Whole Section

  • Section D — Regulatory Framework

    • Chapter 11 — Capital and Financial Requirements

      • 11.1 Definitions and Interpretation

        Amended on 29 December 201429 December 2014.

        • 11.1.1

          In this Chapter,

          A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z

          Term Meaning
          A
          "Adjusted net head office funds" has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).
          "Aggregate indebtedness" has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).
          "Aggregate resources" means
          (1) in the case of a Trading Member incorporated in Singapore, its financial resources and qualifying letters of credit referred to in Rule 11.4.6 less its total risk requirement; and
          (2) in the case of a Trading Member incorporated outside Singapore that holds a capital markets services licence, its adjusted net head office funds and qualifying letters of credit referred to in Rule 11.4.6 less its total risk requirement.
          "Average aggregate resources" means the average of the aggregate resources on the last day of each of the three months preceding the previous month.
          B
          "Base capital"
          (1) in the case of a Trading Member that holds a Capital Markets Services Licence, has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).
          (2) in the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), the sum of its paid-up ordinary share capital and unappropriated profit or loss;
          C
          "Capital Markets Services Licence" has the meaning ascribed to it in the SFA.
          "Counterparty risk requirement" has the meaning ascribed to it in the Notice on Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licences.
          E
          "Exchange" means SGX-ST or any other market or organisation (whether an exchange, association, body corporate or unincorporated or otherwise) responsible for administering a market in securities, commodities, options, derivatives or any other financial instrument whose contracts are cleared by, or novated to CDP.
          F
          "Financial resources" has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).
          I
          "Irredeemable and Non-Cumulative Preference Share Capital" has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).
          N
          "Net head office funds" has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).
          [Deleted] [Deleted]
          O
          "Operational risk requirement" has the meaning ascribed to it in the Notice on Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licences.
          Q
          "Qualifying Letter of Credit" has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).
          "Qualifying subordinated loan" has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).
          R
          "Recognised group A securities exchange" means an overseas securities exchange regulated by a financial services regulatory authority of a country or territory specified in Table 4 of Fourth Schedule of the SFR (Financial and Margin Requirements).
          S
          [deleted] [deleted]
          "SFA" means the Securities and Futures Act (Cap. 289) or any subsidiary legislation promulgated under it or any statutory modification, amendment or re-enactment thereof for the time being in force, or any act or subsidiary legislation which may replace the SFA, and any reference to any provision of the SFA is to that provision as so modified, amended or re-enacted (or as contained in any subsequent act or legislation which may replace the SFA).
          "SFR (Financial and Margin Requirements)" means the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations or any statutory modification, amendment or re-enactment thereof for the time being in force, or any regulations which may replace the SFR (Financial and Margin Requirements), and any reference to any provision of the SFR (Financial and Margin Requirements) is to that provision as so modified, amended or re-enacted (or as contained in any subsequent regulations which may replace the SFR (Financial and Margin Requirements).
          "SGX-DC" means Singapore Exchange Derivatives Clearing Limited.
          "Singapore Government securities" means securities issued or proposed to be issued by the Government, and includes—
          (a) any debenture, stock or bond issued or proposed to be issued by the Government;
          (b) any right or option in respect of any debenture, stock or bond referred to in paragraph (a);
          (c) book-entry Government securities as defined in section 2 of the Development Loan (1987) Act (Cap. 81A) or section 2 of the Government Securities Act (Cap. 121A); and
          (d) book-entry Treasury Bills as defined in section 2 of the Local Treasury Bills Act (Cap. 167).
          T
          "Total risk requirement" has the meaning ascribed to it in Regulation 2 of the SFR (Financial and Margin Requirements).

          Amended on 23 January 200923 January 2009, 19 May 201419 May 2014, 29 December 201429 December 2014 and 22 April 201922 April 2019.

        • 11.1.2

          Unless the context requires otherwise, where the terms defined in Rule 11.1.1 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 those definitions apply to a holder of a Capital Markets Services Licence whether or not that Trading Member holds a Capital Markets Services Licence.

          Added on 29 December 201429 December 2014.

      • 11.1A Financial Requirement for Trading Members

        • 11.1A.1

          The following requirements apply in relation to Trading Members:—

          (1) a Trading Member that holds a Capital Markets Services Licence shall at all times meet the base capital requirements prescribed under Rule 11.2;
          (2) a Trading Member that holds a licence specified in Rule 4.1.1(1)(b) shall at all times meet the net liquid capital requirements prescribed under Rule 11.2A; and
          (3) all Trading Members shall meet such capital, financial and other requirements that SGX-ST may impose under Rule 11.5.

          Added on 19 May 201419 May 2014 and amended on 29 December 201429 December 2014.

      • 11.2 Base Capital Requirement [Rule has been deleted.]

        Deleted on 22 April 201922 April 2019.

        • 11.2.1

          (a) A Trading Member that holds a Capital Markets Services Licence shall not cause or permit:—
          (1) where the Corporation is incorporated in Singapore, its base capital; or
          (2) where the Corporation is incorporated outside Singapore, its net head office funds,

          to fall below the base capital requirement.

          (b) A Trading Member that holds a licence specified in Rule 4.1.1(1)(b) shall not cause or permit its base capital to fall below the base capital requirement specified in this Rule 11.2, or such other base capital requirement as SGX-ST may impose.

          Amended on 29 December 201429 December 2014 and 22 April 201922 April 2019.

        • 11.2.2

          The base capital requirement of:—

          (1) a Trading Member shall be at least $1 million,
          (2) a Clearing Member shall be at least $5 million,
          (3) a Clearing Member which is also a member of SGX-DC shall be at least $8 million.
        • 11.2.3

          If a Trading Member fails to comply or becomes aware that it will fail to comply with the base capital requirement prescribed under Rule 11.2, or such higher base capital requirement as SGX-ST may have imposed under Rule 11.5, it shall immediately notify SGX-ST.

        • 11.2.4

          (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 at any time fall below the base capital requirement specified in this Rule 11.2, or such other base capital requirement as SGX-ST may impose. 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 11.2.3.
          (b) A Trading Member that holds a licence specified in Rule 4.1.1(1)(b) shall not cause or permit its base capital to at any time fall below the base capital requirement specified in this Rule 11.2, or such other base capital requirement as SGX-ST may impose. It shall be a breach of the Rules by the Trading Member if the base capital falls below such base capital requirement, whether or not the Trading Member makes or has made the notification specified in Rule 11.2.3.

          SGX-ST may refer the matter to the Disciplinary Committee, and may take such interim control measures, including but not limited to do all or any of the following, as SGX-ST deems fit and appropriate:—

          (1) require the Trading Member to operate its business subject to such restrictions or conditions as SGX-ST decides;
          (2) suspend the Trading Member for a period SGX-ST decides. The suspension may be announced to all Trading Members. During the suspension, the Trading Member:—
          (a) must not enter into a new transaction without the approval of SGX-ST;
          (b) remains liable to complete all contracts outstanding at the time of suspension. However, it must not deliver any securities or settle any transaction without the approval of SGX-ST.
          (3) require a Director to step down from day-to-day conduct of the business affairs of the Trading Member; and
          (4) appoint a person or persons (which may include a firm of auditors) as Manager to manage the business of the Trading Member. SGX-ST will fix the remuneration of the Manager, which must be paid by the Trading Member. The Trading Member is solely responsible for the Manager's acts and defaults. The Manager must carry out directions given by SGX-ST in relation to the business of the Trading Member, including carrying on the business of the Trading Member in accordance with instructions.

          Amended on 22 April 201922 April 2019.

      • 11.3 Financial Resources Requirement

        This Rule 11.3 shall apply to a Trading Member that holds a Capital Markets Services Licence.

        Amended on 19 May 201419 May 2014 and 29 December 201429 December 2014.

        • 11.3.1

          A Trading Member shall not cause or permit:—

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

          to fall below its total risk requirement.

          Amended on 29 December 201429 December 2014.

        • 11.3.2

          Financial resources and adjusted net head office funds shall be calculated in the same manner as prescribed in Regulation 2 of the SFR (Financial and Margin Requirements).

          Amended on 29 December 201429 December 2014.

        • 11.3.3

          Total risk requirement shall be calculated in the same manner as prescribed in the Notice on Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licences.

          Amended on 29 December 201429 December 2014.

        • 11.3.5

          If a Trading Member fails to comply or becomes aware that it will fail to comply with the financial resources requirement prescribed under Rule 11.3, or such higher financial resources requirement as SGX-ST may have imposed under Rule 11.5, it shall immediately notify SGX-ST.

        • 11.3.6

          Regardless whether or not there has been any notification by a Trading Member under Rule 11.3.5, if the financial resources or adjusted net head office funds of the Trading Member, as the case may be, are below the total risk requirement prescribed under Rule 11.3 or such higher percentage of the total risk requirement as SGX-ST may have imposed under Rule 11.5, it shall be deemed a breach of a provision of the SGX-ST Rules by the Trading Member. SGX-ST may refer the matter to the Disciplinary Committee, and may take such interim control measures, including but not limited to do all or any of the following, as SGX-ST deems fit and appropriate:—

          (1) require the Trading Member to operate its business subject to such restrictions or conditions as SGX-ST decides;
          (2) suspend the Trading Member for a period SGX-ST decides. The suspension may be announced to all Trading Members. During the suspension, the Trading Member:—
          (a) must not enter into a new transaction without the approval of SGX-ST;
          (b) remains liable to complete all contracts outstanding at the time of suspension. However, it must not deliver any securities or settle any transaction without the approval of SGX-ST.
          (3) require a Director to step down from day-to-day conduct of the business affairs of the Trading Member; and
          (4) appoint a person or persons (which may include a firm of auditors) as Manager to manage the business of the Trading Member. SGX-ST will fix the remuneration of the Manager, which must be paid by the Trading Member. The Trading Member is solely responsible for the Manager's acts and defaults. The Manager must carry out directions given by SGX-ST in relation to the business of the Trading Member, including carrying on the business of the Trading Member in accordance with instructions.
        • 11.3.7 Early Warning Requirement on Financial Resources

          A Trading Member shall immediately notify SGX-ST if:—

          (1) in the case where the Trading Member is incorporated in Singapore, its financial resources; or
          (2) 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.

        • 11.3.8

          If SGX-ST is notified by a Trading Member under Rule 11.3.7 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 11.3.7) 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 higher percentage as SGX-ST may have imposed under Rule 11.5, 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).

        • 11.3.9 Notification Requirement on Financial Resources

          A Trading Member shall immediately notify SGX-ST if:—

          (1) in the case where the Trading Member is incorporated in Singapore, its financial resources; or
          (2) 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.

        • 11.3.10

          If SGX-ST is notified by a Trading Member under Rule 11.3.9 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 11.3.9) 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 higher percentage as SGX-ST may have imposed under Rule 11.5, SGX-ST shall be entitled to require the Trading Member to:—

          (1) 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
          (2) operate its business in such manner and on such conditions as SGX-ST may impose.
      • 11.4 Aggregate Indebtedness Requirement

        This Rule 11.4 shall apply to a Trading Member that holds a Capital Markets Services Licence.

        Amended on 19 May 201419 May 2014 and 29 December 201429 December 2014.

        • 11.4.1

          A Trading Member shall not cause or permit its aggregate indebtedness to exceed 1200% of its aggregate resources.

        • 11.4.2

          If a Trading Member fails to comply or becomes aware that it will fail to comply with the aggregate indebtedness requirement prescribed under Rule 11.4, or such lower percentage of aggregate indebtedness over aggregate resources as SGX-ST may have imposed under Rule 11.4, it shall immediately notify SGX-ST.

        • 11.4.3

          Regardless of whether or not there has been any notification by a Trading Member under Rule 11.4.2, if the aggregate indebtedness of the Trading Member exceeds 1200% of its aggregate resources prescribed under Rule 11.4, or such lower percentage of aggregate indebtedness over aggregate resources as SGX-ST may have imposed under Rule 11.5, it shall be deemed a breach of a provision of the SGX-ST Rules by the Trading Member. SGX-ST may refer the matter to the Disciplinary Committee, and may take such interim control measures, including but not limited to do all or any of the following, as SGX-ST deems fit and appropriate:—

          (1) require the Trading Member to operate its business subject to such restrictions or conditions as SGX-ST decides;
          (2) suspend the Trading Member for a period SGX-ST decides. The suspension may be announced to all Trading Members. During the suspension, the Trading Member:—
          (a) must not enter into a new transaction without the approval of SGX-ST;
          (b) remains liable to complete all contracts outstanding at the time of suspension. However, it must not deliver any securities or settle any transaction without the approval of SGX-ST.
          (3) require a Director to step down from day-to-day conduct of the business affairs of the Trading Member; and
          (4) appoint a person or persons (which may include a firm of auditors) as Manager to manage the business of the Trading Member. SGX-ST will fix the remuneration of the Manager, which must be paid by the Trading Member. The Trading Member is solely responsible for the Manager's acts and defaults. The Manager must carry out directions given by SGX-ST in relation to the business of the Trading Member, including carrying on the business of the Trading Member in accordance with instructions.
        • 11.4.4 Early Warning for Aggregate Indebtedness Requirement

          A Trading Member shall immediately notify SGX-ST if its aggregate indebtedness exceeds 600% of its aggregate resources.

        • 11.4.5

          If SGX-ST is notified by a Trading Member under Rule 11.4.4 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 11.4.4) that the Trading Member's aggregate indebtedness has exceeded or will exceed 600% of its aggregate resources, or such lower percentage as SGX-ST may have imposed under Rule 11.5, 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).

        • 11.4.6 Qualifying Letter of Credit

          (1) For the purpose of Rule 11.4, a Trading Member may include 1 or more Qualifying Letter(s) of Credit in its calculation of aggregate resources, subject to the total amount payable under the Qualifying Letter(s) of Credit or 50% of the Trading Member's total risk requirement, whichever is lower.
          (2) For the purpose of Rule 11.4.6(1), a Qualifying Letter of Credit is a legally enforceable and irrevocable letter of credit that is made:—
          (a) (i) in the case of a Trading Member who is not a Clearing Member, in favour of SGX-ST; or (ii) in the case of a Trading Member who is also a Clearing Member, in favour of CDP; and
          (b) 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 the Clearing Member to satisfy Rule 7 of the Clearing Rules of CDP or any other requirement imposed by CDP.
          (3) SGX-ST shall reserve the right to call on any of the letter(s) of credit made in favour of SGX-ST pursuant to Rule 11.4.6 and apply the proceeds thereof in respect of the Trading Member's default to SGX-ST.

          Added on 29 December 201429 December 2014.

      • 11.5 Powers to Impose Other Requirements

        • 11.5.1

          SGX-ST may prescribe for 1 or more Trading Members, capital, financial and other requirements in excess of the minimum prescribed under Chapter 11 herein on the basis of volume, risk exposure of positions carried, risk concentration, margin policies, nature of business conducted or to be conducted or its membership in any exchange or market and such other criteria as deemed necessary by SGX-ST.

      • 11.7 Exposure to Single Customer

        This Rule 11.7 shall apply to a Trading Member that holds a Capital Markets Services Licence.

        Amended on 19 May 201419 May 2014 and 29 December 201429 December 2014.

        • 11.7.1

          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.

        • 11.7.3

          In this Rule, "exposure to a single customer" means:—

          (1) in the case of securities carried in a customer's account (other than a margin financing account) carried on the books of a Trading Member::—
          (a) 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, which 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, which is held by the Trading Member less any amount due and payable by the Trading Member to him;
          (b) 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, which is held by the Trading Member and the contracted sale price less any amount due and payable by the Trading Member to him;
          (c) where the contracts referred to in Rule 11.7.3(1)(a) or (b) have been offset by a contra transaction on or before the due date, the exposure shall not include those amounts specified in Rule 11.7.3(1) (a) or (b) in respect of such contracts but shall instead include the amount of the contra loss, if any, on the date on which the contra transaction takes effect; and
          (d) where the contracts referred to in Rule 11.7.3(1)(a) or (b) 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 11.7.3(1) (a) or (b) 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;
          (1A) for the purposes of Rule 11.7.3(1) "securities" includes structured warrants;
          (2) 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;
          (3) 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;
          (4) 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;
          (5) the amount of any unsecured interest owed by the single customer;
          (6) the amount of any unsecured loan, advance and credit facility granted to the single customer;
          (7) 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;
          (8) 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 securities lent by him; and
          (9) 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.

          Amended on 3 April 20083 April 2008, 23 January 200923 January 2009 and 1 July 20161 July 2016.

        • 11.7.4

          For the purposes of Rule 11.7.3, a security or futures contract is deemed to be carried in a customer's account (other than a margin 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 which has been exercised.

          Amended on 23 January 200923 January 2009 and 1 July 20161 July 2016.

        • 11.7.5

          In this Rule:—

          "single customer" means, in relation to a customer who is:—

          (1) a person, that person and such group of persons who the first-mentioned person is able to control or influence;
          (2) a Corporation, that Corporation and any other Corporation or group of Corporations which is or are deemed to be related to the first-mentioned Corporation pursuant to section 4(1) of the Companies Act; or
          (3) a person, that person
          (a) and any Corporation whose issued share capital is 50% or more owned by those persons mentioned in Rule 11.7.5(1) or those Corporations mentioned in Rule 11.7.5(2); or
          (b) and any Corporation whose composition of board of directors is controlled by those persons mentioned in Rule 11.7.5(1); 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.
      • 11.7A Other Requirements for Exposure to Single Customer

        • 11.7A.1

          This Rule 11.7A shall apply to a Trading Member that holds a licence specified in Rule 4.1.1(1)(b). Such Trading Member shall have in place adequate tools and procedures to monitor its exposure to a single customer. SGX-ST shall have the right to require such Trading Member to demonstrate the adequacy of such tools and procedures as it deems necessary.

          Added on 19 May 201419 May 2014.

        • 11.7A.2

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

          Added on 19 May 201419 May 2014.

        • 11.7A.3

          In this Rule 11.7A, "single customer" and "exposure to a single customer" shall have the meaning ascribed to it in Rule 11.7.

          Added on 19 May 201419 May 2014.

      • 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 201419 May 2014 and 29 December 201429 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.

        • 11.8.4

          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 200923 January 2009, 29 December 201429 December 2014, 1 July 20161 July 2016 and 8 October 20188 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 20161 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 20083 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 20083 April 2008.

      • 11.8A Other Requirements for Exposure to Single Security

        • 11.8A.1

          This Rule 11.8A shall apply to a Trading Member that holds a licence specified in Rule 4.1.1(1)(b). Such Trading Member shall have in place adequate tools and procedures to monitor its exposure to a single security. SGX-ST shall have the right to require such Trading Member to demonstrate the adequacy of such tools and procedures as it deems necessary.

          Added on 19 May 201419 May 2014.

        • 11.8A.2

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

          Added on 19 May 201419 May 2014.

        • 11.8A.3

          In this Rule 11.8A, "single security" and "exposure to a single security" shall have the meaning ascribed to it in Rule 11.8.

          Added on 19 May 201419 May 2014.

      • 11.9 Margin Financing

        • 11.9.1A

          (1) In the case of a Trading Member that holds a Capital Markets Services Licence, Rules 11.9.2 to 11.9.16 shall apply; and
          (2) in the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), such requirements as may be prescribed by the Relevant Regulatory Authority shall apply. The Trading Member shall immediately notify SGX-ST on any changes to such requirements. Where no such requirements have been prescribed by the Relevant Regulatory Authority, Rules 11.9.2 to 11.9.16 shall apply. Notwithstanding the foregoing, SGX-ST shall have the discretion to prescribe additional requirements.

          Added on 19 May 201419 May 2014 and amended on 29 December 201429 December 2014.

        • 11.9.2

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

          Amended on 23 January 200923 January 2009.

        • 11.9.3

          If a Trading Member seeks to mortgage, pledge or hypothecate the Specified Products or property of any customer who operates a margin financing account with a Trading Member (such account being an account carried on the books of the Trading Member) shall authorise the Trading Member to mortgage, pledge or hypothecate the customer's securities or property for a sum not exceeding the debit balance in the margin financing account and without obligation to retain in its possession or control Specified Products of like character. The Trading Member shall also be given the discretion to sell or dispose of any or all the Specified Products in any manner in order to meet with the prescribed margin financing requirements.

          Amended on 23 January 200923 January 2009, 1 July 20161 July 2016 and 8 October 20188 October 2018.

        • 11.9.4

          A Trading Member shall not cause or permit any new transaction made in a customer's margin financing account (such account being an account carried on the books of the Trading Member) unless the resulting equity in the account is not less than 140% of the debit balance, or the Trading Member has required the customer to deposit margin in the margin financing account within 2 Market Days from the date of the Specified Products transaction to bring the equity to not less than 140% of the debit balance.

          Amended on 23 January 200923 January 2009, 1 July 20161 July 2016 and 8 October 20188 October 2018.

        • 11.9.5

          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.

          Amended on 10 November 200610 November 2006 and 8 October 20188 October 2018.

        • 11.9.6

          (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 fall to or below 110% of the debit balance in the customer's margin financing account, unless the Trading Member has immediately required the customer to provide additional margin in the margin financing account within 2 Market Days from the date of 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.
          (2) Where the equity in a customer's margin financing account falls to or below 110% of the debit balance in his margin financing account, and that the customer has failed to provide additional margin to increase the equity in his margin financing account to more than 110% of the debit balance in his margin financing account within the prescribed time frame referred to in Rule 11.9.6(1), a Trading Member shall have discretion, including, where appropriate, liquidating the Specified Products purchased via the margin financing account including the acceptable collateral deposited to bring the equity to more than 110% of the debit balance without notice to the customer.

          Amended on 10 November 200610 November 2006, 23 January 200923 January 2009, 1 July 20161 July 2016 and 8 October 20188 October 2018.

        • 11.9.8

          A Trading Member shall cause daily review to be made of all margin financing accounts carried on the books of the Trading Member to ensure that credit is not over-extended beyond the approved facility and that the margin financing requirements prescribed above are met at all times. For the purpose of computing margin financing requirements in a margin financing account, the last done price of the Specified Product on the preceding Market Day, or in the case of a Prescribed Instrument, the closing price of the Prescribed Instrument on the preceding Market Day, shall be used. All transactions done on the same day shall be combined on a transaction date basis and the total cost of purchase or the net proceeds of sale including any commission charged and other expenses shall be taken into account for computing margin financing requirements.

          Amended on 23 January 200923 January 2009, 24 February 201424 February 2014, 1 July 20161 July 2016 and 8 October 20188 October 2018.

        • 11.9.9

          A Trading Member shall have the discretion to impose higher margin financing requirements on any of its customers.

          Amended on 23 January 200923 January 2009.

        • 11.9.11

          A Trading Member shall not cause or permit:

          (1) 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;
          (2) 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
          (3) 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.

          Amended on 12 October 200512 October 2005, 23 January 200923 January 2009, 1 July 20161 July 2016 and 8 October 20188 October 2018.

        • 11.9.13

          All transactions in a margin account carried on the books of the Trading Member shall be on an immediate or a ready basis. The margin account shall not be used to subscribe for new issue of securities, or to meet margin requirements in respect of Marginable Futures Contracts.

          Amended on 23 January 200923 January 2009 and 1 July 20161 July 2016.

        • 11.9.14

          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 securities deposited as collateral by the margin customer, the Trading Member shall apply such applicable discounts as SGX-ST may prescribe from time to time.

          Amended on 23 January 200923 January 2009, 1 July 20161 July 2016 and 8 October 20188 October 2018.

        • 11.9.15

          SGX-ST shall have the absolute discretion to vary any or all of the margin financing requirements stipulated in Rule 11.9, and impose such other requirements for margin financing transactions from time to time as it deems fit and appropriate.

          Amended on 23 January 200923 January 2009.

        • 11.9.16

          In this Rule:—

          Term Meaning
          "debit balance" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).
          "equity" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).
          "free financial resources" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).
          "acceptable collateral" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).
          "margin exposure" has the meaning ascribed to it in Regulation 24(6) of the SFR (Financial and Margin Requirements).

          Amended on 12 October 200512 October 2005 and 10 November 200610 November 2006.

      • 11.10 Submission of Returns

        Amended on 19 May 201419 May 2014.

        • 11.10.1

          A Trading Member shall submit to SGX-ST financial returns as follows:

          (1) 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;
          (2) in the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), submit by such time specified by SGX-ST financial returns based on such computation methodology and in the form prescribed by SGX-ST; and
          (3) and such other statements as SGX-ST may from time to time require in the format specified by SGX-ST.

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

          Amended on 3 January 20073 January 2007, 19 May 201419 May 2014, 29 December 201429 December 2014 and 22 April 201922 April 2019.

        • 11.10.2

          Where a Trading Member fails to submit the statements required in Rule 11.10.1 within the prescribed time, there shall be imposed upon the Trading Member a late fee of $100 for each day that the statements are not submitted in the prescribed time, unless an extension of time has been granted.

        • 11.10.3

          Requests for extension of time shall be submitted to SGX-ST at least 3 Market Days prior to the due date for submission of the statements.

        • 11.10.4

          A Trading Member shall be required to resubmit the statements and documents prescribed under Rule 11.10.1 and take such other steps as SGX-ST may require upon SGX-ST's notification that the statements and documents are inaccurate or incomplete.

      • 11.11 Annual Financial Audit

        • 11.11.1

          A Trading Member shall:

          (1) 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
          (2) in the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), notify SGX-ST at least seven (7) days prior to any change of its existing external auditor. The Trading Member shall appoint external auditors that are accepted by its Relevant Regulatory Authority.

          Amended on 19 May 201419 May 2014 and 29 December 201429 December 2014.

        • 11.11.1A

          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:

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

          Added on 19 May 201419 May 2014.

        • 11.11.2

          A Trading Member shall, within 5 months after the close of the financial year, furnish to SGX-ST the following information:

          (1) relevant forms in respect of its annual financial audit which a Trading Member is required to lodge with its Relevant Regulatory Authority, translated into English, and as prescribed by SGX-ST. In the case of a Trading Member who 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);
          (2) audited accounts of the Trading Member and its subsidiaries; and
          (3) a certificate in respect of its annual financial audit signed by the auditor appointed by the Trading Member to carry out such audit in such form prescribed by the Relevant Regulatory Authority.

          Amended on 12 October 200512 October 2005, 19 May 201419 May 2014, 29 December 201429 December 2014, 8 October 20188 October 2018 and 22 April 201922 April 2019.

        • 11.11.3

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

          (1) of any matter which in his opinion adversely affects or may adversely affect the financial position of the Trading Member to a material extent,
          (2) of any matter which in his opinion constitute or may constitute a contravention breach of any provision of the SFA 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,
          (3) of any irregularity that has or may have a material effect upon the accounts, including irregularities that jeopardise the moneys or other assets of any customer of the Trading Member, or
          (4) that the accounting system, internal accounting control and procedures for safeguarding moneys or other assets are inadequate and the inadequacies have a material effect on the accounts,

          the auditor shall immediately report the matter to SGX-ST.

          Amended on 19 May 201419 May 2014 and 8 October 20188 October 2018.

        • 11.11.4

          (1) Where a Trading Member fails to submit the documents pursuant to Rule 11.11.2 within the specified time, there may be imposed upon that Trading Member a fee of $200 for each day that the statements are not submitted within the prescribed time, unless an extension of time has been granted.
          (2) Requests for extension of time shall be submitted to SGX-ST at least 3 Market Days prior to the due date.
      • 11.12 Provision in Annual Accounts

        • 11.12.1

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

      • 11.13 Other Financial Requirements

        • 11.13.1 Reduction in Paid-Up Ordinary Share Capital or Paid-Up Irredeemable and Non-Cumulative Preference Share Capital

          A Trading Member which 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.

          Amended on 10 November 200610 November 2006 and 29 December 201429 December 2014.

        • 11.13.2 Preference Shares

          (1) A Trading Member which is incorporated in Singapore shall notify SGX-ST prior to the issue of any preference share.
          (2) A Trading Member which 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:—
          (a) 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);
          (b) 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;
          (c) if such repurchase or redemption will cause an event in Rule 11.13.2(2)(b) above to occur; or
          (d) if SGX-ST has prohibited in writing such a repurchase or redemption.

          Amended on 29 December 201429 December 2014.

        • 11.13.3 Qualifying Subordinated Loan

          (1) 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.
          (2) 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.
          (3) 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.
          (4) A Trading Member shall not repay, whether in part or in full, any subordinated loan principal that has matured:—
          (a) unless the Trading Member notifies SGX-ST at least 1 Market Day before the date of repayment;
          (b) if its financial resources is less than 150% of its total risk requirement;
          (c) if its aggregate indebtedness exceeds 600% of its aggregate resources;
          (d) if such a repayment will cause an event in Rule 11.13.3(4)(b) or (c) to occur; or
          (e) if SGX-ST has prohibited in writing such a repayment.

          Amended on 29 December 201429 December 2014.

        • 11.13.4 Making of Unsecured Loan or Advance, Payment of Dividend or Director's Fees or Increase in Director's Remuneration

          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:—

          (1) in the case where the Trading Member is incorporated in Singapore:—
          (a) its base capital is less than the base capital requirement as prescribed in Rules 11.2 and 11.5;
          (b) its financial resources is less than 150% of its total risk requirement;
          (c) its aggregate indebtedness exceeds 600% of its aggregate resources;
          (d) such a loan, advance, payment or increase will cause an event in Rule 11.13.4(1)(a), (b) or (c) to occur; or
          (2) in the case where the Trading Member is incorporated outside Singapore:—
          (a) its net head office funds is less than the base capital requirement as prescribed in Rules 11.2 and 11.5;
          (b) its adjusted net head office funds is less than 150% of its total risk requirement;
          (c) its aggregate indebtedness exceeds 600% of its aggregate resources;
          (d) such a loan, advance, payment or increase will cause an event in Rule 11.13.4(2)(a), (b) or (c) to occur.

          Amended on 29 December 201429 December 2014.

        • 11.13.5

          Rules 11.13.1 to 11.13.4 shall not apply to a Trading Member that holds a licence specified in Rule 4.1.1(1)(b). Such a Trading Member shall notify the Exchange immediately of any actions taken relating to:

          (1) any reduction in paid-up ordinary share capital;
          (2) any issue of any preference share;
          (3) 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;
          (4) [Rule has been deleted.]
          (5) that has or may have a financial or capital impact on the Trading Member and required to be reported to the Relevant Regulatory Authority.

          Added on 19 May 201419 May 2014 and amended on 22 April 201922 April 2019.

      • 11.14 Register of Connected Persons

        • 11.14.1

          A Trading Member that holds a Capital Markets Services Licence licence shall keep a register of its directors and their connected persons. For the purpose of this Rule, a "connected person" has the meaning ascribed to it in Section 2 of the SFA.

          Amended on 19 May 201419 May 2014 and 29 December 201429 December 2014.

    • Chapter 12 — Operational Requirements

      • 12.1 Records

        • 12.1.1

          A Trading Member, Director or Trading Representative must:—

          (1) maintain complete and accurate records and audit trails to evidence compliance with
          (a) in the case of a Trading Member that holds a Capital Markets Services Licence, the Rules, and in accordance with the requirements in the Securities and Futures Act, and/or Securities and Futures Regulations or the Rules; and
          (b) in the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), such requirements as may be prescribed by the Relevant Regulatory Authority and the Rules. The Trading Member shall immediately notify SGX-ST on any changes to such requirements. Notwithstanding the foregoing, SGX-ST shall have the discretion to prescribe additional requirements;
          (2) not make, or cause to be made, a false or misleading entry, in hardcopy, or electronic form, in any books, records, slips, documents, statements relating to the business, affairs, transactions, conditions, assets or accounts ("the Documents") of a Trading Member;
          (3) make all material entries in any of the Documents; and
          (4) not alter or destroy any of the Documents without a valid reason.

          Refer to Directive No. 4.

          Amended on 18 September 201218 September 2012, 19 May 201419 May 2014 and 29 December 201429 December 2014.

        • 12.1.2

          A Trading Member must ensure the integrity, security and confidentiality in the transmission and storage of all records.

      • 12.2 Confidentiality of Customer's Information

        • 12.2.1

          A Trading Member and its Trading Representative must maintain confidentiality of a customer's information, unless:—

          (1) the prior consent of the customer for the disclosure of the information is obtained;
          (2) the disclosure is for the effective execution of the customer's order;
          (3) the disclosure is necessary for the operations and risk management of the Trading Member if these functions have been outsourced by the Trading Member; or
          (4) the disclosure is required under the law or under the Rules.
        • 12.2.2

          A Trading Member must ensure that a person to whom it discloses a customer's information under Rules 12.2.1(2) and (3) maintains confidentiality of such information.

      • 12.3 Customer Accounts

        • 12.3.1 Individual Customer Account

          Before opening an individual customer account on its books, a Trading Member must:—

          (1) obtain particulars of the customer (and any person authorised to trade for the customer), including the full name, a copy of the identity card/passport, specimen signature, residential and mailing addresses, telephone numbers, occupation, and the name, address and telephone number of the customer's employer, and investment objectives (if applicable); and
          (2) take suitable steps to verify the customer's identity and intention if the customer does not open the account in person.

          Refer to Practice Note 12.3.1, Practice Note 12.3.1, 12.3.2 and Practice Note 12.3.1, 12.3.4.

          Amended on 1 July 20161 July 2016.

        • 12.3.2 Corporate Customer Account

          Before opening a corporate customer account on its books, a Trading Member must:—

          (1) obtain particulars of the customer, including the full name, registered and mailing addresses, names and signatures of persons authorised to trade, and investment objectives (if applicable);
          (2) obtain a certified true copy of the certificate of incorporation of the customer; and
          (3) obtain either:—
          (a) a copy of the directors' resolution of the customer approving the opening of a corporate customer account with the Trading Member and empowering specific directors and officers to:—
          (i) trade in securities or futures contracts for the corporate customer account; and
          (ii) execute all documentation for trading and settlement in the corporate customer account;
          (b) a power of attorney (in English) certified by a notary public, authorising identified persons to open a corporate customer account and trade on behalf of the corporate customer; or
          (c) note in writing the basis upon which it believes the corporate customer may open the corporate customer account and engage in transactions and that the persons acting for the corporate customer have been duly authorised to trade on the corporate customer's behalf.

          Refer to Practice Note 12.3.1, 12.3.2.

          Amended on 3 April 20083 April 2008, 1 July 20161 July 2016 and 8 October 20188 October 2018.

        • 12.3.3 Agency Customer Account

          For an agency customer account carried on the books of a Trading Member, the Trading Member must have on file:—

          (1) the name of the principal; and
          (2) written evidence of the customer's authority to trade for the principal.

          Amended on 1 July 20161 July 2016.

        • 12.3.4 Joint Customer Account

          (1) A Trading Member may allow customers to open a joint customer account carried on its books if:—
          (a) a joint securities account is opened with CDP;
          (b) each joint customer account holder is at least 18 years old; and
          (c) no joint customer account holder is an undischarged bankrupt.
          (2) A joint customer account may be operated by not more than 2 individual customers. However, if it is an estate account, it may be operated by all personal representatives acting on behalf of the estate of the deceased.
          (3) A Trading Member must maintain the following information:—
          (a) particulars of each joint customer account holder;
          (b) the names of persons authorised to give trading orders and settlement instructions and receive scrip from the Trading Member;
          (c) the names of persons to whom payments by the Trading Member are to be made; and
          (d) details of any customer accounts carried on the books of the Trading Member held in an individual capacity by a joint customer account holder.
          (4) A Trading Member must require each joint customer account holder to specify whether the joint customer account holder is jointly, severally, or jointly and severally liable for all debts incurred in a joint customer account.

          Refer to Practice Note 12.3.1, 12.3.4.

          Amended on 14 May 200914 May 2009 and 1 July 20161 July 2016.

        • 12.3.5 Approval of Customer Accounts

          (1) At least 1 senior management staff independent of sales or dealing of a Trading Member, or a senior management staff of a related corporation of that Trading Member charged with the customer account approval function, must approve the opening of a customer account carried on the books of the Trading Member.
          (2) The approval must:—
          (a) be given before the execution of the first trade for the customer; and
          (b) be in writing which includes secured electronic record; and
          (c) form part of the permanent records of the Trading Member.

          Amended on 1 July 20161 July 2016.

        • 12.3.6 Risk Acknowledgement Statement

          A Trading Member must ensure that the customer is aware of and must obtain a written acknowledgement from the customer that the customer is aware of and understands the risks associated with holding and trading securities and futures contracts in accordance with:

          (i) in the case of a Trading Member that holds a Capital Markets Services Licence, Regulation 47DA of the SFR (Licensing and Conduct of Business); and
          (ii) in the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), contain such requirements as may be prescribed by the Relevant Regulatory Authority. The Trading Member shall immediately notify SGX-ST on any changes to such requirements. Notwithstanding the foregoing, SGX-ST shall have the discretion to prescribe additional requirements.

          Amended on 3 April 20083 April 2008, 18 September 201218 September 2012, 19 May 201419 May 2014, 29 December 201429 December 2014 and 8 October 20188 October 2018.

        • 12.3.7 Separate Trading Accounts and Account Designation

          (1) A Trading Member must maintain separate Trading Accounts for each customer or each group of joint customers (as the case may be) whose account is carried on the books of the Trading Member.
          (2) Each Trading Account must be identified and designated by the full name of the of the customer(s) whose account is carried on the books of the Trading Member and by a unique Trading Account code, both of which must be reported to SGX-ST before the Trading Account is used to send in any orders.

          Amended on 18 September 201218 September 2012, 26 April 201326 April 2013 and 1 July 20161 July 2016.

        • 12.3.8

          In this Rule 12.3, a customer account on the books of a Trading Member includes an account of a Trading Representative.

          Amended on 1 July 20161 July 2016.

      • 12.3A Customer Education

        • 12.3A.1

          Save for Accredited Investors and Institutional Investors, a Trading Member must provide its Internet Trading customers with adequate information, guidance and training on:—

          (1) prohibited trading practices;
          (2) potential limitations and risks of Internet Trading;
          (3) system functionalities and order management procedures; and
          (4) market conventions such as minimum bid sizes and board lot sizes.

          With respect to Accredited Investors and Institutional Investors, a Trading Member's obligation relates solely to the provision of adequate information in relation to prohibited trading practices.

          Added on 18 September 201218 September 2012.

      • 12.4 Trading Authority

        • 12.4.1

          Before accepting any orders from a third party, a Trading Member must obtain written authorisation from the customer empowering the third party to trade for the customer's account carried on the books of the Trading Member.

          Amended on 1 July 20161 July 2016.

      • 12.5 Brokerages and Charges

        • 12.5.2

          All charges and expenses, including any fees imposed by CDP and/or SGX-ST, stamp duty and Goods and Services Tax, to be borne by the customer (whether included as part of the brokerage or otherwise) must be accurately disclosed to the customer and agreed between the customer and the Trading Member.

          Amended on 1 July 20161 July 2016.

      • 12.6 Contract Notes

        • 12.6.2

          The contract note must state that the contract is subject to the Rules and Directives of SGX-ST if the trade is:—

          (1) transacted on or through the Trading System; or
          (2) reported to SGX-ST.

          Amended on 3 April 20083 April 2008.

        • 12.6.3

          In the case of a Trading Member that holds a Capital Markets Services Licence<:

          (1) A contract note must:
          (a) be sent by the next market day;
          (b) contain the information specified in Regulation 42(1B) of the Securities and Futures (Licensing and Conduct of Business) Regulations; and
          (c) show separately, where applicable:
          (i) brokerage charged by the Trading Member;
          (ii) [deleted];
          (iii) stamp duty;
          (iv) Goods and Services Tax;
          (v) any other fees in addition to the brokerage charged by the Trading Member; and
          (vi) any other fees charged by any other party (including CDP and/or SGX-ST) and borne by the customer in addition to the brokerage charged,
          unless otherwise prescribed by SGX-ST from time to time,
          (2) before issuing contract notes in electronic form, the Trading Member must obtain the customer's prior revocable and informed consent. The Trading Member must retain evidence of the customer's consent. To constitute an informed consent, a customer must be told of the manner of delivery and retrieval of the electronic record and any costs that may be incurred.

          Amended on 23 January 200923 January 2009, 19 May 201419 May 2014, 29 December 201429 December 2014 and 1 July 20161 July 2016.

        • 12.6.4

          In the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), a contract note must comply with such requirements as may be prescribed by the Relevant Regulatory Authority, including requirements relating to a customer's contract note in electronic form. The Trading Member shall immediately notify SGX-ST on any changes to such requirements. Notwithstanding the foregoing, SGX-ST shall have the discretion to prescribe additional requirements.

          Amended on 19 May 201419 May 2014.

        • 12.6.5

          If asked by SGX-ST, a Trading Member must produce the contract notes in substantially the same form and containing the same trading information as were given to customers.

          Amended on 19 May 201419 May 2014.

      • 12.7 Statement of Account to Customers

        • 12.7.1

          A Trading Member must send its customer statements of account on a regular basis in accordance with:

          (a) in the case of a Trading Member that holds a Capital Markets Services Licence, Regulation 40 of the SFR (Licensing and Conduct of Business); and
          (b) in the case of a Trading Member that holds a licence specified Rule 4.1.1(1)(b), such requirements as may be prescribed by the Relevant Regulatory Authority, including requirements relating to a customer's statement of account in electronic form. The Trading Member shall immediately notify SGX-ST on any changes to such requirements. Notwithstanding the foregoing, SGX-ST shall have the discretion to prescribe additional requirements.

          Amended on 19 May 201419 May 2014, 1 July 20161 July 2016 and 8 October 20188 October 2018.

        • 12.7.5

          If asked by SGX-ST, a Trading Member must produce the statement of accounts in substantially the same form and containing the same information as were given to customers.

      • 12.8 Amendment of Contract

        • 12.8.1

          A Trading Member may amend a contract if there is a valid reason for the amendment.

        • 12.8.2

          At least 1 senior management staff independent of sales or dealing of a Trading Member, or a senior management staff of a related corporation of that Trading Member charged with the contract amendment function, must approve the amendment of contract.

        • 12.8.3

          The approval must be given before the contract is amended.

      • 12.9 Communication with Third Parties

        • 12.9.1

          A Trading Member must communicate directly with its customers in respect of statements, contract notes, or all other information, whether in writing or electronically, unless the customer has authorised otherwise in writing.

        • 12.9.2

          A Trading Member must not allow any person other than the customer to collect any cash, share certificates, contract notes, credit or debit notes, cheques or statements, unless the customer has authorised that person in writing.

      • 12.10 Payment to Customers

        • 12.10.1

          All cheques to customers must be crossed, unless:—

          (1) the payee customer requests otherwise in writing; and
          (2) a senior management staff independent of sales or dealing of a Trading Member, or a senior management staff of a related corporation of that Trading Member charged with the payment function, authorises in writing the request.
        • 12.10.2

          A Trading Member must not accept a house cheque (a crossed cheque issued by the Trading Member in favour of a customer) from a customer unless:—

          (1) the customer is the payee of the cheque; and
          (2) the cheque is used to settle an amount owing by the customer to the Trading Member or is deposited into a trust account under Rule 12.11, as directed by the customer.
      • 12.10A Customer's Money and Assets

        • 12.10A.1

          Subject to Rule 12.10A.2, a Trading Member must discharge its fiduciary obligations to its Customers by:

          (1) segregating Customers' monies and assets from the Trading Member's monies and assets;
          (2) depositing Customers' monies and assets in trust or custody accounts; and
          (3) separately accounting for the monies and assets of each Customer.

          Added on 19 May 201419 May 2014.

        • 12.10A.2

          A Trading Member shall:

          (1) in the case of a Trading Member that holds a Capital Markets Services Licence, comply with such requirements prescribed in Rules 12.11 and 12.12; and
          (2) in the case of a Trading Member that holds a licence specified in Rule 4.1.1(1)(b), comply with such requirements as may be prescribed by the Relevant Regulatory Authority. The Trading Member shall immediately notify SGX-ST on any changes to such requirements. Notwithstanding the foregoing, SGX-ST shall have the discretion to prescribe additional requirements.

          Added on 19 May 201419 May 2014 and amended on 29 December 201429 December 2014.

      • 12.11 Customer's and Remisier's Money

        • 12.11.1

          A Trading Member must comply with Part III, Divisions 2 and 4 of the Securities and Futures (Licensing and Conduct of Business) Regulations on customer's money. For the purpose of this Rule, "customer" includes a Remisier, unless otherwise specified.

          Amended on 23 January 200923 January 2009.

        • 12.11.2

          Regulation 16(1)(b) of the Securities and Futures (Licensing and Conduct of Business) Regulations does not apply to a Remisier. A Trading Member must deposit all money received on account of a Remisier in a trust account.

          Amended on 23 January 200923 January 2009.

        • 12.11.3

          A Trading Member must designate the accounts maintained with a financial institution specified in Regulation 17 of the Securities and Futures (Licensing and Conduct of Business) Regulations for a customer or a Remisier as a trust account, or customer or Remisier account, as the case may be.

          Amended on 23 January 200923 January 2009.

        • 12.11.4

          A Trading Member must deposit money received on account of customers in a separate trust account from Remisiers.

          Amended on 23 January 200923 January 2009.

        • 12.11.5

          A Trading Member must not commingle money received on account of its customers or its Remisiers with its own funds. However, a Trading Member may deposit its own funds into a trust account under the circumstances specified in Regulation 23(1) of the Securities and Futures (Licensing and Conduct of Business) Regulations.

          Amended on 23 January 200923 January 2009.

        • 12.11.6

          A Trading Member must not withdraw a Remisier's money from a trust account except to:—

          (1) pay the Remisier;
          (2) meet any amount due and payable by the Remisier to the Trading Member;
          (3) reimburse the Trading Member money advanced to the trust account, and any interest and returns that the Trading Member is entitled to, provided the withdrawal does not result in the trust account becoming under-funded; or
          (4) make a payment or withdrawal that is authorised by law.
        • 12.11.7

          A Trading Member must notify the Remisier of the withdrawal made under Rule 12.11.6 by the next business day.

      • 12.12 Customer's and Remisier's Assets

        • 12.12.1

          A Trading Member must comply with Part III, Divisions 3 and 4 of the Securities and Futures (Licensing and Conduct of Business) Regulations on customer's assets. For the purpose of this Rule, "customer" includes a Remisier, unless otherwise specified.

          Amended on 23 January 200923 January 2009.

        • 12.12.2

          Regulations 30, 33 and 34 of the Securities and Futures (Licensing and Conduct of Business) Regulations do not apply to a Remisier.

          Amended on 23 January 200923 January 2009.

        • 12.12.3

          A Trading Member must designate the accounts maintained with a financial institution specified in Regulation 27 of the Securities and Futures (Licensing and Conduct of Business) Regulations for a customer or a Remisier as a trust account, or customer or Remisier account, as the case may be.

          Amended on 23 January 200923 January 2009.

        • 12.12.4

          A Trading Member must deposit assets of its customers in a separate custody account from Remisiers.

          Amended on 23 January 200923 January 2009.

        • 12.12.5

          A Trading Member must not commingle the assets of a customer or Remisier with its own assets.

        • 12.12.6

          A Trading Member must not withdraw a Remisier's assets from a custody account except to:—

          (1) return the assets to the Remisier;
          (2) use the assets to meet any amount due and payable by the Remisier to the Trading Member; or
          (3) make a transfer or withdrawal that is authorised by law.
        • 12.12.7

          A Trading Member must notify the Remisier of the withdrawal under Rule 12.12.6 by the next business day.

        • 12.12.8

          For the purpose of this Rule, "Remisier's assets" means any securities and assets (other than money) that are beneficially owned by a Remisier.

      • 12.13 Reporting of Delinquent Accounts

        • 12.13.1

          A Trading Member that holds a Capital Markets Services Licence must inform SGX-ST (or any third party to whom SGX-ST has outsourced its operational functions) of the particulars of any customer account carried on the books of the Trading Member that it considers to be a delinquent account. SGX-ST (or the third party) may disseminate such information to all other Trading Members that holds a Capital Markets Services Licence.

          Amended on 19 May 201419 May 2014, 29 December 201429 December 2014 and 1 July 20161 July 2016.

      • 12.14 Separation of Front Office and Back Office Functions

        • 12.14.1

          A Trading Member must have processes in place to minimise and manage any conflicts of interest, including but not limited to separating its front office and back office functions to prevent any conflict of interests.

          Amended on 18 September 201218 September 2012.

      • 12.15 Stock Account

        • 12.15.2

          A Stock Account must be operated by a Director, or his designate, who is licensed to trade.

          Amended on 3 April 20083 April 2008.

      • 12.17 Trading by Employees and Agents

        • 12.17.1

          A Trading Member must require a Director, Officer, Dealer and employee to obtain the prior written approval of a senior management staff independent of sales or dealing of a Trading Member, or a senior management staff of a related corporation of that Trading Member charged with the approval function, for each trade in his or her personal account or an account over which he or she has control or influence (other than a customer's Discretionary Account) (such account(s) being an account carried on the books of the Trading Member).

          Refer to Practice Note 12.17.1.

          Amended on 3 April 20083 April 2008 and 1 July 20161 July 2016.

        • 12.17.2

          A Trading Representative of the Trading Member must not execute an order for an account referred to in Rule 12.17.1, unless the order is authorised in writing as required under Rule 12.17.1.

        • 12.17.3

          A Trading Member must require a Director, Officer, Trading Representative or employee of the Trading Member to trade through it. However, if this is impractical, the Trading Member meets this Rule if it has procedures to monitor such trades and it documents the circumstances that give rise to the impracticality.

        • 12.17.4

          A Trading Member must not knowingly buy or sell securities or futures contracts for a Director, Officer, Trading Representative or employee of another Trading Member, except with the prior written approval of the other Trading Member.

          Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 12.17.5

          A Trading Member must have in place procedures to ensure that agents who are privy to confidential information relating to dealing in securities or trading in futures contracts, do not use such information to trade for their own benefit.

          Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 12.17.6

          A Trading Member must have in place procedures to monitor the trading activities of its Directors, Officers, Trading Representatives and employees.

          Refer to Practice Note 12.17.1.

      • 12.18 Compliance Review

        • 12.18.1

          A Trading Member must carry out checks from time to time to ensure compliance with:

          (1) the regulatory requirements of such Relevant Regulatory Authority;
          (2) the Rules, Directives; and
          (3) its policies and procedures.

          Amended on 19 May 201419 May 2014.

        • 12.18.2

          The checks must be carried out by an internal audit or compliance department/person whose reporting line is independent of dealing, sales and operations.

          Added on 19 May 201419 May 2014.

      • 12.18A Broker-linked balances

        • 12.18A.1

          A Trading Member linked to a broker-linked balance must have a written agreement with the holder of the broker-linked balance setting out (a) the circumstances under which the Trading Member may cause securities to be delivered or transferred into the broker-linked balance; and (b) the conditions to which the Trading Member's rights over the securities in the broker-linked balance are subject. The Trading Member must provide the written agreement to SGX-ST for inspection if requested.

          Added on 10 December 201810 December 2018.

        • 12.18A.2

          The Trading Member shall act in accordance with the written agreement, the Rules and the Act, save that nothing in the Rules shall prevent a Trading Member from releasing securities from the broker-linked balance linked to it into the customer's main balance.

          Added on 10 December 201810 December 2018.

        • 12.18A.3

          Subject to Rule 12.18A.4, a Trading Member must approve the release of securities from the broker-linked balance linked to it by the end of the Market Day following the day on which it receives the customer's request for such release. SGX-ST may, at its discretion, waive or vary this timeline. In accordance with Rule 12.1.1, a Trading Member must maintain proper, complete and accurate records of each customer's requests and its response to such requests.

          Added on 10 December 201810 December 2018.

        • 12.18A.4

          A Trading Member may withhold approval for the release of any securities from a broker-linked balance linked to it only to the extent necessary to secure an obligation owed to it by the holder of the broker-linked balance.

          Added on 10 December 201810 December 2018.

        • 12.18A.5

          A Trading Member that does not approve a customer's request for release of any securities must:

          (a) by the end of the Market Day following the day on which it receives the customer's request, inform the customer that the request has been rejected and the securities will not be released;
          (b) provide the reason(s) for not releasing the securities, including details of the obligation(s) which is owed by the customer to the Trading Member, including the value thereof, if so requested by the customer, by the Market Day following the day on which it receives the customer's request for reason(s) and/or details; and
          (c) provide the customer with such information and by such time as SGX-ST may prescribe from time to time.
          SGX-ST may, at its discretion, waive or vary any of the timelines in this Rule.
          In accordance with Rule 12.1.1, a Trading Member must maintain proper, complete and accurate records of each customer's requests and its response to such requests.

          Added on 10 December 201810 December 2018.

        • 12.18A.6

          SGX-ST may, in respect of any Securities Account that is maintained directly with it:

          (a) transfer securities out of a broker-linked balance into the main balance, notwithstanding that the Trading Member linked to the broker-linked balance has not approved the transfer, if SGX-ST is of the view that the Trading Member has failed to comply with the Rules;
          (b) refuse to transfer securities into a broker-linked balance if the Trading Member linked to the broker-linked balance has had its trading rights ceased, is suspended, or has been terminated under the Rules.

          Added on 10 December 201810 December 2018.

        • 12.18A.7

          A resigning Trading Member must, in respect of each customer that has a broker-linked balance linked to it, release all securities in the broker-linked balance into the customer's main balance by the effective date of resignation.

          Added on 10 December 201810 December 2018.

      • 12.19 Advertising

        • 12.19.1

          A Trading Member must ensure that any advertising or publicity:—

          (1) is accurate;
          (2) is not misleading;
          (3) does not contain claims that are not externally verifiable; and
          (4) does not tend to bring SGX or its related corporations, or other Trading Members, into disrepute.
        • 12.19.2

          A Trading Member that holds a licence specified in Rule 4.1.1(1)(b) shall not direct any advertising or publicity to deal in securities or futures contracts on SGX-ST to customers domiciled in Singapore or to the extent that it may be acted upon by customers in Singapore.

          Added on 19 May 201419 May 2014 and amended on 8 October 20188 October 2018.

      • 12.20 Soft Dollar Commissions

        • 12.20.1

          A Trading Member and its Trading Representatives may receive goods and services from a broker for directing business to the broker if:—

          (1) the goods and services can reasonably be expected to assist in the provision of services to the customer;
          (2) records of the goods and services received are maintained; and
          (3) there are appropriate internal controls and procedures for such arrangements.

          Refer to Practice Note 12.20.1.

        • 12.20.2

          A Trading Member may pay for goods and services to customers for directing business to the Trading Member if:—

          (1) records of such payments are maintained;
          (2) there are procedures to control such arrangements; and
          (3) the arrangements do not violate any law, regulation or professional code of ethics on the part of the recipients.

          Refer to Practice Note 12.20.1.

      • 12.21 Use of Office Premises

        • 12.21.1

          A Trading Member must not allow any unauthorised person to use, or operate out of, its office premises.

      • 12.22 Use of Prescribed Forms

        • 12.22.1

          A Trading Member must use forms that SGX-ST prescribes.

      • 12.23 Application of Chapter 12

        • 12.23.1

          The following Rules shall not apply to a Trading Member that holds a licence specified in Rule 4.1.1(1)(b).

          Rule Heading
          12.3.1,
          12.3.2,
          12.3.3,
          12.3.4,
          12.3.5
          Customer Accounts
          12.3A Customer Education
          12.4 Trading Authority
          12.8.2,
          12.8.3
          Amendment of Contract
          12.9 Communications with Third Parties
          12.10 Payment to Customers
          12.15 Stock Account
          [Deleted] [Deleted]
          12.17 Trading by Employees and Agents

          Added on 19 May 201419 May 2014 and amended on 1 July 20161 July 2016.

        • 12.23.2

          A Trading Member that holds a licence specified in Rule 4.1.1(1)(b) shall comply with such requirements established by the Relevant Regulatory Authority, if any, and principles of good business practice in relation to the areas set out in Rule 12.23.1.

          Added on 19 May 201419 May 2014.

    • Chapter 12A — Position Accounts

      • 12A.1 Definitions

        • 12A.1.1

          In this Chapter 12A:-

          "Authorized Trading Member" means a Trading Member who has been duly authorized under Rule 5A.4 of the Clearing Rules by its qualifying Clearing Member to open and maintain Position Accounts or to open, maintain and allocate positions to Position Accounts, as the case may be.

          "Authorized Account" means the Position Account (of the Authorized Trading Member or of the Authorized Trading Member's customer) that an Authorized Trading Member is authorized by its qualifying Clearing Member to open and maintain or to open, maintain and allocate positions to, under Rule 5A.4 of the Clearing Rules.

          "TPC Trading Member" means a Trading Member who is qualified by a third-party Clearing Member and includes, unless otherwise specified, an Authorized Trading Member.

          Added on 1 July 20161 July 2016.

      • 12A.2 Position Account Rules apply to Authorized Trading Member

        • 12A.2.1

          Where an Authorized Trading Member is authorized by a Clearing Member to open and maintain Authorized Accounts under Rule 5A.4.1(a) of the Clearing Rules, Rules 5A.1 and 5A.2 of the Clearing Rules shall, with the necessary modifications, apply to the Authorized Trading Member in respect of each Authorized Account, as those provisions apply to the Clearing Member.

          Added on 1 July 20161 July 2016.

        • 12A.2.2

          Where an Authorized Trading Member is authorized by a Clearing member to open, maintain and allocate positions to the Authorized Accounts under Rule 5A.4.1(b) of the Clearing Rules, Rules 5A.1, 5A.2, 5A.3 and 5A.6 of the Clearing Rules shall, with the necessary modifications, apply to the Authorized Trading Member in respect of each of its Authorized Account, as those provision apply to the Clearing Member.

          Added on 1 July 20161 July 2016.

      • 12A.3 Position Accounts carrying positions for more than one beneficial owner

        • 12A.3.1

          Subject to Rule 12A.3.2., an Authorized Trading Member shall identify, or ensure that such information is made available, to SGX-ST any underlying beneficial owner and/or any controlling party of any Authorized Account. This shall be provided upon request by SGX-ST within such time as SGX-ST may require.

          Added on 1 July 20161 July 2016.

        • 12A.3.2

          If the Authorized Account holder does not want the identity of any underlying beneficial owner and/or any controlling party of such account to be disclosed to its Trading Member, the Authorized Account holder may apply to the SGX-ST, through its Trading Member, to provide such information as SGX-ST may require directly to SGX-ST.

          Added on 1 July 20161 July 2016.

      • 12A.4 Allocation of Trades to Position Accounts

        • 12A.4.1

          Each TPC Trading Member shall instruct its qualifying Clearing Member to allocate the position of each trade executed by the Trading Member to the Trading Member's Position Account or, where the position is of a trade executed for a customer, in accordance with that customer's instructions, as soon as practicable, and in any event no later than such time as may be required for timely and orderly settlement of such trade into the intended Securities Account.

          Refer to Practice Note 12A.4.1, 12A.5.2.

          Added on 1 July 20161 July 2016.

        • 12A.4.2

          A customer's Position Account must only be used for that customer's positions. However, a TPC Trading Member may instruct its qualifying Clearing Member to sub-allocate a position carried in a Position Account (the "originating Position Account") to another Position Account (the "destination Position Account"), provided that:

          (a)(i) such sub-allocation is in accordance with the instructions of both the account holders of the originating Position Account and destination Position Account (or person(s) authorized to instruct on their behalf); and (ii) the TPC Trading Member receives the booking instruction only after the position has been allocated to the originating Position Account; or
          (b) such sub-allocation is made to remedy an error.

          Added on 1 July 20161 July 2016.

      • 12A.5 Holding trades for different customers in a Position Account and warehousing of trades

        • 12A.5.1

          A Position Account in the name of the Trading Member may be used to hold positions of trades for different customers, provided that the Trading Member has procedures to ensure fair allocation to the customers.

          Added on 1 July 20161 July 2016.

        • 12A.5.2

          If a customer's order is unlikely to be completed during a Market Day, the Trading Member may warehouse the customer's trades until the order is completed. The Trading Member must ensure that no customer's trade is warehoused for more than one Market Day, unless under exceptional circumstances. In such cases, the Trading Member must document the reasons for the extension of time.

          Refer to Practice Note 12A.4.1, 12A.5.2.

          Added on 1 July 20161 July 2016 and amended on 10 December 201810 December 2018.

    • Chapter 13 — Trading Practices and Conduct

      • 13.1 Acting as Principal

        • 13.1.1

          If a Trading Member or its Trading Representative wants to trade as principal with a customer who is not a holder of a Capital Markets Services Licence, the customer must first be informed.

          Amended on 29 December 201429 December 2014.

        • 13.1.2

          This Rule shall apply only to a Trading Member that holds a Capital Markets Services Licence. Any contract note relating to the above transaction must show that the Trading Member or Trading Representative acted as principal.

          Amended on 19 May 201419 May 2014 and 29 December 201429 December 2014.

        • 13.1.3

          This Rule does not apply to trades that are matched on the Trading System without the Trading Member's or Trading Representative's knowledge.

          Amended on 3 April 20083 April 2008.

      • 13.2 Acting as Agent

        • 13.2.1

          When acting as agent, a Trading Member and its Trading Representative must:

          (1) carry out the customer's instructions;
          (2) exercise skill, care and diligence;
          (3) act in good faith;
          (4) act in the best interests of customers, and comply with any obligation for best execution as set out in applicable laws and regulations;
          (5) if asked, disclose all circumstances and risks that could reasonably be expected to affect a customer's decision;
          (6) if asked, inform the customer of the current best bid and offer prices on the Trading System;
          (7) disclose the commission and any benefit directly or indirectly receivable on the transaction;
          (8) not enter into a transaction which may conflict with a duty owed to the customer, unless the customer is informed of the conflict and consents to the transaction; and
          (9) not disclose a customer's order unless:—
          (a) the prior written consent of the customer for the disclosure of the information is obtained;
          (b) the disclosure is for the effective execution of the customer's order;
          (c) the disclosure is necessary for the operations and risk management of the Trading Member if these functions have been outsourced by the Trading Member; or
          (d) the disclosure is required under the law or under the Rules.

          Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 13.2.2

          A Trading Member must ensure that a person to whom it discloses a customer's order under Rules 13.2.1(9)(b) and (c) maintains confidentiality of such information.

      • 13.3 Separation of Customer and Proprietary Trading Activities

        • 13.3.1

          A Trading Member must have procedures to prevent any conflict of interest between its customer trading activities and proprietary trading activities.

      • 13.4 Customer Orders — Precedence

        • 13.4.1

          A Trading Member or a Trading Representative must not deal in securities or trade in futures contracts for his or her own account or for a Prescribed Person's account if the Trading Representative has an unexecuted order on the same terms from a customer. However, this Rule does not apply if:—

          (1) the Trading Member or the Trading Representative does not have access to customer's order flow information while executing for his or her own account or for the Prescribed Person's account;
          (2) the customer has prescribed that the order be executed under specified conditions and the Trading Member or Trading Representative is unable to execute the customer's order by reason of those conditions; or
          (3) the transaction is entered into in prescribed circumstances.

          Refer to Practice Note 13.4.1.

          Amended on 1 July 20051 July 2005, 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 13.4.2

          In this Rule, "Prescribed Person" means:—

          (1) the Trading Representative's Trading Member;
          (2) a Director of the Trading Member;
          (3) an Employee or a Trading Representative of the Trading Member;
          (4) a person, a group of persons, a Corporation or a group of Corporations, or family trusts, whom the Trading Member, Director, employee or Trading Representative of the Trading Member is associated with or connected to.

          Amended on 1 July 20051 July 2005.

        • 13.4.3

          In this Rule, "own account" means an account in which the Trading Member or the Trading Representative has a beneficial interest in.

          Amended on 1 July 20051 July 2005.

      • 13.5 Arrangement with Customers

        • 13.5.1

          A Trading Member or its Trading Representative must not:—

          (1) accept a share in the profits of a customer's account carried on the books of the Trading Member or have any arrangement with a customer to share in the profits of that account;
          (2) have any arrangement with a third party to allocate profits or losses to a customer's account carried on the books of the Trading Member; or
          (3) lead a customer to believe that the customer will not suffer loss as a result of opening an account or dealings.

          Amended on 1 July 20161 July 2016.

      • 13.5A Margin Management for Trading Members In Respect of Any Margins from Customers

        • 13.5A.1

          Where the Trading Member collects margins from the customer in connection with trades executed on SGX-ST, regardless of whether it is required to under the Rules, the following shall apply:

          (1) subject to Rule 19.10.5, nothing in these Rules prohibits a Trading Member from imposing margin requirements, hair-cut rates, payment periods for customers to deposit collateral, valuations of positions and collateral, and making calls for additional margins, as it sees fit;
          (2) if a Trading Member is unable to contact a customer to call for margins, a written notice sent to the customer at the most recent address furnished by the customer to the Trading Member shall be deemed sufficient; and
          (3) where a customer fails to meet such margin that the Trading Member may call from the customer, the Trading Member may take actions as it deems appropriate, without giving notice to the customer, to reduce its exposures to the customer. Such actions may include liquidating all or such part of the customer's collateral deposited with the Trading Member, or taking action to offset all or such part of the customer's positions. SGX-ST may also order such Trading Member to immediately to take such action to offset all or such part of the positions of the customer to rectify the deficiency.

          Added on 21 January 201321 January 2013.

      • 13.6 Unauthorised Trading

        • 13.6.1

          A Trading Representative must not:—

          (1) execute his personal trades in the account of a customer; and
          (2) use a customer's account for third party trading without the customer's prior written authorisation.
      • 13.7 Excessive Trading

        • 13.7.1

          A Trading Member or a Trading Representative, when acting as agent, must not encourage transactions if the sole object is generating commission.

      • 13.8 Market Manipulation and False Market

        • 13.8.1

          A Trading Member or a Trading Representative must not engage in, or knowingly act with any other person in, any act or practice that will or is likely to:—

          (1) create a false or misleading appearance of active trading in any securities or futures contracts; or
          (2) lead to a false market in respect of any securities or futures contracts. For avoidance of doubt, a false market includes a market in which:—
          (a) information is false, exaggerated or tendentious;
          (b) contrived factors are in evidence, such as buyers and sellers acting in collaboration to bring about artificial market prices; or
          (c) manipulative or fictitious orders, transactions or other devices have been employed.

          Refer to Practice Note 13.8.1.

          Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 13.8.2

          The following factors are relevant when considering whether an act or practice may breach Rule 13.8.1:—

          (1) whether the proposed transaction will be inconsistent with the history of, or recent trading in, the security or futures contract;
          (2) whether the proposed transaction will or may cause or contribute to a material change in the market for or the price of the security or futures contract, and whether the person involved or another person with whom the first person is collaborating may directly or indirectly benefit from alterations in the market or price;
          (3) whether the proposed transaction involves the placing of multiple buy and sell orders at various prices higher or lower than the market price, or the placing of buy and sell orders which give the appearance of increased volume;
          (4) whether the proposed transaction will coincide with or is likely to influence the calculation of reference prices, settlement prices and valuations;
          (5) whether parties involved in the proposed transaction are connected;
          (6) whether the buy and sell orders are to be entered at about the same time, for about the same price and quantity (excluding Direct Business);
          (7) whether the proposed transaction will or may cause the price of the security or futures contract to increase or decrease, but following which the price is likely to immediately return to about its previous level;
          (8) whether a proposed bid (offer) is higher (lower) than the previous bid (offer) but is to be removed from the market before it is executed;
          (9) whether the volume or size of the proposed transaction is excessive relative to reasonable expectations of the depth and liquidity of the market at the time;
          (10) whether the proposed buy (sell) order is likely to trade with the entire best offer (bid) volume and part of the offer (bid) at the next price level;
          (11) whether the proposed buy (sell) order forms part of a series of orders that successively and consistently increase (decrease) the price of the security or futures contract; and
          (12) whether there appears to be a legitimate commercial reason for the proposed transaction.

          Refer to Practice Note 13.8.1.

          Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 13.8.3

          A Trading Member or a Trading Representative must not enter a buy order or a sell order on the Trading System if there is an existing opposite order from that same Trading Member or Trading Representative in the same security or futures contract for the same price. This Rule does not apply if:—

          (1) the Trading Member or Trading Representative knows or ought reasonably knows that the orders are for different beneficial owners;
          (2) the order is a type expressly permitted in a practice note published from time to time by SGX-ST as having a legitimate commercial reason and which is unlikely to create a false market; or
          (3) the Trading Member or Trading Representative can otherwise establish that the purpose for which the order was made was not to create a false market.

          Refer to Practice Note 13.8.1.

          Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 13.8.4

          A Trading Member or a Trading Representative must not directly or indirectly deal in securities which involve no change of beneficial ownership as defined in Section 197(5) of the Securities and Futures Act, or knowingly execute, or hold himself out as having executed, an order for the bona fide purchase or sale of futures contracts without having effected a bona fide purchase or sale of futures contracts as defined in Section 207(1) of the Securities and Futures Act. It is a defence if the Trading Member or Trading Representative can show that it, or he or she had no reason to suspect, or no reasonable Trading Member or Trading Representative ought to have suspected or known, that the transaction was a wash sale.

          Amended on 3 April 20083 April 2008, 23 January 200923 January 2009 and 8 October 20188 October 2018.

        • 13.8.5

          A Trading Member or a Trading Representative must not deal in securities or trade in futures contracts in a manner that will or may affect or maintain the price of the securities, futures contract or their underlying, with intent to induce other persons to subscribe for, buy or sell the securities or futures contracts. This Rule does not apply to stabilising action carried out in accordance with Regulation 3 of the Securities and Futures (Market Conduct) (Exemptions) Regulations.

          Amended on 3 April 20083 April 2008, 23 January 200923 January 2009 and 8 October 20188 October 2018.

        • 13.8.6

          A Trading Member or a Trading Representative must not disseminate information that is false or misleading if the Trading Member or Trading Representative:

          (1) knows or ought reasonably knows that the information was false or misleading; or
          (2) is reckless about the truth of the information.
        • 13.8.7

          A Trading Member or a Trading Representative must not participate in any prohibited market conduct in securities or futures contracts or in any insider trading, or knowingly assist a person in such conduct.

          Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 13.8.8

          A Trading Member or a Trading Representative must immediately inform SGX-ST if it or he or she reasonably suspects, or knows of, any attempted market manipulation, creation of a false market or insider trading.

      • 13.9 Record of Orders

        • 13.9.1

          A Trading Member or a Trading Representative must ensure that a daily record of orders received from customers is maintained. The record must show the identity of the Trading Representative, account identification of each customer, the specific order, date and the time the order was received, transmitted, amended, and executed or cancelled. For avoidance of doubt, the record may be kept in the order management system.

        • 13.9.2

          A Trading Member must have a robust system to prevent tampering of the audit trail of orders entered into the Trading System.

      • 13.10 Order Entry Person

        • 13.10.1

          A Trading Member may appoint a person to enter orders on the Trading System on instructions given by a Trading Representative or team of Trading Representatives. A Trading Member must ensure that a Trading Representative is supported by no more than 1 order entry person. For avoidance of doubt, an order entry person who supports a Remisier must be appointed by a Trading Member.

          Amended on 3 April 20083 April 2008.

        • 13.10.2

          A Trading Member must ensure that the order entry person does not:—

          (1) deal in securities or trade in futures contracts;
          (2) exercise any discretion over the entry of orders;
          (3) give investment advice or make recommendations to customers;
          (4) accept instructions from customers;
          (5) communicate with customers regarding settlement; or
          (6) collect cash, cheques or share certificates on behalf of the Trading Member, designated Trading Representative(s) or customers.

          Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.

        • 13.10.3

          A Trading Member must provide SGX-ST with the name and identity card/passport number of the order entry persons appointed.

        • 13.10.4

          A Trading Member must inform SGX-ST in writing if an order entry person ceases to act. If possible, at least 7 days prior notice should be given.

      • 13.11 Responsibility for Orders

        • 13.11.1

          A Trading Member is responsible for the accuracy of all orders entered into the Trading System by its Trading Representatives and any order entry person.

          Amended on 3 April 20083 April 2008.

        • 13.11.2

          A Trading Representative is responsible for the accuracy of orders entered into the Trading System by or on behalf of the Trading Representative.

          Amended on 3 April 20083 April 2008.

        • 13.11.3

          Orders must be entered in accordance with any procedures SGX-ST prescribes.

        • 13.11.4

          A Trading Member must have in place controls to prevent unauthorised changes to order information entered into the Trading System, including Trading Representative identification numbers.

          Added on 18 September 201218 September 2012.

      • 13.12 Identification and Password

        • 13.12.1

          A Trading Representative must have a unique identification number of not more than 3 characters and password to enter orders into the Trading System and must maintain confidentiality of the identification number and password.

          Amended on 3 April 20083 April 2008 and 18 September 201218 September 2012.

        • 13.12.2

          A Trading Member must submit, upon admission, a list of Trading Representative identification numbers and names to SGX-ST, and notify SGX-ST of any amendments to the list on an ongoing basis.

          Added on 18 September 201218 September 2012.

      • 13.13 Off Premises Broking

        • 13.13.1

          Before allowing its Trading Representatives to carry out dealing activities outside its office premises, a Trading Member must inform SGX-ST.

        • 13.13.2

          A Trading Member must inform all customers that Trading Representatives are operating away from its office premises and of any resulting limitations that might affect customer service and get written acknowledgement.

        • 13.13.3

          A Trading Member must ensure its Trading Representatives do not misuse customers' accounts for third party trading. In this regard, contract notes and statements must be sent to the customer's residential address, and not to "care-of" address, "PO Box" address or the Trading Representative's address. However, if the customer chooses otherwise, the Trading Member must explain the risk of unauthorised trading to the customer, get written acknowledgement, and monitor the trading activities for any unauthorised trading in customers' accounts.

        • 13.13.4

          Rules 13.13.1 to 13.13.3 shall apply only to a Trading Member that holds a Capital Markets Services Licence. A Trading Member that holds a licence specified in Rule 4.1.1(1)(b) shall comply with such requirements established by the Relevant Regulatory Authority, if any, and principles of good business practice in relation to carrying out dealing activities outside its office premises.

          Added on 19 May 201419 May 2014 and amended on 29 December 201429 December 2014.

      • 13.14 Miscellaneous

        • 13.14.1

          A Trading Member and a Trading Representative must not knowingly take advantage of a situation arising from:—

          (1) a breakdown or malfunction in any of SGX-ST's procedures or systems; or
          (2) error entries made by SGX-ST or CDP on the Trading System.

          Amended on 3 April 20083 April 2008.

    • Chapter 14 — Supervisory Rules

      • 14.1 Exchange Investigations

        • 14.1.1

          SGX-ST may conduct an investigation if:—

          (1) the investigation involves a possible breach of the Securities and Futures Act, Securities and Futures Regulations, any other relevant applicable laws and regulatory requirements relating to the regulation of markets and licenced entities, Rules, or Directives;
          (2) SGX-ST receives a written complaint involving a Trading Member, Director, Trading Representative, Officer, employee or agent;
          (3) there is a dispute between Trading Members on a trading matter; or
          (4) in SGX-ST's opinion, the circumstances warrant.

          Amended on 19 May 201419 May 2014.

        • 14.1.2

          SGX-ST will conduct an investigation if the Authority directs.

        • 14.1.3

          SGX-ST may require a Trading Member, any of its Directors, Trading Representatives, Officers, employees or agents to:—

          (1) render all assistance as SGX-ST requires, at SGX-ST's premises or elsewhere; and
          (2) provide SGX-ST with information, books and records which, in SGX-ST's opinion, may be relevant to the investigation.
        • 14.1.4

          A Trading Member, Director, Trading Representative, Officer, employee or agent must not wilfully make, furnish or permit the making or furnishing of any false or misleading information, statement or report to SGX-ST.

        • 14.1.5

          SGX-ST may appoint any person or persons to assist in its investigation (the "Exchange Examiners").

        • 14.1.6

          SGX-ST may delegate all or any of its powers under this Rule to the Exchange Examiner. The Exchange Examiner must report the results of the investigation to SGX-ST.

      • 14.2 Exchange Inspections

        • 14.2.1

          SGX-ST may conduct an inspection on a Trading Member at any time, and may appoint any person or persons to conduct the inspection (the "Exchange Inspectors").

        • 14.2.2

          A Trading Member, Director, Trading Representative, Officer, employee or agent must give the Exchange Inspector access to all information, books and records as requested.

        • 14.2.3

          SGX-ST will give a copy of the inspection report to the Trading Member concerned.

        • 14.2.4

          SGX-ST may charge a fee for the inspection. The fee is payable immediately by Trading Members.

      • 14.3 Disciplinary Action

        • 14.3.1

          If an investigation or inspection reveals that a Trading Member, any of its Directors, Trading Representatives, Officers, employees or agents has breached any Rule or Directive, SGX-ST may take any of the following forms of disciplinary action, namely:

          (1) to charge the Trading Member or an Approved Executive Director (or both) before the Disciplinary Committee;
          (2) to make an offer of composition to the Trading Member or an Approved Executive Director (or both) if the Rule violation is indicated in the third column of Schedule A as a compoundable Rule violation; or
          (3) to issue a letter of warning to the Trading Member or an Approved Executive Director (or both).

          Amended on 16 May 201116 May 2011.

        • 14.3.2

          If an investigation or inspection reveals that a Trading Representative may have breached any Rule or Directive, SGX-ST may take any of the following forms of disciplinary action, namely:

          (1) to charge the Trading Representative before the Disciplinary Committee;
          (2) to make an offer of composition to the Trading Representative, if the Rule violation is indicated in the third column of Schedule A as a compoundable Rule violation; or
          (3) to issue a letter of warning to the Trading Representative.

          Amended on 16 May 201116 May 2011.

        • 14.3.3

          If the Trading Member, Approved Executive Director or Trading Representative does not accept the offer of composition or comply with the terms of the composition within the stipulated time as prescribed by SGX-ST, SGX-ST may refer the said Trading Member, Approved Executive Director or Trading Representative to the Disciplinary Committee.

          Added on 16 May 201116 May 2011.

      • 14.3A Composition by SGX-ST

        • 14.3A.1

          SGX-ST may make an offer of composition to a Trading Member, an Approved Executive Director or a Trading Representative who has breached any Rules. The terms of the offer of composition include payment of a specified sum to SGX-ST and may include the fulfillment of any accompanying terms that SGX-ST may prescribe.

          Added on 16 May 201116 May 2011.

        • 14.3A.2

          Upon payment of the specified sum and fulfillment of the accompanying terms within the stipulated time, no further proceedings shall be taken against that Trading Member, an Approved Executive Director or a Trading Representative for that Rule violation.

          Added on 16 May 201116 May 2011.

        • 14.3A.3

          Acceptance of the offer of composition by the Trading Member, an Approved Executive Director or a Trading Representative amounts to an admission of liability and the Trading Member, Approved Executive Director or Trading Representative will be deemed to have committed the conduct described in the charge.

          Added on 16 May 201116 May 2011.

        • 14.3A.4

          In respect of Rule violations which SGX-ST may offer composition, guidelines on the range of composition which SGX-ST may offer to a Trading Member, an Approved Executive Director or a Trading Representative who has committed a Rule violation are indicated in Schedule A.

          Added on 16 May 201116 May 2011.

        • 14.3A.5

          SGX-ST retains the discretion to offer composition to a Trading Member, an Approved Executive Director or a Trading Representative of an amount which is lower or higher than the guidelines, except that the amount of composition that SGX-ST may offer shall not exceed S$10,000 for each Rule violation.

          Added on 16 May 201116 May 2011.

        • 14.3A.6

          Notwithstanding that a Rule violation is indicated as being compoundable or may be compoundable under Schedule A, SGX-ST retains the discretion not to make an offer of composition to the Trading Member, an Approved Executive Director or a Trading Representative and instead, to charge the said Trading Member, an Approved Executive Director or a Trading Representative before the Disciplinary Committee.

          Added on 16 May 201116 May 2011.

        • 14.3A.7

          If SGX-ST has made an offer of composition, it will not commence disciplinary proceedings against a Trading Member, an Approved Executive Director or a Trading Representative until after the stipulated period for the offer lapses.

          Added on 16 May 201116 May 2011.

        • 14.3A.8

          For the purposes of determining whether a Rule violation is classified as a first, second, third or subsequent offence under Schedule A, only previous violations under the same Rule will be taken into consideration.

          Added on 16 May 201116 May 2011.

      • 14.4 Disciplinary Committee

        • 14.4.1

          The Disciplinary Committee comprises persons appointed by the SGX RegCo Board. No Director, Officer or employee of SGX or any of its related corporations may be appointed.

          Amended on 15 September 201715 September 2017.

        • 14.4.2

          The SGX RegCo Board determines the Chairman and Deputy Chairman of the committee. In the absence of the Chairman, the Deputy Chairman will have all the powers of the Chairman.

          Amended on 15 September 201715 September 2017.

        • 14.4.3

          The Disciplinary Committee has a quorum of 3 (including the Chairman) when the meeting proceeds to business but may complete any business of a meeting with 2 members. In the case of an equality of votes, the Chairman of the meeting will be entitled to a casting vote.

        • 14.4.4

          The Chairman will appoint a date, time and place for the hearing. SGX-ST and the person charged must be given reasonable notice of the hearing.

        • 14.4.5

          Members of the Disciplinary Committee must notify the Chairman before, or during, the hearing of any possible conflict of interest in relation to a charge. The Chairman will decide whether the member concerned should attend the hearing of that charge. The Chairman must abstain from hearing a charge in which he may have a conflict of interest.

        • 14.4.6

          The Disciplinary Committee may adjourn and reconvene its proceedings as it thinks fit.

        • 14.4.7

          Except where it is expressly provided in the Rules, the Disciplinary Committee may establish its own procedures.

      • 14.5 Disciplinary Committee Powers

        • 14.5.1

          The Disciplinary Committee may exercise its powers against a Trading Member, an Approved Executive Director or a Trading Representative who:—

          (1) breaches the Securities and Futures Act, Securities and Futures Regulations or relevant applicable laws and regulatory requirements relating to the regulation of markets and licenced entities;
          (2) breaches the Rules or Directives;
          (3) breaches any relevant law or regulation which governs that person's other business activities;
          (4) breaches the rules of any other exchange;
          (5) breaches any provisions involving fraud or dishonesty, whether in or out of Singapore;
          (6) breaches director's duties;
          (7) engages in conduct that has the effect of circumventing the Securities and Futures Act, Securities and Futures Regulations, relevant applicable laws and regulatory requirements relating to the regulation of markets and licenced entities, the Rules, or Directives;
          (8) engages in conduct which is inconsistent with just and equitable principles of trading; or
          (9) engages in conduct detrimental to the financial integrity, reputation or interests of SGX-ST, or markets established or operated by SGX-ST.

          Amended on 19 May 201419 May 2014.

        • 14.5.2

          The Disciplinary Committee may exercise its powers against a Trading Member or an Approved Executive Director (or both) if a Director, Trading Representative, Officer, employee or agent breaches, or causes the Trading Member to breach, the Rules or Directives.

        • 14.5.3

          A former Trading Member, Approved Executive Director or Trading Representative is bound by the Rules in respect of acts or omissions occurring before the registration ended or before expulsion. SGX-ST and the Disciplinary Committee retain their respective jurisdiction notwithstanding registration ending or expulsion.

        • 14.5.4

          The powers of the Disciplinary Committee include:—

          (1) expelling a registered person. The Disciplinary Committee may order a registered person to be expelled notwithstanding that he has resigned;
          (2) suspending a registered person;
          (3) imposing a fine not exceeding S$250,000 on a registered person;
          (4) reprimanding (publicly or privately) a registered person;
          (5) requiring an education program to be undertaken;
          (6) requiring a compliance program to be undertaken;
          (7) imposing any restrictions or conditions on activities that a registered person undertakes;
          (8) requiring reimbursement or compensation to be paid;
          (9) ordering payment of fine by installments;
          (10) ordering a stay of the penalty imposed, pending an appeal to the Appeals Committee;
          (11) requiring any Director to step down from day-to-day conduct of the business affairs of the Trading Member; and
          (12) confirming, changing or discharging the appointment of a Manager under Rule 14.12.2(d).
        • 14.5.5

          Mandatory Minimum Penalties to be Imposed by Disciplinary Committee for certain Rule violations

          (1) Minimum penalties imposable by the Disciplinary Committee have been stipulated in respect of certain Rule violations, as set out in the thirteenth column of Schedule A.
          (2) Where a minimum penalty has been stipulated in respect of a particular Rule violation, if the Disciplinary Committee is satisfied that SGX-ST has proved on a balance of probabilities that the Trading Member, an Approved Executive Director or a Trading Representative has committed the conduct described in the charge, the Disciplinary Committee:
          (a) shall impose a penalty, pursuant to its power under Rule 14.5.4(3), not lower than the minimum amount as stated in the thirteenth column of Schedule A, for that particular Rule violation; and
          (b) may choose to impose, in addition to the penalty in subsection (a), any one or more of the sanction(s) as set out in Rule 14.5.4.

          Added on 16 May 201116 May 2011.

      • 14.6 Disciplinary Committee Proceedings

        • 14.6.1

          SGX-ST will give a person charged a written notice setting out particulars of the charge. In the case of an Approved Executive Director or a Trading Representative, a copy will be given to the Trading Member.

        • 14.6.2 Response to Charge

          (1) The following procedures apply:—
          (a) The person charged may submit a Defence. It must be given to the Secretary of the Disciplinary Committee within 14 days from the date of the Notice of Charge.
          (b) SGX-ST may Respond to the Defence. It must be given to the person charged and the Secretary within 14 days of receipt of the Defence.
          (c) The person charged may Reply to the Response. It must be given to the Secretary within 14 days of receipt of the Response.
          (2) Time to comply with the deadlines may be extended by the Chairman of the Disciplinary Committee or his nominee. A written request for extension must be submitted within the deadline and must set out the grounds. The decision of the Chairman or his nominee is final and binding.
          (3) The Disciplinary Committee may hear a charge and exercise all its powers even if the person charged does not file a Defence or a Reply to the Response, or is not present at the hearing or any adjourned hearing.
        • 14.6.3 Legal Representation before Disciplinary Committee

          (1) SGX-ST and the person charged may be represented by an advocate and solicitor.
          (2) The person charged must tell the Secretary of the Disciplinary Committee in writing of the name of his legal representative at least 14 days before the hearing of the charge.
          (3) The Disciplinary Committee may seek the advice of an advocate and solicitor.
        • 14.6.4 Evidence

          (1) SGX-ST and the person charged may examine, and take copies of, the evidence which each of them intends to rely on at the hearing.
          (2) A person charged and the Trading Member (if applicable) must give SGX-ST a written undertaking not to disclose information received from SGX-ST in relation to the charge to any person, except the legal representative of the person charged for the purpose of the hearing or any appeal.
          (3) A breach of the undertaking constitutes a breach of the Rules.
        • 14.6.5 Witnesses, Examination and Cross Examination

          (1) SGX-ST and the person charged may:—
          (a) examine and cross-examine witnesses; and
          (b) request the attendance of a witness.
          (2) The Disciplinary Committee may, in its absolute discretion:—
          (a) call for the attendance of any witness; and
          (b) allow or disallow a request for the attendance of a witness.
          (3) The Disciplinary Committee cannot compel the attendance of a witness.
        • 14.6.6 Disciplinary Committee's Deliberation

          Unless expressly permitted by the Chairman of the Disciplinary Committee, SGX-ST and the person charged must not be present during the deliberation of a charge by the Disciplinary Committee. Failure to observe this Rule does not vitiate any decision.

        • 14.6.7 Decision of Disciplinary Committee

          (1) SGX-ST and the person charged may be present when the Disciplinary Committee announces its decision.
          (2) The Disciplinary Committee will record short written grounds of decision.
          (3) The Disciplinary Committee will give its written decision to SGX-ST and the person charged.
        • 14.6.8 Notification of Decision

          (1) SGX-ST will notify all Trading Members, Approved Executive Directors and Trading Representatives of all charges established by the Disciplinary Committee (together with such details as SGX-ST thinks appropriate).
          (2) SGX-ST may make the decision public (together with such details as SGX-ST thinks appropriate). For avoidance of doubt, this includes publication of the following information:—
          (a) the particulars of the Trading Member, Approved Executive Director or Trading Representative. In the case of an Approved Executive Director or a Trading Representative, also the particulars of his or her Trading Member at the time;
          (b) the particulars of the charge;
          (c) the underlying facts in respect of the charge;
          (d) the findings and decision of the Disciplinary Committee or the Appeals Committee (as applicable);
          (e) the basis of the findings and decision of the Disciplinary Committee or the Appeals Committee (as applicable); and
          (f) the powers exercised by the Disciplinary Committee or the Appeals Committee (as applicable).
          (3) This Rule operates as irrevocable consent by a Trading Member, an Approved Executive Director and a Trading Representative for SGX-ST to publish or notify a decision. The consent remains valid and effective notwithstanding that the person ceases to be a Trading Member, Approved Executive Director or Trading Representative. A Trading Member, Approved Executive Director or Trading Representative cannot initiate any action or proceeding against SGX-ST or members of the Disciplinary Committee for publishing or notifying a decision under this Rule.

          Amended on 1 January 20051 January 2005.

      • 14.7 Appeals Committee

        • 14.7.1

          The Appeals Committee comprises persons appointed by the Board of Directors of SGX RegCo and approved by the Authority provided that:—

          (a) no Director, Officer or employee of SGX or any of its related companies may be appointed;
          (b) a majority are not directors, officers or employees of the members of SGX or its subsidiaries; and
          (c) a majority are not substantial shareholders of SGX or directors, officers or employees of any substantial shareholder of SGX.

          Amended on 30 November 200530 November 2005. and 15 September 201715 September 2017

        • 14.7.2

          The powers of the Appeals Committee include:—

          (1) all the powers of the Disciplinary Committee;
          (2) increasing or reducing penalties, and overturning, varying or upholding any decision of the Disciplinary Committee;
          (3) hearing appeals in accordance with the Rules; and
          (4) dealing with such other matters as the SGX RegCo Board gives it (either generally or in a particular case).

          Amended on 15 September 201715 September 2017.

        • 14.7.3

          The Appeals Committee elects a Chairman from among the members.

        • 14.7.4

          The Appeals Committee has a quorum of 3 (including the Chairman) when the meeting proceeds to business but may complete any business of a meeting with 2 members. In the case of an equality of votes, the Chairman will be entitled to a casting vote.

        • 14.7.5

          The Chairman will appoint a date, time and place for the hearing. The appellant and the respondent must be given reasonable notice of the hearing.

        • 14.7.6

          Members of the Appeals Committee must notify the Chairman before, or during, the hearing of any possible conflict of interest in relation to an appeal. The Chairman will decide whether the member concerned should attend the hearing of that appeal. The Chairman must abstain from hearing an appeal in which he may have a conflict of interest.

        • 14.7.7

          The Appeals Committee may adjourn and reconvene its proceedings as it thinks fit. If the parties to an appeal are not attending the hearing, the Appeals Committee may hear the appeal by way of a resolution in writing.

        • 14.7.8

          Except where it is expressly provided in the Rules, the Appeals Committee may establish its own procedures.

      • 14.8 Appeals

        • 14.8.1

          SGX-ST or the person charged may appeal against the decision of the Disciplinary Committee.

      • 14.9 Appeals Proceedings

        • 14.9.1 Notice of Appeal and Reply

          (1) The following procedures apply:—
          (a) The Appellant must give a Notice of Appeal (setting out the full grounds of appeal) to the Respondent and the Secretary of the Appeals Committee within 14 days of receipt of the Disciplinary Committee's written decision under Rule 14.6.7(3).
          (b) The Respondent may Respond. It must be given to the Appellant and the Secretary within 14 days of receipt of the Notice of Appeal.
          (c) The Appellant may Reply to the Response. It must be given to the Respondent and the Secretary within 14 days of receipt of the Response.
          (2) Time to comply with the deadlines may be extended by the Chairman of the Appeals Committee or his nominee. A written request for extension must be submitted within the deadline and must set out the grounds. The decision of the Chairman or his nominee is final and binding.
          (3) The Appeals Committee may hear an appeal and exercise all its powers even if the Respondent does not file a Response or either party is not present at the hearing or any adjourned hearing.
        • 14.9.2 Administrative Fee for Appeal

          (1) An appellant (other than SGX-ST) must pay an administrative fee of $1,500 when submitting a Notice of Appeal.
          (2) The administrative fee is not refundable unless:—
          (a) the appellant tells the Secretary of the Appeals Committee in writing of withdrawal of the appeal at least 7 days before the hearing of the appeal;
          (b) the appeal is successful; or
          (c) the Chairman of the Appeals Committee agrees to a refund, whether in full or in part.
        • 14.9.3 Appeals by Rehearing

          (1) The Appeals Committee will determine the appeal by way of rehearing. It will only rehear that part of the decision of the Disciplinary Committee appealed against.
          (2) The Appeals Committee may receive evidence that was not presented to the Disciplinary Committee. In exercising its discretion, the Appeals Committee will consider whether the evidence was available at the time of the hearing by the Disciplinary Committee and why it was not introduced at that time.
        • 14.9.4 Legal Representation Before Appeals Committee

          (1) An appellant and a respondent may be represented by an advocate and solicitor.
          (2) The Secretary of the Appeals Committee must be informed in writing of the name of the legal representative at least 14 days before the hearing of the appeal.
          (3) The Appeals Committee may seek the advice of an advocate and solicitor.
        • 14.9.5 Evidence

          (1) The parties to an appeal may examine, and take copies of, the evidence which each of them intends to rely on at the hearing.
          (2) The undertaking given under Rule 14.6.4(2) applies.
        • 14.9.6 Witnesses, Examination and Cross Examination

          (1) The parties to an appeal may:—
          (a) examine and cross-examine witnesses; and
          (b) request the attendance of a witness.
          (2) The Appeals Committee may, in its absolute discretion:—
          (a) call for the attendance of any witness; and
          (b) allow or disallow a request for the attendance of a witness.
          (3) The Appeals Committee cannot compel the attendance of a witness.
        • 14.9.7 Appeals Committee's Deliberation

          Unless expressly permitted by the Chairman of the Appeals Committee, the parties to an appeal must not be present during the deliberation of an appeal by the Appeals Committee. Failure to observe this Rule does not vitiate the decision.

        • 14.9.8 Decision of Appeals Committee

          (1) The parties to an appeal may be present when the Appeals Committee announces its decision.
          (2) The Appeals Committee will record short written grounds of decision.
          (3) The Appeals Committee will give its written decision to all parties to an appeal.
      • 14.10 Payment of Costs

        • 14.10.1

          The Disciplinary Committee or Appeals Committee may require the Trading Member, Approved Executive Director or Trading Representative charged to pay all or part of the costs of the investigation, inspection or hearing.

        • 14.10.2

          The Committee may order the costs awarded to be paid within 14 days.

      • 14.11 Fine

        • 14.11.1

          A fine must be paid within 14 days from the date of notice, or such longer time as the Chairman of the Disciplinary Committee or the Appeals Committee (as applicable), or his nominee, permits.

        • 14.11.2

          If a fine remains unpaid 7 days after the deadline, the Trading Member's access to markets established or operated by SGX-ST, the Approved Executive Director's registration, or the Trading Representative's registration (as the case may be), is suspended. The suspension ends upon full payment of the fine.

      • 14.12 Interim Powers of SGX-ST

        • 14.12.1

          Action Against Registered Persons

          (1) SGX-ST may suspend, or otherwise restrict the activities of, a Trading Member, an Approved Executive Director or a Trading Representative if the person is charged with:—
          (a) an offence under the Securities and Futures Act or Securities and Futures Regulations or an offence under any other relevant applicable laws and regulatory requirements relating to the regulation of markets and licenced entities;
          (b) an offence involving fraud or dishonesty, whether in or out of Singapore;
          (c) an offence relating to director's duties; or
          (d) an offence under any relevant law or regulation which governs that person's other business activities.
          (2) The suspension or restriction ends if the Trading Member, Approved Executive Director or Trading Representative is acquitted or the charge is not proceeded with.

          Amended on 19 May 201419 May 2014.

        • 14.12.2

          If SGX-ST is of the opinion that:—

          (1) a Trading Member has, or may have, insufficient capital for the conduct of its business; or
          (2) a review should be carried out in respect of a Trading Member's management policies or business conduct in the interests of the Trading Member, SGX-ST, or markets established or operated by SGX-ST,
          SGX-ST may do any or all of the following:—
          (a) require the Trading Member to operate its business subject to such restrictions or conditions as SGX-ST decides;
          (b) suspend the Trading Member for a period SGX-ST decides. The suspension will be announced to all Trading Members. During the suspension, the Trading Member:—
          (i) must not enter into a new transaction without the approval of SGX-ST; and
          (ii) remains liable to complete all contracts outstanding at the time of suspension. However, it must not deliver any securities or settle any transaction without the approval of SGX-ST.
          (c) require any Director to step down from day-to-day conduct of the business affairs of the Trading Member; and
          (d) appoint a Manager to manage the business of the Trading Member. SGX-ST will fix the remuneration of the Manager, which must be paid by the Trading Member. The Trading Member is solely responsible for the Manager's acts and defaults. The Manager must carry out directions given by SGX-ST in relation to the business of the Trading Member, including carrying on the business of the Trading Member in accordance with instructions.
        • 14.12.3 Action Against Defaulters

          (1) SGX-ST may declare a Trading Member to be a defaulter if, in its opinion, the Trading Member:—
          (a) has failed, is unable, or unwilling, to fulfill its obligations to SGX-ST or its customers; or
          (b) is apparently insolvent.
          (2) A Trading Member that commits an act that may result in it being declared a defaulter under Rule 14.12.3(1) must inform SGX-ST immediately. A Trading Member against whom any such act is committed must also inform SGX-ST immediately.
          (3) A Trading Member's access to organised markets established or operated by SGX-ST ceases if it is declared a defaulter. The access may be reinstated by SGX-ST. The Trading Member remains liable to SGX-ST, other Trading Members and its customers for all obligations incurred before its access ceased.
          (4) SGX-ST will notify all Trading Members of the declaration of default and the reinstatement (if applicable).
          (5) SGX-ST may allow an open transaction with a defaulter to be closed as SGX-ST directs.
          (6) Action under this Rule is in addition to other actions which SGX-ST is entitled to take against the Trading Member.

          Amended on 8 October 20188 October 2018.

        • 14.12.4

          Subject to Rule 14.12.5, SGX-ST will notify the Trading Member, Approved Executive Director or Trading Representative in writing before it exercises any of its powers under this Rule.

        • 14.12.5

          If, in SGX-ST's opinion, it is necessary to protect the financial integrity, reputation or interests of SGX-ST, or organised markets established or operated by SGX-ST, it may exercise its powers under this Rule without prior notice to the Trading Member, Approved Executive Director or Trading Representative. SGX-ST will notify the Trading Member, Approved Executive Director or Trading Representative in writing after it has exercised the powers.

          Amended on 8 October 20188 October 2018.

        • 14.12.6

          SGX-ST will refer the matter (together with an account of its exercise of the interim powers) to the Disciplinary Committee for a decision within 14 days of SGX-ST's notification of its actions under this Rule. The Disciplinary Committee proceedings in Rule 14.6 apply. The Disciplinary Committee may expedite the proceedings if it thinks fit. SGX-ST's notification will serve as the written notice under Rule 14.6.1.

      • 14.13 Emergency Powers

        • 14.13.1

          Where SGX-ST deems it necessary or desirable for ensuring a fair and orderly market or for ensuring a safe and efficient clearing facility, or for ensuring the integrity of the market or for proper management of systemic risk in the market, SGX-ST may, in relation to 1 or more Trading Members:

          (1) require that a portion of the positions in respect of Marginable Futures Contract carried in any account(s) on the books of such Trading Member be transferred to the books of 1 or more Trading Members;
          (2) require such Trading Member to liquidate any of the positions carried in any account(s) on its books;
          (3) modify any term in any Contract Specifications, which may include bringing forward the Last Trading Day, or modifying the settlement obligations as set out in Rule 9.4.1;
          (4) require such Trading Member to close any accounts;
          (5) impose such additional capital requirements on such Trading Member as SGX-ST deems necessary or desirable;
          (6) impose such limits and/or conditions to control the activities of such Trading Member as SGX-ST deems necessary or desirable; and
          (7) take such action or require such Trading Member to take such action as SGX-ST deems necessary or desirable.

          Added on 16 September 201616 September 2016.

        • 14.13.4

          Without prejudice to the generality of Chapter 2, SGX-ST shall not be liable to any Trading Member or any other person in respect of any damage, loss, cost or expense of whatsoever nature (whether direct, indirect, special or consequential, including without limitation any loss of business, revenue, goodwill, bargain or profit), suffered or incurred by such Trading Member or third party, arising out of or in connection with the exercise or non-exercise by SGX-ST of its powers under Rule 14.13 or the determination by SGX-ST of the satisfaction or non-satisfaction of any condition for the exercise of such powers.

          Added on 16 September 201616 September 2016.