Rule 6A — Margin Requirements

6A.1.1

This Chapter shall be applicable to the margin requirements imposed by CDP for Novated Contracts, the conduct of accounts and other related matters.

Added on 23 January 2009 23 January 2009.

6A.2 Clearing Member to Procure Customer Margins for Marginable Futures Contract

Amended on 21 January 2013 21 January 2013.

A Clearing Member must procure Initial Margins from its customers and must require that its customers meet the Customer Required Margins for the purpose of meeting margin requirements of Marginable Futures Contracts.

Added on 23 January 2009 23 January 2009.

6A.2.2

A Clearing Member must comply with such requirements on the computation and monitoring of a customer's margins as CDP may prescribe.

Added on 23 January 2009 23 January 2009.

6A.2.3

A Clearing Member may allow Excess Margins to be withdrawn provided such withdrawal will not cause the deposited collateral to be less than zero.

Added on 23 January 2009 23 January 2009.

6A.2.4

Except in respect of Marginable Futures Contracts, nothing in this Clearing Rules shall be construed as requiring a Clearing Member to procure margins from its customers for any other Novated Contract.

Added on 21 January 2013 21 January 2013.

6A.3 Margin Management for Clearing Members In Respect of Margins from Customers for Marginable Futures Contracts

Amended on 21 January 2013 21 January 2013.

6A.3.1

Except for trades which reduce Customer Required Margins, a Clearing Member must not accept new orders or new trades in Marginable Futures Contracts for clearing from any customer unless:—

(1) the minimum Initial Margins for the new trade are deposited or the Clearing Member has reason to believe that the minimum Initial Margins will be deposited within two Market Days from the trade date (T+2); and

(2) the Customer Asset Value complies with the Customer Required Margins, or the Clearing Member has reason to believe that the additional margins to be deposited pursuant to Rule 6A.3.2 will be deposited within two Market Days from the trade date (T+2).

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.3.2

If the Customer Asset Value falls below the Customer Required Margins, the Clearing Member must call for additional margins from the customer to bring the Customer Asset Value to no less than the sum of Initial Margins and Customer Variation Margins within two Market Days from the date the Customer Asset Value falls below the Customer Required Margins.

Added on 23 January 2009 23 January 2009.

6A.3.3 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.3.4 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.3.5 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.3.6

In respect of Marginable Futures Contracts, Clearing Members must not set margin requirements that are less stringent than those prescribed by CDP.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.4 Acceptable Collateral for Clearing Members In Respect of Margins from Customers for Marginable Futures Contract

Amended on 21 January 2013 21 January 2013.

6A.4.1

Initial Margins and Customer Required Margins collected by the Clearing Member pursuant to Rule 6A.2.1 must be met in the form of collateral as prescribed by CDP from time to time. Such collateral must be in the form of cash, government securities, selected common stocks, bank certificates of deposit, gold bars, gold certificates or such other instruments as CDP permits. Valuation of such collateral must be in accordance with the hair-cut rates specified by CDP.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.4.2

Currency and financial instruments denominated in currencies which are subject to exchange controls such that they are illegal tender outside the currency's home country, or are restricted by any form of capital controls are not acceptable forms of collateral for the purpose of meeting margin requirements of Marginable Futures Contracts.

Added on 23 January 2009 23 January 2009.

6A.4A Margin Management for Clearing Members In Respect of Any Margins from Customers

6A.4A.1

Where a Clearing Member collects margins from customer in connection with any Exchange Trade, regardless of whether it is required to under the Clearing Rules, the following shall apply:

(1) subject to Rule 6A.3.6, nothing in these Clearing Rules prohibits a Clearing Member from imposing margin requirements, hair-cut rates, payment periods for customers to deposit collateral, valuations of positions and collateral, and making calls for additional margins, as it sees fit;

(2) if a Clearing Member is unable to contact a customer to call for margins in respect of a Novated Contract, a written notice sent to the customer at the most recent address furnished by the customer to the Clearing Member shall be deemed sufficient; and

(3) where a customer fails to meet such margin that the Clearing Member may call from the customer, the Clearing Member may take actions as it deems appropriate, without giving notice to the customer, to reduce its exposure to the customer. Such actions may include liquidating all or such part of the customer's collateral deposited with the Clearing Member, or taking action to offset all or such part of the customer's positions. CDP may also order such Clearing Member to immediately take such action to offset all or such part of the positions of the customer to rectify the deficiency.

Added on 21 January 2013 21 January 2013.

6A.5 Clearing Member to Deposit Margins with CDP

6A.5.1

Clearing Member Required Margins may be determined by CDP from time to time. A Clearing Member shall deposit such margins with CDP by such time as CDP prescribes.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.5.1A

If CDP is of the opinion that it is unable to inform Clearing Members, at the prescribed time, of the margins that they are required to deposit with CDP, CDP shall inform Clearing Members accordingly. CDP shall provide adequate time for Clearing Members to deposit such margins.

Added on 21 January 2013 21 January 2013.

6A.5.2

The amount of Clearing Member Required Margins which must be deposited by any Clearing Member with CDP shall be calculated and determined in accordance with procedures prescribed by CDP.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.5.3

All margins deposited with or provided to CDP by a Clearing Member shall be retained by CDP in whole or in part, as CDP may deem necessary but, subject to these Clearing Rules and in particular Rule 6A.8, Rule 6B.3, and Rule 8.6B and the Security Deed, may be returned to the Clearing Member when the obligations in respect of the Novated Contracts for which such margins have been deposited or provided have been met.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013 and 10 December 2018 10 December 2018.

6A.5.4

A Clearing Member shall not deposit with or provide to CDP, monies and assets of its customer for the purpose of meeting Clearing Member Required Margins for Novated Contracts other than Marginable Futures Contracts. For the purpose of this Rule 6A.5.4, "customer" means a Customer, except where such Customer is:

(1) a director, officer, employee or representative of the Clearing Member; and

(2) a related corporation of the Clearing Member with respect to accepted instructions to deal for an account belonging to, and maintained wholly for the benefit of the related corporation.

Added on 21 January 2013 21 January 2013.

6A.6 Monies and Assets Acceptable by CDP as Margins

Amended on 21 January 2013 21 January 2013.

6A.6.1

Forms of monies and assets acceptable by CDP as margins are:

(1) cash;

(2) Singapore and US Government Securities;

(3) selected common stocks, units of listed business trusts and units of real estate investment trusts; and

(4) any other instruments as may be approved by CDP from time to time,

all of which must be and remain unencumbered unless otherwise permitted or contemplated under these Clearing Rules, the Security Deed or the SFA.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.6.2 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.6.3 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.6.4

The Clearing Member shall notify CDP as to whether such Collateral is to be maintained as margin solely for Customer Accounts or otherwise. Such Collateral will be held by CDP accordingly.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.6.5 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.6.6 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.6.7 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.7 Composition of Margins Deposited with CDP

6A.7.1

Without prejudice to the generality of Rule 6A.6, Rule 6B.4 and Rule 6B.6, the aggregate amount of Collateral deposited with or provided to CDP in respect of the aggregate Customer Required Margins and the aggregate amount of collateral deposited with CDP in respect of all other margin requirements must each separately comply with the following:

(1) where the relevant total margin requirements are US$1,000,000 (or its equivalent) or less, the entire margin requirements must be in the form of cash and/or government securities;

(2) where the relevant total margin requirements are more than US$1,000,000 (or its equivalent), cash and/or government securities must constitute at least US$1,000,000 of the total margin requirements; and

(3) 60 percent of the relevant total margin requirements must be in the form of cash and/or government securities.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.8 Mark to Market Gains

Amended on 21 January 2013 21 January 2013.

6A.8.1

Mark-to-market gains may be utilised by the Clearing Member or CDP as follows:

(1) in respect of Novated Contracts other than Marginable Futures Contracts, mark-to-market gains may only be utilised to meet margin requirements for such other Novated Contracts; and

(2) in respect of Marginable Futures Contracts, mark-to-market gains of an account may only be utilised to meet margins requirements for the same account.

Added on 23 January 2009 23 January 2009 amended on 21 January 2013 21 January 2013.

6A.9 Valuation Price

6A.9.1

For the computation of Customer Variation Margins and Clearing Member Variation Margins, the Valuation Price of a Novated Contract shall be determined in accordance with the relevant formula and procedures applicable to each Novated Contract, as determined by CDP. In arriving at such formula, CDP may, in consultation with SGX-ST, take into account factors, including but not limited to:

(1) the last traded price;

(2) the latest bid and offer spread; and

(3) price data derived from pricing models, as selected or established by CDP from time to time.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013 and 3 June 2019 3 June 2019.

6A.9.2

Notwithstanding the foregoing, CDP shall reserve the right to amend the Valuation Price of any Novated Contract under these Rules as it deems fit.

Added on 23 January 2009 23 January 2009 and amended on 21 January 2013 21 January 2013.

6A.9A Additional Margins

6A.9A.2

Where CDP calls for additional margins from a Clearing Member in accordance with Rule 6A.9A.1, the Clearing Member shall deposit such margins with CDP by such time as CDP shall specify and in such forms as CDP prescribes.

Added on 21 January 2013 21 January 2013.

6A.9A.1

Notwithstanding anything to the contrary in the Clearing Rules, in relation to Novated Contracts, CDP may call for additional margins from one or more Clearing Members in the following situations:

(1) when, in CDP's opinion, unstable conditions exist or market conditions or price fluctuations relating to one or more securities or futures contracts at any time require that additional margins to maintain an orderly market or to preserve financial integrity or for any other reason;

(2) when CDP believes that any Clearing Member is carrying exposure that:

(a) is larger than is justified by the financial condition of that Clearing Member; or

(b) places or may place CDP at risk;

(3) where the Clearing Member is found to have a record of frequent rule violations or inadequate or unsound management or serious operational defects which, in CDP's opinion, places or may place CDP at risk; or

(4) where market conditions or price fluctuations are such that CDP deems it necessary, to call upon the Clearing Members whom it believes are affected by such conditions or fluctuations to deposit additional funds.

Added on 21 January 2013 21 January 2013 and amended on 8 October 2018 8 October 2018.

6A.9B CDP's Records

Save for manifest error, CDP's records shall be conclusive and binding on a Clearing Member as to its margin requirements. Notwithstanding any manifest error in CDP's records, or any dispute in relation to such records, a Clearing Member shall deposit or provide, in accordance with these Clearing Rules, such margins as required by CDP, and any rectification shall be done as soon as practicable after the dispute is resolved.

Added on 10 December 2018 10 December 2018.

6A.10 Segregation of Customer's Money and Assets

6A.10.1 General

(1) A Clearing Member shall comply with the customer segregation requirements under these Rules and/or the SFA at all times.

(2) A Clearing Member shall ensure that it shall at all times inform and keep CDP informed of such information as would be required for CDP to discharge its segregation obligations under the SFA and/or to enable CDP to issue to the Authority the verification of margin funds statement placed with CDP as required under the SFA.

Added on 23 January 2009 23 January 2009.

6A.10.2 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.11 Notification of Under-Segregation

6A.11.1

Every Clearing Member shall immediately report to CDP of any under-segregation of moneys or assets as required under these Rules and/or the SFA.

Added on 23 January 2009 23 January 2009.

6A.12 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.12.1 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.12.2 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.12.3 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.12.4 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.12.5 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.13 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.13.1 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6A.14 Under-Margined Accounts

6A.14.1

Each Clearing Member shall immediately notify CDP when any account does not comply with the Customer Required Margins by an amount which exceeds its aggregate resources, except that no notification is required for the Clearing Member's own proprietary House Account.

Added on 23 January 2009 23 January 2009.