Chapter 2 — Access and Membership

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Futures Trading Rules

Schedules Schedule A

Past version: Effective up to 14 Mar 2013

Chapter 2 — Access and Membership

Rule Violation

Whether composition may be offered

Composition Amount which may be Offered by the Exchange, where the Exchange has Determined the Member, Approved Trader and/or Registered Representative to be Liable

Mandatory minimum penalty imposable by the DC

Rule Chapter/Number

Brief Description of Rule

Members

Approved Traders

Registered Representatives

1st Violation

2nd Violation

3rd Violation

1st Violation

2nd Violation

3rd Violation

1st Violation

2nd Violation

3rd Violation

Chapter 2 — Access and Membership

2.1

Access and Trading

2.1.2(a)

Member to provide information to each Customer for which it has authorised Direct Market Access

Compoundable

$500

$1,000

$2,000

N.A.

2.1.2(b)

Member to assist the Exchange in investigations into potential Rule violations in relation to Customers for which it has authorised Direct Market Access

Not Compoundable

N.A.

$10,000.

2.1.3

Persons accessing Partner Markets to comply with the applicable rules, laws and regulations governing trading in the Partner Market

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.

2.2

Classes of Membership

2.2.2

Trading Member to observe this Rules and any requirements prescribed by the Exchange

[Unless otherwise specified in this Schedule]

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.2.3

Clearing Member to observe this Rules, the Clearing Rules and any requirements as prescribed by the Exchange or the Clearing House

[Unless otherwise specified in this Schedule or Schedule A to the Clearing Rules]

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.3

Admission Criteria for Members

2.3.2(b)

Member to notify the Exchange at the time of submission of its application for concurrent membership in another exchange

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.4

Licensing and Credit Rating Requirements for Members, their Employees and Agent

2.4.1

General Trading Member, and its employees and agents to procure and maintain requisite licenses and satisfy licensing requirements for engaging in regulated activity.

Not Compoundable

$10,000

2.5

Financial Requirements for Members

2.5.2(b)

General Trading Member to comply with financial requirements

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.5.2(c)

Bank Trading Members to comply with financial requirements

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.5.4

Member to comply with additional financial, capital and other requirements imposed by the Exchange or the Clearing House

Not Compoundable

N.A.

$10,000

2.5.5

Corporate Member to comply with the prescribed calculation of Financial Resources

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.5.6(a)

Corporate Member to immediately notify the Exchange of material changes to Financial Resources and Adjusted Net Head Office Funds

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.5.6(b)

Corporate Member to comply with requirements described under Regulation 7(3) of the Financial and Margin Requirements, imposed by the Exchange.

Not Compoundable

N.A.

$10,000

2.5.6(c)

Corporate Member to comply with directions of the Exchange on the submission of statements or operation of business.

Not Compoundable

N.A.

$10,000

2.5.6(d)

General Trading Member to comply with the requirements described in Regulation 17(2) of the Financial and Margin Requirements, imposed by the Exchange.

Not Compoundable

N.A.

$10,000

2.5.7

General Trading Member to comply with requirements relating to preference shares, unsecured loans & others

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.6

Technical Matters & Risk Management Controls

2.6.1

Member to comply with other requirements or restrictions prescribed by Exchange

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.6.2

Corporate Member to have security arrangements in place to ensure that unauthorised persons are denied Direct Market Access

Not Compoundable

N.A.

$10,000

2.6.3

Corporate Member to comply with requirements relating to risk management controls

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.6.4

Corporate Member to maintain proper records and audit trails

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.6.5

Corporate Member to comply with accounting, reporting and book-keeping requirements

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.6.6(a)

Member to assess its 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.

2.6.6(b)

Member to document its business continuity arrangements in a business continuity plan

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.6.6(c)

Member to demonstrate awareness of risks, mitigating measures and state of readiness by way of attestation to the Board of Directors

Compoundable

$500

$1,000

$2,000

N.A.

2.6.6(d)

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.

2.6.6(e)

Member to appoint emergency contact persons and furnish the contact information to the Exchange

Compoundable

$500

$1,000

$2,000

N.A.

Member's emergency person must be contactable at all times

Compoundable

$500

$1,000

$2,000

N.A.

Member must notify the Exchange in the event of emergencies

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.7

Fit and Proper Requirements

2.7.1

Corporate Member to demonstrate appointment of fit and proper persons as Directors, Chief Executive Officer and other specified personnel

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.7.2

Corporate General Trading Member to obtain the prior approval of the Exchange for appointment of CEO & Deputy CEO

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.7.3

Bank Trading Member to notify the Exchange of appointment of CEO & Deputy CEO, within the specified time

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.8

Bypass Privileges

2.8.1(d)

Member to ensure that Bypass Privileges shall not be extended to third parties by Customers

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.8.1(e)

Member not to grant Bypass Privileges to any beneficial owners of sub-account within the Omnibus account

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.8.1(f)

Clearing Member to guarantee and assume financial responsibility for Customer's activity

Not Compoundable

N.A.

$10,000.

2.8.1(g)

Clearing Member to be fully responsible for the conduct of business of its Affiliate

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.8.1(h)

Member to maintain current register of Customers granted Bypass Privileges

Compoundable

$500

$1,000

$2,000

N.A.

2.8.4

Clearing Member to apply for Bypass Privileges on behalf of Customers only if the financial requirements are met

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.8.6(a)

Clearing Member to notify the Exchange of overtrading

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.8.6(b)

Clearing Member to cause Customer to enter into a bypass undertaking in such form as prescribed by the Exchange

Not Compoundable

N.A.

$10,000

2.8.6(c)

Clearing Member to cause appointment of external auditor to confirm the matters specified

Not Compoundable

N.A.

$10,000

2.13

Registration of Approved Traders & Registered Representatives

2.13.1

Member to register Approved Traders and Registered Representatives

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.13.2

Approved Trader to register with the Exchange

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.

2.13.3

Registered Representatives to register with the Exchange

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

$1,000 – $3,000

$3,000 – $6,000

$6,000 – $8,000

N.A.

2.13.6

Member to notify the Exchange of specified occurrences

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.13.7A

Member to nofity the Exchange of specified occurrences

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.14

Change of Control of Members

2.14.1(a)

Corporate Member to notify the Exchange of change in ownership

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.14.1(b)

Corporate Member to notify the Exchange of changes which may alter the control of the Member

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.14.1(c)

Corporate Member to notify the Exchange of change in director

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.14.1(d)

Corporate Member to notify the Exchange of the death or bankruptcy of a director

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.14.1(e)

Corporate Member to notify the Exchange of any change in senior management

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.14.1(f)

Corporate Member to notify the Exchange of any alteration to constitutive documents

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.14.1(g)

Corporate Member to notify the Exchange of any engagement or involvement in any new business or change in business

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.14.1(h)

Corporate Member to notify the Exchange of any change in name

Compoundable

$2,000 – $4,000

$4,000 – $7,000

$7,000 – $10,000

N.A.

2.15

Registration, Suspension & Termination of Members

2.15.4(a)

Member to comply with the directions of the Exchange if trading privileges are suspended or terminated

Not Compoundable

N.A.

$10,000

Added on 16 May 2011 16 May 2011.