Chapter 11 — Capital and Financial Requirements

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Chapter 11 — Capital and Financial Requirements

Rule Violation

Whether composition may be offered

Composition Amount which may be Offered by SGX-ST, where SGX-ST has Determined the Trading Member, Approved Executive Director and/or Trading Representative to be Liable

Mandatory minimum penalty imposable by the Disciplinary Committee

Rule Chapter/Number

Brief Description of Rule

Trading Members (or Designated Market Maker, where applicable)

Approved Executive Directors

Trading Representatives (or Market Making Representative, where applicable)

1st Violation

2nd Violation

3rd Violation

1st Violation

2nd Violation

3rd Violation

1st Violation

2nd Violation

3rd Violation

Chapter 11 — Capital and Financial Requirements

11.2

Base Capital Requirement

11.2.1

Trading Member not to cause or permit its base capital or net head office funds to fall below the base capital requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.2.3

Trading Member to notify SGX-ST in the case of failure to comply or awareness of impending failure to comply with the base capital requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.2.4

Trading Member to comply with SGX-ST's requirements when base capital or net head office funds fall below the base capital requirement.

Not Compoundable

N.A.

$10,000

11.2A

Net Liquid Capital

11.2A.1

Trading Member not to cause or permit its net liquid capital to fall below the net liquid capital requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.2A.3

Trading Member to notify SGX-ST in the case of failure to comply or awareness of impending failure to comply with the net liquid requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.2A.4

Trading Member to comply with SGX-ST's requirements when net liquid capital falls below the net liquid capital requirement.

Not Compoundable

N.A.

$10,000

11.3

Financial Resources Requirement

11.3.1

Trading Member not to cause or permit its financial resources or adjusted net head office funds to fall below its total risk requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

[deleted]

11.3.5

Trading Member to notify SGX-ST in the case of failure to comply or awareness of impending failure to comply with the financial resources requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.3.6

Trading Member to comply with SGX-ST's requirements when the financial resources of adjusted net head office funds fall below the total risk requirement.

Not Compoundable

N.A.

$10,000

11.3.7

Trading Member to notify SGX-ST when financial resources or adjusted net head office funds fall below 120% of its total risk requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.3.8

Trading Member to comply with SGX-ST's requirements when financial resources or adjusted net head office funds fall below 120% of total risk requirement.

Not Compoundable

N.A.

$10,000

11.3.9

Trading Member to notify SGX-ST when financial resources or adjust head office funds falls below 150% of its total risk requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.3.10

Trading Member to comply with SGX-ST's requirements, when financial resources or adjusted net head office funds fall below 150% of its total risk requirement

Not Compoundable

N.A.

$10,000

11.4

Aggregate Indebtedness Requirement

11.4.1

Trading Member not to cause or permit the aggregate indebtedness to exceed 1200% of aggregate resources.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.4.2

Trading Member to notify SGX-ST of failure to comply or awareness of impending failure to comply with the aggregate indebtedness requirement.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.4.3

Trading Member to comply with SGX-ST's requirements when aggregate indebtedness exceeds 1200% of the aggregate resources.

Not Compoundable

N.A.

$10,000

11.4.4

Trading Member to notify SGX-ST if aggregate indebtedness exceeds 600% of aggregate resources.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.4.5

Trading Member to comply with SGX-ST's requirements when aggregate indebtedness exceeds 600% of aggregate resources.

Not Compoundable

N.A.

$10,000

11.5

Powers to Impose Other Requirement

11.5.1

Trading Member to comply with additional requirements prescribed by SGX-ST.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.7

Exposure to Single Customer

11.7.1

Trading Member to notify SGX-ST if TM's exposure to a single customer exceeds 20% of its average aggregate resources.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

Trading Member to comply with SGX-ST's direction to reduce risk exposure to single customer.

Not Compoundable

N.A.

$10,000

11.7A10

Other Requirements for Exposure to Single Customer

11.7A.1

Trading Member to have in place adequate tools and procedures to monitor exposure to a single customer.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

Trading Member to comply with SGX-ST's direction to demonstrate adequacy of tools and procedures.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.7A.2

Trading Member to notify SGX-ST if TM's exposure to a single customer exceeds its internal threshold.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.8

Exposure to Single Security

11.8.1

Trading Member to notify SGX-ST if the TM's exposure exceeds the stipulated limits.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.8.2

Trading Member to comply with risk management requirements imposed by SGX-ST to reduce risk exposure to a single security.

Not Compoundable

N.A.

$10,000

11.8.8

Trading Member not to permit exposure to a suspended security quoted on SGX-ST or recognised group A securities exchange above the stipulated limit.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.8A

Other Requirements for Exposure to Single Security

11.8A.1

Trading Member to have in place adequate tools and procedures to monitor exposure to a single security.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

Trading Member to comply with SGX-ST's direction to demonstrate adequacy of tools and procedures.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.8A.2

Trading Member to notify SGX-ST if TM's exposure to a single security exceeds its internal threshold.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9

Margin Rules

11.9.1A(2)

Trading Member to comply with such requirements prescribed by the Relevant Regulatory Authority.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

Trading Member to notify SGX-ST of changes to requirement prescribed by the Relevant Regulatory Authority.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.2

Trading Member to obtain written agreement for margin account arrangements.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.3

Trading Member to obtain the specified authorisation and discretion from its customer

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.4

Trading Member not to cause or permit a new transaction in the customer's margin account when equity limit stipulated is not met

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.5

Margins deposited by the customer to a Trading Member to be in the acceptable form

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.6

Trading Member not to cause or permit the equity in a customer's margin account to fall to or below the stipulated limit, and had not required the customer to provide additional margin

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.8

Trading Member to conduct daily review of all margin accounts in the prescribed manner

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.10

Trading Member not to allow customers to withdraw cash or securities from their accounts when the equity is below 140%.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.11(1)

Trading Member not to cause or permit the the aggregate of the margin exposures of all customers to exceed the stipulated limit

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.11(2)

Trading Member not to cause or permit the aggregate of the margin exposures of all customers in respect of securities, other than securities quoted on SGX-ST, to exceed the stipulated limit

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.11(3)

Trading Member not to cause or permit the debit balance in each customer's margin account to exceed the stipulated limit.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.13

Transactions in a margin account to be on an immediate or ready basis.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.14

Trading Member to apply discounts prescribed by SGX-ST in computing the market value of securities.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.9.15

Trading Member to comply with SGX-ST's requirements for margin financing transactions.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.11

Annual Financial Audit

11.11.1

Trading Member to obtain SGX-ST's prior approval for any change of its existing external auditors, or to notify SGX-ST by the prescribed time, as applicable.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

11.11.1A

Trading Member to comply with SGX-ST's direction for the removal and appointment of another external auditor.

Not Compoundable

N.A.

$10,000

11.12

Provision in annual accounts

11.12.1

Trading Member to make provisions in its annual accounts as required by SGX-ST.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.13

Other financial requirements

11.13.1

Trading Member not to reduce its paid-up ordinary share capital without prior written approval of SGX-ST.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.13.2(1)

Trading Member to notify SGX-ST prior to the issue of any preference share.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.13.2(2)

Trading Member not to redeem any redeemable preference shares when the necessary conditions are not met.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.13.3(1)

Trading Member to obtain prior approval of SGX-ST if it enters a subordinated loan agreement in a format other than prescribed format

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.13.3(2)

Trading Member to notify SGX-ST of the drawing down of a qualifying subordinated loan by the prescribed time.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

11.13.3(3)

Trading Member not to repay any subordinated loan principal before the maturity date without prior approval of SGX-ST.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.13.3(4)

Trading Member not to repay any subordinated loan principal that has matured when the stipulated conditions are not met.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.13.4

Trading Member not to make any unsecured loan or advance, payment of dividend or increase in director's remuneration when conditions are not met.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.13.5

Trading Member to notify SGX-ST immediately of any actions taken relating to the prescribed activities.

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

11.14

Register of Connected Persons

11.14.1

Trading Member to keep register of connected persons.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

Added on 16 May 2011 16 May 2011 and amended on 19 May 2014 19 May 2014 and 29 December 2014 29 December 2014.