019 3 June 2019.

9.6.7

Rule 9.6.5 does not apply if the Trading Member has allowed the buying customer to effect a corresponding sale position after the purchase but not later than the Intended Settlement Day of the purchase contract.

Added on 3 June 2019 3 June 2019.

9.6.8

A Trading Member exercising its discretion under Rules 9.6.6 and 9.6.7 must not engage in imprudent credit practices.

Added on 3 June 2019 3 June 2019.

9.6.9

The following rules apply to all force-sales by a Trading Member:

(a) The Trading Member has discretion as to the price, and volume put up for sale, at any time;

(b) A Trading Member need not give notice of the force-sale to the buying customer;

(c) A Trading Member is not liable to the buying customer for any loss or damage arising out of the exercise of its discretion; and

(d) A Trading Member may recover the losses and expenses incurred in the force-sale from the buying customer.

Added on 3 June 2019 3 June 2019.