Whole Section

  • Chapter 4 Listing and Trading of Contracts

    • 4. Introduction to Contracts Traded on the Market

      The Exchange offers Contracts which are broadly divided into Futures Contracts and Option Contracts.

      Amended on 26 November 200726 November 2007.

      • 4.1 Rules Applicable to All Classes of Contracts Listed on the Markets

        • 4.1.1 Listing of Contracts

          Subject to the Act and compliance with the necessary conditions in the Act, the Exchange may list or permit the trading of any Contract on the Markets.

          Amended on 8 October 20188 October 2018.

        • 4.1.2 De-listing of Contracts

          Subject to the Act, the Exchange may, from time to time and in its absolute discretion, de-list any Contract. If there are no Open Positions in the relevant Contract which the Exchange wishes to de-list, any de-listing shall become effective at such time as the Exchange shall determine. If there are Open Positions in the relevant Contract which the Exchange wishes to de-list, the Exchange may require that such Open Positions be cash settled immediately or restrict trading only to enable the Closing Out of those Open Positions, except to the extent that the Exchange deems such trading to be necessary for the maintenance of a fair, orderly and transparent market.

        • 4.1.3 Dormant Contracts

          The Exchange may designate certain Contracts as dormant Contracts for various reasons including extended periods of illiquidity. Such Contracts are currently not available for trading on the Markets but may become available for trading at a future date.

        • 4.1.4 Contract Specifications and Supremacy

          Each Contract shall be governed by this Rules and the relevant Contract Specifications.* In the event of a conflict between this Rules and the Contract Specifications, this Rules shall prevail.

          *Contract Specifications will be posted on the Exchange's website .

        • 4.1.5 Trading Hours, Opening and Closing Routines and Closing Range

          Trades may only be executed during the hours in which the Markets are open for trading. The Markets' normal trading hours for each Contract are set forth in the relevant Contract Specifications. The Exchange may determine for a Contract:

          (a) the duration of trading sessions;
          (b) the opening and closing routines; and
          (c) the closing range.
        • 4.1.6 Trade Matching Algorithms

          Trade matching algorithms may be specific to the Market and the Contract. The applicable trade matching algorithms are set out more fully in the Regulatory Notice. The Exchange may determine the applicable trade matching algorithms for a Contract. If the Exchange wishes to apply a new or different trade matching algorithm to a new or an existing Contract, the Exchange shall notify all Members of its intention to do so via a Regulatory Notice, at least three (3) weeks prior to the application of such algorithm to a Contract.

          Refer to Regulatory Notice 4.1.6.

          Amended on 26 November 200726 November 2007.

        • 4.1.7 Strategy Transactions

          Unless otherwise specified by the Exchange, strategy transactions do not set off stops in any Futures Contract except for strategy stop orders. Members shall not combine outright orders received from different principals and execute the orders as strategy transactions.

        • 4.1.8 Error Trades

          An error trade occurs when a transaction is effected on the Trading System as a result of an error in the entry of a bid or offer that is subsequently matched. The following procedures apply in relation to error trades:

          (a) a Member shall take all necessary steps and exercise due diligence in monitoring trades done for any errors;
          (b) a Member requesting an error trade cancellation or price adjustment shall promptly take all necessary mitigating actions to minimize the losses suffered;
          (c) the error trade policy administered by the Exchange may be specific to the Market or a Contract. The Exchange's error trade policies are set out more fully in the Regulatory Notice.* Upon the occurrence of an error trade, the Exchange retains the discretion to cancel or adjust the price of such error trade in accordance with its error trade policy. The Exchange may impose any condition on the cancellation or price adjustment of an error trade, including the charging of fees for requests to cancel or adjust the price of any error trade;

          * Refer to Regulatory Notice 4.1.8.
          (d) the cancellation or price adjustment of an error trade by the Exchange does not affect the Exchange's right to take any disciplinary action against the Member, Approved Trader or Registered Representative who was responsible for the error trade.

          For the avoidance of doubt, the Exchange is not liable for any loss or damage (including consequential loss or damage) which may be suffered as a result of the cancellation or price adjustment of an error trade in accordance with this Rule 4.1.8.

          Amended on 26 November 200726 November 2007, 19 January 201519 January 2015 and 14 November 201614 November 2016.

        • 4.1.9 Withholding and Order Withdrawal

          A Member, Approved Trader or Registered Representative shall not withhold or withdraw from the Trading System any Customer's order or any part of a Customer's order for any reason, unless it is for the benefit of the Customer or pursuant to the Customer's instruction.

          Refer to Practice Note 4.1.9.

          Amended on 14 November 201614 November 2016.

        • 4.1.10 Cross Trades

          A Member or Approved Trader who knowingly receives buy and sell orders from different Customers at the same time and price, for the same Contract Month of the same Contract, shall first expose the leg which is the better bid or offer than the prevailing bid or offer in the Trading System. If there is no prevailing bid or offer, the Member or Approved Trader shall first expose the leg which has the better price than the last traded price, or if there is no last traded price, the last settlement price. This Rule 4.1.10 does not apply if the orders are entered by:

          (a) different Approved Traders on behalf of different Customers; or
          (b) different Customers directly into the Trading System and the Member or its Approved Trader does not know or have access to that Customer's order flow information.

          However, if the Exchange suspects that a cross trade was pre-arranged in either one of the above circumstances in contravention of Rule 4.1.13, the onus is on the Member or the Approved Trader to show otherwise.

          Refer to Practice Note 4.1.10.

          Amended on 14 November 201614 November 2016.

        • 4.1.11 Negotiated Large Trades

          The Exchange may, from time to time, designate and approve a Contract for Negotiated Large Trade transactions. Contracts eligible for Negotiated Large Trade transactions shall comply with the minimum volume thresholds, related notification requirements and such other procedures as prescribed by the Exchange from time to time.

          Refer to Regulatory Notice 4.1.11.

        • 4.1.12 Exchange of Underlying for Futures Contracts

          An exchange of Underlying for Futures Contracts shall be permitted upon the satisfaction of the following conditions:

          (a) the transaction is between two parties where one party is the buyer of the Underlying and the Seller of the Futures Contract and the other party is the seller of the Underlying and the Buyer of the Futures Contract;
          (b) the seller of the Underlying has in its possession the Underlying to be delivered;
          (c) the purchase and sale of the Futures Contract shall be simultaneous with the sale and purchase of an equal quantity of the Underlying;
          (d) the transaction is at a price mutually agreed by the transacting parties; and
          (e) the transaction is reported to the Exchange, and the Members maintain a complete record of such transactions together with the relevant memoranda.
        • 4.1.13 Pre-arranged Trades Prohibited

          A Member or Approved Trader shall not make any purchase or sale which has been pre-arranged except for:

          (a) an exchange of Underlying for Futures Contracts as contemplated in this Rules; or
          (b) a Negotiated Large Trade as contemplated in this Rules.

          For the avoidance of doubt, a request for a quote from a designated market maker approved by the Exchange does not constitute a pre-arranged trade.

        • 4.1.14 Contract Settlement

          Settlement of Contracts may either be via cash or physical delivery.

        • 4.1.15 Price Limits and Cooling Off

          The Exchange may prescribe, for certain Contracts, Price Limits which are designed to temporarily restrict trading when the Market(s) becomes volatile. "Price Limit" refers to the maximum price advance or decline during any trading session(s), as provided under the relevant Contract Specifications, upon which the Exchange may signal a Cooling Off Period.

          Save as provided in the relevant Contract Specifications, the Price Limits for a Contract will not apply to a trade in that Contract if it is executed as part of a strategy transaction whereby trades in two or more Contracts that are related to each other are executed simultaneously as a unit on the strategy order book.

          With respect to an Option Contract, trading in the Option Contract shall be halted:

          (a) for the duration of the Cooling Off Period in the underlying Futures Contract; or
          (b) as prescribed in the Contract Specifications.

          "Cooling Off Period" means such period as set forth in the relevant Contract Specifications during which each Contract may be traded at or within its Price Limits. Trading may resume upon the lapse of the Cooling Off Period, for the remainder of the Trading Day, or such other period as may be prescribed in the relevant Contract Specifications.

          Amended on 26 January 200726 January 2007, 16 July 201216 July 2012 and 14 November 201614 November 2016.

        • 4.1.16 Trading Halt

          In the event that trading in the Underlying is halted, or where there has been a major market movement without any apparent economic or fundamental basis for the movement to have occurred, the Exchange may declare a trading halt in the relevant Contract. This is irrespective of whether trading in the Contract has reached the Price Limits.

        • 4.1.17 Position Limits

          The Exchange may, from time to time, establish limits on the positions owned or controlled by any Person or Persons acting in concert with respect to any Contract. A Clearing Member may apply on behalf of any Person for an increase in that Person's position limits in applicable Contracts, subject to the conditions set forth in the Clearing Rules.

          Amended on 3 August 2020.

        • 4.1.17A Position Accountability

          1. The Exchange may establish position accountability thresholds on the positions owned or controlled by any Person or Persons acting in concert with respect to any Contract where limits on positions are not applied.
          2. Upon request by the Exchange, a Member shall provide information, including but not limited to, the nature and size of the position, the trading strategy employed with respect to the position, and hedging information (if applicable), of any Person or Persons acting in concert with respect to any Contract when such position accountability thresholds have been exceeded.

          Added on 3 August 2020.

        • 4.1.18 Accumulation of Positions

          With respect to the computation of position limits and position accountability, the positions of all accounts directly or indirectly owned or controlled by a Person or Persons, and the positions of all accounts of any Person or Persons acting in concert and the positions of all accounts in which a Person or Persons have a proprietary or beneficial interest, shall be accumulated and deemed to be positions of each of such Persons as if each owned or controlled all the accumulated positions individually. The Exchange may from time to time provide exemptions to this Rule 4.1.18.

          Amended on 3 August 2020.

        • 4.1.18A Reduction of Positions

          Where any person has exceeded such position limits imposed or approved by the Clearing House, or exceeds such position accountability thresholds, the Exchange, if it deems it necessary in the interest of maintaining a fair, orderly and transparent market, may subject the Member to one or more of the following:

          1. to cease any further increase in the person’s positions;
          2. to liquidate the person’s positions to comply with the position limits or to reduce it below the position accountability thresholds within such time as may be prescribed by the Exchange; or
          3. to trade under such conditions and restrictions as the Exchange may consider necessary to ensure compliance with the prescribed position limits or to reduce the positions below such position accountability thresholds.

          Added on 3 August 2020.

        • 4.1.19 Daily Settlement Price

          The Daily Settlement Price for each Contract shall be determined by the Clearing House in accordance with the relevant formulae and procedures set out in the relevant Contract Specifications.

        • 4.1.20 Final Settlement Price

          The Final Settlement Price for each Contract shall be determined by the Exchange and the Clearing House in accordance with the relevant formulae and procedures set out in the relevant Contract Specifications. The Final Settlement Price so determined by the Exchange and Clearing House shall be final. If a situation is developing or has developed, which prevents the Exchange or the Clearing House from declaring the Final Settlement Price in accordance with the relevant Contract Specifications, the Exchange and Clearing House shall resolve the Final Settlement Price by such other means as they deem fit.

        • 4.1.21 Modification of Contract Specifications

          The Exchange may modify Contract Specifications in response to market developments. In the event of such modification the Exchange shall provide its Members with no less than two (2) weeks' prior notice before any modification to Contract Specifications takes effect. For the avoidance of doubt, modifications to the calculation of the Final Settlement Price, Price Limits, position limits, accumulation of positions and delivery obligations set forth in any Contract Specifications shall be subject to public consultation and rule amendment procedures as contemplated in the Act.

        • 4.1.22 Emergencies

          (1) If, in the opinion of the Exchange, any Emergency or circumstances calling for emergency action in the interests of maintaining a fair, orderly and transparent market or due performance of a Contract has developed or is developing, the Exchange may take such steps as it sees fit to provide for, correct or check the further development of those circumstances. These steps include the curtailment of trading in any Contract, revocation or suspension of access to the Trading System, suspension of trading in a Market, deferment of delivery under any deliverable Futures Contract, designation of alternate delivery points or the modification of Contract Specifications.
          (2) Without prejudice to the generality of Chapter 1, the Exchange 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 other Person, arising out of or in connection with the exercise or non-exercise by the Exchange of its powers under Rule 4.1.22 or the determination by the Exchange of the satisfaction or non-satisfaction of any condition for the exercise of such powers.

          Amended on 26 April 201326 April 2013 and 14 November 201614 November 2016.

        • 4.1.23 Revocation or Suspension of Access to the Trading System

          The Exchange may revoke or suspend access to the Trading System for such period or periods as the Exchange may determine, if, in the opinion of the Exchange, it is necessary or desirable for the maintenance of a fair, orderly and transparent market.

          Amended on 14 November 201614 November 2016.

      • 4.2 Default Relating to Contracts

        • 4.2.1 Default in a Cash Settled Futures Contract or Option Contract

          A Buyer or Seller who fails to settle a cash settled Futures Contract or Option Contract, as contemplated under this Rules or the Clearing Rules, shall be in default. In the event of default at Settlement of a cash settled Futures Contract or Option Contract on the part of a Buyer or Seller, the Member shall, unless otherwise provided in this Rules or the Clearing Rules, have the right of Closing Out any Open Position in any Market on behalf of the Buyer or Seller, without further notice and without in any way prejudicing any other legal action for recovery which the Member may take or has taken.

        • 4.2.2 Default in a Deliverable Futures Contract

          A Seller of a deliverable Futures Contract who does not effect delivery as required by this Rules or the Contract Specifications, and a Buyer of a deliverable Futures Contract who does not take delivery as required by this Rules or the Contract Specifications, shall be in default. In the event of default at Settlement of a deliverable Futures Contract, the rights and obligations of the Member of the Buyer or Seller who is in default, shall be as specified in the relevant Contract Specifications.

      • 4.3 Rules Applicable to Option Contracts

        • 4.3.1 Types of Option Contracts

          Option Contracts may be:

          (a) call options or put options; and
          (b) deliverable or cash settled.
        • 4.3.2 Cash Settled Call Option Contract

          In the case of a cash settled call Option Contract:

          (a) the Buyer (taker) of the Option Contract acquires the right to receive an amount equivalent to the difference between the exercise price of the Option Contract and the settlement price in consideration for a contract premium, if the settlement price is higher than the exercise price; and
          (b) in the event that the Buyer of the Option Contract exercises that right, a Seller (grantor) as appointed by the Clearing House in accordance with the Clearing Rules assumes the obligation to pay the amount referred to in Rule 4.3.2(a) to the Buyer.
        • 4.3.3 Cash Settled Put Option Contract

          In the case of a cash settled put Option Contract:

          (a) the Buyer (taker) of the Option Contract acquires the right to receive an amount equivalent to the difference between the exercise price of the Option Contract and the settlement price in consideration for a contract premium, if the settlement price is lower than the exercise price; and
          (b) in the event that the Buyer of the Option Contract exercises that right, a Seller (grantor) as appointed by the Clearing House in accordance with the Clearing Rules assumes the obligation to pay the amount referred to in Rule 4.3.3(a) to the Buyer.
        • 4.3.4 Deliverable Call Option Contract

          In the case of a deliverable call Option Contract:

          (a) the Buyer (taker) of the Option Contract acquires the right to a long futures position in the underlying Futures Contract specified in the contract unit in the relevant Contract Specifications in consideration for a contract premium;
          (b) in the event that the Buyer of the Option Contract exercises that right, a Seller (grantor) as appointed by the Clearing House in accordance with the Clearing Rules shall be vested with a short futures position in the underlying Futures Contract at the same price and in the same settlement month as that assumed by the Buyer of the Option Contract; and
          (c) the Buyer acquires the right to a long futures position at an exercise price agreed between the parties, provided that it is selected from a list of such prices determined under the relevant Contract Specifications.
        • 4.3.5 Deliverable Put Option Contract

          In the case of a deliverable put Option Contract:

          (a) the Buyer (taker) of the Option Contract acquires the right to a short futures position in the underlying Futures Contract specified in the contract unit in the relevant Contract Specifications in consideration for a contract premium;
          (b) in the event that the Buyer of the Option Contract exercises that right, a Seller (grantor) as appointed by the Clearing House in accordance with the Clearing Rules shall be vested with a long futures position in the underlying Futures Contract at the same price and in the same settlement month as that assumed by the Buyer of the Option Contract; and
          (c) the Buyer acquires the right to a short futures position at an exercise price agreed between the parties, provided that it is selected from a list of such prices determined under the relevant Contract Specifications.
        • 4.3.6 American Style and European Style

          The Contract Specifications shall indicate whether an Option Contract is an American Style Option or a European Style Option. An "American Style Option" is an Option Contract that can be exercised at any time before its expiry. A "European Style Option" is an Option Contract that can only be exercised at expiry. This Rules applies to both American Style Options and European Style Options.

        • 4.3.7 Cash Settled Option Contracts which are in-the-Money

          A cash settled Option Contract is in-the-money if the settlement price lies above the exercise price in the case of a call Option Contract, or below the exercise price in the case of a put Option Contract.

        • 4.3.8 Exercise/Expiry of All Option Contracts on Expiration Day

          On the Expiration Day of both cash settled and deliverable Option Contracts, the Clearing House shall, unless otherwise directed by the holder of the Option Contract or otherwise stated in the relevant Contract Specifications:

          (a) exercise all in-the-money Option Contracts; and
          (b) allow all other Option Contracts to expire.

          Amended on 16 July 201216 July 2012.