Past version: Effective from 15 Mar 2013 to 31 Mar 2014
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 3 — Conduct of Members, Approved Traders and Representatives | ||||||||||||
3.2 | Duties Applicable to All Members, Approved Traders & Registered Representatives | |||||||||||
3.2.1 | Members, Approved Traders and Registered Representatives to observe general duties of integrity, fair dealing and care | 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. |
3.2.2 | Corporate Member to ensure that constitutive documents conform to this Rules | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.2.3 | Member to immediately report change in Member's circumstances | [Unless otherwise specified in this Schedule] | ||||||||||
Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | ||
3.2.4 | Member to immediately inform the Exchange of the stipulated events | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.2.5 | Member not to carry on business on any market if prohibited by the Exchange | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
Member to comply with the rules and regulations of other markets on which a Member carries on business | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | |
3.2.6 | Member to promptly settle all margin liabilities | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.2.7 | Member not to carry speculative long and short positions for the same Contract Month | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.2.8 | Member, Approved Trader and Registered Representative to comply with advertising guidelines | 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. |
3.3 | Duties of Members Undertaking Agency Trades | |||||||||||
3.3.1 | Member to comply with customer account & Know-Your-Customer Requirements | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.2 | Member to comply with management approval requirement for opening customer accounts | Compoundable | $500 | $1,000 | $2,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.3 | Member to obtain Risk Disclosure Statement | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000. | ||
3.3.4 | Member to execute orders only upon receipt from a Customer, unless otherwise authorised by the Customer | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.5 | Member to provide Internet Trading Customers with adequate information, guidance and training with respect to the stipulated matters | Compoundable | $500 | $1,000 | $2,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.6 | Member to accept orders only via Registered Representatives | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.7 | Member or Registered Representative not to accept orders without executing them. Approved Trader to execute orders in accordance with the applicable rules | 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. |
3.3.8 | Registered Representative to immediately record an order, amendment or cancellation on an Order Form, unless immediately entered by an Approved Trader | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | $1,000 – $3,000 | $3,000 – $6,000 | $6,000 – $8,000 | N.A. |
3.3.8A | Member to have in place processes to prevent unauthorised changes to order info | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.9 | Member to comply with the Conduct of Business Regulations in respect of statement of accounts and contract notes | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
Member to provide statement of account and contract note at Exchange's request | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | |
Member to obtain prior consent for electronic issuance of statement of account or contract note | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | |
3.3.10 | Member to meet the stipulated fiduciary obligations to its Customers and to comply with segregation requirements under the SFA and Conduct of Business Regulations | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
3.3.11 | Member not to trade or accept any Customer's monies or assets after insolvency | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
3.3.12 | Member to comply with the stipulated requirements in relation to customer margins | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.13 | Member to collect the required margins for Over-The-Counter Spot Trades from its Customer and the direct counterparty | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.14 | Member to apply Inter-Exchange Cross Margining, only if the stipulated conditions are met | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.15 | Member to comply with the requirements for the transfer of error trades to House Account | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.16 | Member to enter into a give-up arrangement only if give-up agreement is executed and to comply with the stipulated requirements for unsuccessful give-up trades | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.17 | Member to comply with the requirements for reporting of account identity | Compoundable | $500 | $1,000 | $2,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.18 | Member to comply with the requirements for the reporting of open positions | Compoundable | $500 | $1,000 | $2,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.19 | Member to comply with the requirements and procedures prescribed by the Exchange for Omnibus Accounts | [Unless otherwise specified in this Schedule] | ||||||||||
Compoundable | $500 | $1,000 | $2,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | ||
3.3.20 | Member to comply with limits on Omnibus Accounts imposed by the Exchange | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.21 | Member to obtain the required disclosures from the Omnibus Account Holder | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
Member to comply with the orders of the Exchange in the event of an Omnibus Account Holder's failure to disclose | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | |||
Member to ensure that Omnibus Account Holders are aware of this Rule 3.3.21 | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | |
3.3.22 | Member to produce audit trail of transactions when requested by the Exchange | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
3.3.23(a) | Member to ensure that data and records are made and kept in a way that is easily retrievable | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.23(b) | Member to keep data and records for the minimum period prescribed by law | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
3.3.23(c) | Member to make data and records available to the Exchange in a timely manner when requested | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
3.3.23A(a) | Members, Approved Traders and Registered Representative s to maintain a register of securities in accordance with SFA | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.3.23A(b) | Members, Approved Traders and Registered Representative s to produce the register for inspection if requested by the Exchange | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.3.23A(c) | Members, Approved Traders and Registered Representative s to permit the Exchange to take extracts of the register | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.3.24 | Member to comply with all information technology and data security requirements | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.25 | Member to issue unique ID tags & passwords | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.26 | Member to make and keep as record, computations of financial & capital requirements | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.27 | Member to submit financial statements or other infomration as required by the Exchange | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
Member to comply with the directions of the Exchange thereafter | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | |||
3.3.28 | Member to comply with the requirements relating to auditor certification of its accounts | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.29 | Member to cause auditor to report the stipulated information to the Exchange | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.30 | Member to satisfy the applicable approval or notification requirements in relation to any change of auditors | Compoundable | $500 | $1,000 | $2,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.31 | General Trading Member not to act as guarantor | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.32(a) | General Trading Member to satisfy the Secondary Requirement in respect of opening a Foreign Branch | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.32(b) | General Trading Member to obtain the necessary approval from the Authority and the Exchange in respect of opening a Foreign Branch | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
3.3.32(c) | General Trading Member to obtain approval from the regulator in the relevant foreign jurisdiction in respect of opening a Foreign Branch and to furnish documentation of such approval to the Exchange | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.32(d) | General Trading Member to obtain approval from its, or its parent company's primary regulator in respect of opening a Foreign Branch and furnish documentation of such approval to the Exchange | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.32(e) | General Trading Member to comply with any other requirements imposed by the Exchange on Foreign Branch | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.32(f) | General Trading Member to ensure that activities of the Foreign Branch fall within the Regulated Activitities which the General Trading Member is authorised to conduct | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 | ||
3.3.32(g) | General Trading Member to submit the required undertaking to the Exchange, in relation to its Foreign Branch | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.3.32(h) | General Trading Member to conduct the necessary internal audit on th Foreign Branch and submit a copy of the internal audit report to the Exchange | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.4 | Trading Practices & Conduct Rules of Members, Approved Traders & Registered Representatives | |||||||||||
3.4.1 | Member, Approved Trader or Registered Representative not to manipulate the market | Not Compoundable | Not Compoundable | $30,000 | ||||||||
3.4.2 | Member, Approved Trading or Registered Representative not to engage in churning | Not Compoundable | Not Compoundable | $30,000 | ||||||||
3.4.3 | Member, Approved Trader or Registered Representative not to engage in false trading, bucketing, fraudulent inducement to trade or employment of fraudulent device | Not Compoundable | Not Compoundable | $30,000 | ||||||||
3.4.3A | Member to have to have in place processes to review orders and trades for suspicious trading behaviour | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.4.4 | Member, Approved Trader or Registered Representative to immediately inform Exchange of prohibited trading practices | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.5 | Member, Approved Trader or Registered Representative not to disseminate false or misleading information | Not Compoundable | Not Compoundable | $30,000 | ||||||||
3.4.6(a) | Member, Approved Trader or Registered Representative not to permit the use of the Member's facilities or privileges by any other person in the stipulated manner | Not Compoundable | Not Compoundable | $30,000 | ||||||||
3.4.6(b) | Member, Approved Trader or Registered Representative not to engage in conduct which impairs dignity of the good name of the Exchange. | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.6(c) | Member, Approved Trader or Registered Representative not to commit acts substantially detrimental to the interest of Exchange | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.6(d) | Member, Approved Trader or Registered Representative not to refuse to comply with an order of the Exchange or the Disciplinary Committee or Appeals Committee | Not Compoundable | Not Compoundable | $30,000 | ||||||||
3.4.6(e) | Member, Approved Trader or Registered Representative not to refuse to comply with a final arbitration award | Not Compoundable | Not Compoundable | $30,000 | ||||||||
3.4.6(f) | Member, Approved Trader or Registered Representative to answer Customers' complaints promptly and in appropriate detail | Compoundable | $500 | $1,000 | $2,000 | $250 | $500 | $1,000 | $250 | $500 | $1,000 | N.A. |
3.4.6(g) | Member, Approved Trader or Registered Representative not to commit fraudulent or dishonest act or any act of bad faith | Not Compoundable | Not Compoundable | $30,000 | ||||||||
3.4.6(h) | Member, Approved Trader or Registered Representative not to act in a dishonourable or uncommercial manner | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.6(i) | Member, Approved Trader or Registered Representative not to make a material misstatement to the Exchange or Disciplinary Committee or Appeals Committee or in any information supplied to Exchange | Not Compoundable | Not Compoundable | $20,000 | ||||||||
3.4.6(j) | Member, Approved Trader or Registered Representative not to make or cause to be made a false or misleading entry into books, records, etc | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.6(k) | Member, Approved Trader or Registered Representative not to omit to make material entry in any books, records, reports, etc | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.6(l) | Member, Approved Trader or Registered Representative not to alter or destroy any books, records, reports, etc | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.6(m) | Member, Approved Trader or Registered Representative not to use or reveal confidential information obtained by reason of participating in an investigative proceeding or hearing | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.6(n) | Member, Approved Trader or Registered Representative not to refuse to appear before the Exchange or the Disciplinary Committee or Appeals Committee at a hearing or in connection with any investigation. | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.6(o) | Member, Approved Trader or Registered Representative not to refuse to fully answer all questions or produce books and records at any audit, hearing or investigation | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.7 | Member, Approved Trader or Registered Representative not to disclose orders | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.8 | Member, Approved Trader or Registered Representative not to enter bids and offers other than in good faith | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.9 | Member, Approved Trader or Registered Representative not to engage in the prohibited acts in relation to fictitious transactions without change in ownership | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.10 | Member not to execute any trade beyond any limits imposed and to comply with the prescribed requirements relating to overtrading | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. |
3.4.11 | Member, Approved Trader or Registered Representative not to knowingly take advantage of an error | 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. |
3.4.12 | Member, Approved Trader or Registered Representative not to be convicted of any offence relating to fraud, any act of bad faith, dishonest, dishonourable or uncommercial conduct | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.13 | Member, Approved Trader or Registered Representative not to engage in front running | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.14 | Member, Approved Trader or Registered Representative not to knowingly trade against Customers' orders | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.4.15 | Members, Approved Traders and Registered Representative s not to participate in any prohibited market conduct or in any insider trading | Not Compoundable | Not Compoundable | $10,000 | ||||||||
3.5 | Inspection and Audit | |||||||||||
3.5.2 | Member to grant access to and cooperate with the Exchange in respect of inspections and audits | Not Compoundable | Not Compoundable | N.A. | N.A. | N.A. | N.A. | N.A. | N.A. | $10,000 |
Added on 16 May 201116 May 2011 and amended on 16 July 201216 July 2012 and 15 March 201315 March 2013.