Chapter 12 — Operational Requirements

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Chapter 12 — Operational 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 12 — Operational Requirements

12.1

Records

12.1.1(1)

Trading Member, Director or Trading Representative to maintain complete and accurate records in accordance with the SFA and/or SFR, or requirements prescribed by the Relevant Regulatory Authority, as applicable.

Not Compoundable

[Unless otherwise specified in this Schedule]

Not Compoundable

$10,000

Trading Member, Director or Trading Representative to maintain complete and accurate records in accordance with the Rules

Compoundable

[Unless otherwise specified in this Schedule]

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

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

Not Compoundable

N.A.

$10,000

12.1.1(2)

Trading Member, Director or Trading Representative not to make false or misleading entries.

Not Compoundable

$10,000

12.1.1(3)

Trading Member, Director or Trading Representative to make all material entries in any Document.

Not Compoundable

$10,000

12.1.1(4)

Trading Member, Director or Trading Representative not to alter or destroy any Documents.

Not Compoundable

$10,000

12.1.2

Trading Member, Director or Trading Representative to ensure integrity, security and confidentiality in the transmission and storage of records.

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

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

12.1.3

Trading Member to make records available to SGX-ST as required

Not Compoundable

N.A.

$10,000

12.2

Confidentiality of customer's information

12.2.1

Trading Member and Trading Representative to maintain confidentiality of customer's information.

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

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

12.2.2

Failure to ensure that a person to whom customer's information is disclosed maintains confidentiality.

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

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

12.3

Customer accounts

12.3.1(1)

Trading Member to obtain the necessary particulars before opening an individual customer account.

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.

12.3.1(2)

Trading Member to verify customer's identity and intention when account is not opened in person.

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.

12.3.2(1)

Trading Member to obtain the necessary particulars before opening a corporate customer account.

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.

12.3.2(2)

Trading Member to obtain a certified true copy of the certificate of incorporation of the customer before opening a corporate customer account

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.

12.3.2(3)

Trading Member to obtain the necessary documents before opening a corporate customer account

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.

12.3.3

Trading Member to have on file the necessary particulars and/or documents for opening an agency account.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.3.4(1)

Trading Member to allow customers to open a joint account only if the specified conditions are met

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.3.4(2)

Trading Member not to permit a joint account to be operated by more than 2 individuals

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.3.4(3)

Trading Member to maintain the necessary information for the operation of a joint account.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.3.4(4)

Trading Member to require each joint account holder to specify whether he/she is jointly and severally liable for debts incurred in the joint account.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.3.5

Customer accounts to be approved in the stipulated manner.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.3.6

Trading Member to obtain a written risk acknowledgement statement from a customer in accordance with the SFA and/or SFR, or requirements prescribed by the Relevant Regulatory Authority, as applicable..

Not Compoundable

N.A.

$10,000

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

Not Compoundable

N.A.

$10,000

12.3.7(1)

Trading Member to 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.

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

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

12.3.7(2)

Trading Member to identify and designate each Trading Account by the full name of the customer(s) whose account is carried on the books of the Trading Member and by a unique Trading Account code, which must be reported to SGX-ST prior to any order.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

$250

$500

$1,000

N.A.

12.3.9

[deleted]

12.3A

Customer Education

12.3A.1

Trading Member to provide online customers with adequate information on specific areas

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.4

Trading Authority

12.4.1

Trading Member to obtain written authorisation from the customer before accepting orders from a third party.

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.

12.5

Brokerages and Charges

12.5.1

Commission rate chargeable to comply with specified rates, if so 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.

12.5.2

Trading Member to disclose charges and expenses to be borne by the customer.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.6

Contract Notes

12.6.1

Trading Member to send customer a contract note for purchase and sale of securities or Futures Contracts.

Not Compoundable

N.A.

12.6.2

Trading Member to state on the contract note that the contract is subjected to the Rules and Directives of SGX-ST.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.6.3(1)

Trading Member to include information in the contract note in accordance with SFR.

Not Compoundable

N.A.

Trading Member to show separately in the contract note, the stipulated fees, tax and charges.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.6.3(2)

Trading Member to obtain customer's consent before issuing contract notes in electronic 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.

12.6.4

[deleted]

Trading Member to comply with such requirements prescribed by the Relevant Regulatory Authority in respect of contract notes.

Not Compoundable

N.A.

Trading Member to comply with such requirements prescribed by the Relevant Regulatory Authority before sending contract notes in electronic 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.

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

Not Compoundable

N.A.

[deleted]

12.6.7

Trading Member to produce contract notes to SGX-ST in the same form as when given to customers.

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.

12.7

Statement of Account to Customers

12.7.1

Trading Member to send customer a statement of account on a regular basis, as may be required under the Securities and Futures Act, or any Regulation made thereunder.

Not Compoundable

N.A.

$10,000

12.7.2(1)

Trading Member to include information in the statement of account in accordance with SFR.

Not Compoundable

N.A.

Trading Member to include any other information in the statement of account as 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.

Trading Member to obtain customers' consent before sending statement of account in electronic 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.

12.7.2(2)

Trading Member to comply with such requirements prescribed by the Relevant Regulatory Authority in respect of statements of account.

Not Compoundable

N.A.

Trading Member to comply with such requirements prescribed by the Relevant Regulatory Authority before sending statement of account in electronic 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.

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

Not Compoundable

N.A.

$10,000

12.7.3

[Deleted]

12.7.5

Trading Member to produce statement of accounts to SGX-ST in the same form as when given to customers.

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.

12.8

Amendment of Contract

12.8.1

Trading Member to amend contract only if there is a valid reason.

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.

12.8.2

Amendment of contract to be approved by the specified persons

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.

12.8.3

Approval to be given before contract is amended

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.

12.9

Communication with Third Parties

12.9.1

Trading Member to communicate directly with customers.

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.

12.9.2

Trading Member not to allow a third party to collect cash or stipulated documents without written authorisation.

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.

12.10

Payment to Customers

12.10.1

All cheques to customers to be crossed unless stipulated conditions are 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.

12.10.2

Trading Member not to accept a house cheque unless the stipulated conditions are 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.

12.10A

Customer's Money and Assets

12.10A.1

Trading Member to meet the stipulated fiduciary obligations to its Customers

Not Compoundable

N.A.

$10,000

12.10A.2(2)

Trading Member to comply with such requirements prescribed by the Relevant Regulatory Authority in respect of stipulated fiduciary obligations.

Not Compoundable

N.A.

$10,000

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

Not Compoundable

N.A.

$10,000

12.11

Customer's and Remisier's Money

12.11.1

Trading Member to comply with the stipulated provisions in the Securities and Futures (Licensing and Conduct of Business) Regulations 2002.

Not Compoundable

N.A.

$10,000

12.11.2

Trading Member to deposit all money received on account of a Remisier in a trust account.

Not Compoundable

N.A.

$10,000

12.11.3

Trading Member to designate the accounts maintained with a financial institution as a trust account, or customer or Remisier account, as the case may be.

Not Compoundable

N.A.

$10,000

12.11.5

Trading Member not to commingle money received with Trading Member's own funds.

Not Compoundable

N.A.

$10,000

12.11.6

Trading Member not to withdraw Remisier's money from a trust account when the prescribed conditions are not met.

Not Compoundable

N.A.

$10,000

12.11.7

Trading Member to notify the Remisier of the withdrawal made by the next business day

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.

12.12

Customer's and Remisier's Assets

12.12.1

Trading Member to comply with the stipulated provisions in the Securities and Futures (Licensing and Conduct of Business) Regulations 2002.

Not Compoundable

N.A.

$10,000

12.12.3

Trading Member to designate accounts maintained with a financial institution as a trust account, customer, or Remisier account.

Not Compoundable

N.A.

$10,000

12.12.4

Trading Member to deposit assets of its customers in a separate custody account from Remisiers

Not Compoundable

N.A.

$10,000

12.12.5

Trading Member not to commingle assets of a customer or Remisier, with Trading Member's own assets.

Not Compoundable

N.A.

$10,000

12.12.6

Trading Member not to withdraw remisier's assets from a custody account when the prescribed conditions are not met.

Not Compoundable

N.A.

$10,000

12.12.7

Trading Member to notify the Remisier of the withdrawal of assets by the next business day

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.

12.13

Reporting of Delinquent Accounts.

12.13.1

Trading Member to inform SGX-ST of the particulars of delinquent accounts.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.14

Separation of Front Office and Back Office Functions

12.14.1

Trading Member to separate front and back office functions.

Not Compoundable

N.A.

$10,000

12.15

Stock Account

12.15.1

Trading Member to make trades of securities or Futures Contracts for the Trading Member's proprietary account under a separate stock account.

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.

12.15.2

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

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.

12.15.3

Trading Member not to allow a Remisier to operate a Stock Account.

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.

12.16

Suspense Account

12.16.1(2)

[deleted]

12.16.1(3)

[deleted]

12.16.2

[deleted]

12.16.3

[deleted]

12.16.4

[deleted]

12.17

Trading by Employees and Agents

12.17.1

Trading Member to require a Director, Officer, Dealer and employee to obtain prior written approval for each trade

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.

12.17.2

Trading Representative not to execute an order for the stipulated accounts without proper written authorisation.

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

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

12.17.3

Trading Member to require Director, Officer, Trading Representative, employees to trade through the Trading Member.

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.

12.17.4

Trading Member not to buy or sell securities or Futures Contracts for Director, Officer, Trading Representative, employees of another Trading Member without prior written approval of that Trading Member.

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.

12.17.5

Trading Member to put in place procedures to ensure that agents who are privy to confidential information do not use the information to trade for their own benefit.

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.

12.17.6

Trading Member to put in place procedures to monitor trading activities of Director, Officer, Trading Representative, employees.

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.

12.18

Compliance Review

12.18.2

Trading Member to carry out checks through stipulated department/person.

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.

12.18.1

Trading Member to carry out checks to ensure compliance with all regulatory requirements.

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.

12.19

Advertising

12.19.1

Trading Member to ensure that advertising or publicity adheres to the stipulated requirements.

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.

12.19.2

Trading Member that holds a licence specified in Rule 4.1.1(1)(b) not to direct advertising or publicity to Customers domiciled in Singapore.

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.

12.20

Soft Dollar Commissions

12.20.1

Trading Member and Trading Representatives not to receive goods and services from a broker when the stipulated criteria 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

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

12.20.2

Trading Member not to pay for goods and services to customers when the stipulated criteria 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.

12.21

Use of Office Premises

12.21.1

Trading Member not to allow unauthorised persons to use the Trading Member's office premises.

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.

12.22

Use of Prescribed Forms

12.22.1

Trading Member to use forms prescribed by SGX-ST.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

12.23

Application of Chapter 12

12.23.2

Trading Member that holds a licence specified in Rule 4.1.1(1)(b) to comply with such requirements prescribed by the Relevant Regulatory Authority and principles of good business practice in respect of the stipulated requirements in relation to Rules 12.3.1, 12.3.2, 12.4, 12.8.2, 12.8.3, 12.9, 12.10, 12.15, 12.16 and 12.17.21

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.

Compoundable

$500

$1,000

$2,000

$250

$500

$1,000

N.A.

Added on 16 May 2011 16 May 2011 and amended on 18 September 2012 18 September 2012, 19 May 2014 19 May 2014 and 1 July 2016 1 July 2016.