Past version: Effective from 18 Sep 2012 to 30 Jun 2016
| Rule Violation | Whether composition may be offered | Composition Amount which may be Offered by CDP, where CDP has Determined the Clearing Member to be Liable | Mandatory minimum penalty imposable by the DC | |||
| Rule Chapter/Number | Brief Description of Rule | 1st Violation | 2nd Violation | 3rd Violation | ||
| Rule 3 — Membership | ||||||
| 3.5 | General Obligations of a Clearing Member | |||||
| 3.5.1(1) | Clearing Member to comply with the applicable eligibility criteria | [Unless otherwise specified in this Schedule] | ||||
| Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | ||
| 3.5.1(2) | Clearing Member to in this Schedule] clear and settle Exchange Trade transacted by it in accordance with Clearing Rules and Clearing Directives | [Unless otherwise specified in this Schedule] | ||||
| Not Compoundable | Not Compoundable | $10,000 | ||||
| 3.5.1(3) | Clearing Member to clear and settle Exchange Trade transacted by a Trading Member qualified by it as a principal obligor and not merely as guarantor through CDP in accordance with Clearing Rules and Clearing Directives | [Unless otherwise specified in this Schedule] | ||||
| Not Compoundable | Not Compoundable | $10,000 | ||||
| 3.5.1(4) | Clearing Member to in this Schedule] comply with the Clearing Rules and Clearing Directives | [Unless otherwise specified in this Schedule] | ||||
| Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | ||
| 3.5.1(5) | Failure to grant CDP all rights and remedies as set forth in Clearing Rules and the Clearing Directives | [Unless otherwise specified in this Schedule] | ||||
| Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | ||
| 3.5.1(6) | Failure to pay all fees, charges, costs, compensation and other sums as provided in Clearing Rules and Clearing Directives | [Unless otherwise specified in this Schedule] | ||||
| Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | ||
| 3.5.1(7) | Failure to make contributions or payments to the Clearing Fund as required in Clearing Rules | Not Compoundable | Not Compoundable | $10,000 | ||
| 3.5.1(8) | Failure to take or refrain from taking such action as may be required in relation to the Clearing Fund | [Unless otherwise specified in this Schedule] | ||||
| Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | ||
| 3.5.1(9)(a) | Clearing Member to have proper procedures and systems for its business to prevent any violations by its directors and officers | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.1(9)(b) | Clearing Member to have in place sufficient resources and maintain adequate internal controls and risk management systems for its business | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.1(9)(c) | Clearing Member's employees or agents to reasonably discharge their duties and obligations in enforcing procedures and systems for business | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.1(10) | Clearing Member to comply with the clearing limits as CDP may prescribe from time to time | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.1(11) | Clearing Member to maintain bank accounts in the currencies that may incur settlement and with banks acceptable to CDP | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.1(12) | Clearing Member to ensure its Memorandum and Articles of Association or its constitution shall at all times conform to Clearing Rules and Clearing Directives | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.2(1) | Clearing Member to promptly submit to CDP and/or such party as directed by CDP such information, electronic records, returns or documents as and when such information, electronic records, returns or documents are required by CDP. | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.3(1) | Clearing Member to maintain complete and accurate records, or in the case of a Bank Clearing Member, records in relation to the Bank Clearing Member's business governed by this Clearing Rules, in accordance with the SFA and/or Regulations | Not Compoundable | Not Compoundable | $10,000 | ||
| Clearing Member to maintain complete and accurate records, or in the case of a Bank Clearing Member, records in relation to the Bank Clearing Member's business governed by this Clearing Rules, in accordance with the Clearing Rules and Clearing Directives | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | |
| 3.5.3(2) | Making or causing to be made false or misleading entry in books, records, reports etc | Not Compoundable | Not Compoundable | $10,000 | ||
| 3.5.3(3) | Omitting to make material entry in any books, records, reports etc | Not Compoundable | Not Compoundable | $10,000 | ||
| 3.5.3(4) | Altering or destroying any books, records, reports etc without a valid reason | Not Compoundable | Not Compoundable | $10,000 | ||
| 3.5.4 | Business Continuity Requirements | |||||
| 3.5.4(1) | Clearing Member to assess business and operational risks and maintain adequate business continuity arrangements | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.4(2) | Clearing Member to document its business continuity requirements in a business continuity plan | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.4(3) | Clearing Member to demonstrate sufficient awareness of the risks, mitigating measures and state of readiness by way of an attestation to the Board of Directors | Compoundable | $500 | $1,000 | $2,000 | N.A. |
| 3.5.4(4) | Clearing Member to review and test its business continuity plan regularly | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.5.4(5) | Clearing Member to appoint emergency contact person | Compoundable | $500 | $1,000 | $2,000 | N.A. |
| Clearing Member's emergency contact persons to be contactable at all times | Compoundable | $500 | $1,000 | $2,000 | N.A. | |
| Clearing Member to immediately notify CDP in the event of an emergency | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | |
| 3.8 | Reporting Requirements | |||||
| 3.8(1) | Clearing Member to notify CDP of violations of laws and regulations or conduct which is detrimental to the financial integrity, reputation or interests of CDP | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(2) | Clearing Member to notify CDP if any of its directors, employees or agents is investigated, arrested, charged, convicted suspended or pleads guilty to any criminal offence involving fraud or dishonesty | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(3) | Clearing Member to notify CDP if any of its directors, employees or agents is the subject of any written complaint of any offence involving fraud or dishonesty, which may have a material impact on the financial position on the Clearing Member | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(4) | Clearing Member to notify CDP when any of tis directors, employees or agents is the subject of any investigation, disciplinary proceeding or action taken by the Clearing Member in respect of the specified matters | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(4A) | Clearing Member to notify CDP if any of its directors, employees or agents engages in conduct which circumvents the SFA, SFR, this Clearing Rules or Clearing Directives, or which is inconsistent with the principles of good business practice | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(4B) | Clearing Member to notify CDP if it is insolvent or is engaged in bankruptcy or winding up proceedings | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(5) | Clearing Member to notify CDP of changes to its name | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(6) | Clearing Member to notify CDP of changes which may have the effect of altering control in the Clearing Member | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(7) | Clearing Member to notify CDP of any transactions resulting in the change of ownership of the specified proportion of the Clearing Member's share capital, or an increase of the specified proportion of the Clearing Member's share capital. | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(8) | Clearing Member to notify CDP of any change in the composition of its board of directors or of any director | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(9) | Clearing Member to notify CDP of any change or amendment to its constitutive documents | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(10) | Clearing Member to notify CDP of any death or bankruptcy of any of its directors | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(11) | Clearing Member to notify CDP of any engagement or involvement in any new business or any change in the Clearing Member's business | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(12) | Clearing Member to notify CDP of any change in the Clearing Member's senior management | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.8(13) | Clearing Member to notify CDP of any breach of director's duties | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9 | Qualification of Trading Members | |||||
| 3.9.1(1) | Clearing Member to inform CDP of the qualification of a Trading Member | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| Clearing Member to provide such details as requested by CDP | Not Compoundable | Not Compoundable | $10,000 | |||
| 3.9.1(2) | Clearing Member to pay such administrative fees as CDP may levy | Compoundable | $500 | $1,000 | $2,000 | N.A. |
| 3.9.1(3) | Clearing Member to have in place adequate internal control measures and risk management systems to monitor the Trading Member's Exchange Trades | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.1(4) | Clearing Member to enter into a written agreement with the Trading Member setting out the terms and conditions governing their relationship | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.1(5) | Clearing Member to inform CDP if it believes that a Trading Member qualified by it has defaulted or may default | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.1(6) | Clearing Member to have proper separation of front and back office functions | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.2(1) | Clearing Member to give not less than the time period specified by CDP of its intention to cease qualifying a Trading Member | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.2(2) | Clearing Member to satisfy CDP that it has taken proper steps to disable the Trading Member from entering into Exchange Trades | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.2(3) | Clearing Member to satisfy CDP that it has taken proper steps for the orderly clearing and settlement of the Trading Member's Exchange Trades | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.2(4) | Clearing Member to comply with the directions of CDP in relation to the orderly cessation of the qualification of the Trading Member's Exchange Trades | Not Compoundable | Not Compoundable | $10,000 | ||
| 3.9.2(5) | Clearing Member to take steps as CDP may deem appropriate to ensure that none of the Trading Member's Exchange Trade will be cleared and settled through the Clearing Member by the proposed date of cessation | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.2A(1)(a) | Clearing Member to notify CDP of its decision to suspend its qualification of a Trading Member | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.9.2A(1)(b) | Clearing Member to comply with any reasonable direction of CDP in relation to the suspension of the qualification of a Trading Member | Not Compoundable | Not Compoundable | $10,000 | ||
| 3.9.2A(2) | Clearing Member to notify CDP in writing within the specified period, of its intention to resume or cease qualification of a Trading Member | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.10 | Resignation by Clearing Member | |||||
| 3.10.1 | Failure to comply with procedures for resignation as a Clearing Member | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 3.10.5(1) | Clearing Member shall not transact or accept for clearing and settlement, Exchange Trades that are due for settlement after the tenth Settlement Day from the date of the resignation notice. | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
Added on 16 May 201116 May 2011.
Amended on 18 September 201218 September 2012.