3.1.1
Unless otherwise specified or the context requires otherwise, where the terms used in this Chapter are defined in relation to a holder of a Capital Markets Services Licence, such definitions shall, with the necessary modifications, apply to a Trading Member, as they apply to a holder of a Capital Markets Services Licence, whether or not that Trading Member holds a Capital Markets Services Licence.
Added on 3 June 20193 June 2019.
3.2.1
Added on 3 June 20193 June 2019.
3.2.2
The base capital requirement of:
Added on 3 June 20193 June 2019.
3.2.3
If a Trading Member fails to comply or becomes aware that it will fail to comply with the base capital requirement prescribed under Rule 3.2, or such other base capital requirement as SGX-ST may have imposed, it shall immediately notify SGX-ST.
Added on 3 June 20193 June 2019.
3.2.4
It shall be a breach of the Rules by the Trading Member if the base capital, or as the case may be, net head office funds fall(s) below such base capital requirement, whether or not the Trading Member makes or has made the notification specified in Rule 3.2.3.
Added on 3 June 20193 June 2019.
3.3.1
This Rule applies only to Trading Members that hold a Capital Markets Services Licence.
Added on 3 June 20193 June 2019.
3.3.2
A Trading Member shall not cause or permit:
to fall below its total risk requirement.
Added on 3 June 20193 June 2019.
3.3.3
In the Rules, financial resources, adjusted net head office funds and total risk requirement shall be computed in the same manner as prescribed in the SFR (Financial and Margin Requirements), read together with the RBC Notice.
Added on 3 June 20193 June 2019.
3.3.4
It shall be a breach of the Rules by the Trading Member if its financial resources, or as the case may be, adjusted net head office funds falls below its total risk requirement, whether or not the Trading Member makes or has made the notification specified in Rule 3.3.5.
Added on 3 June 20193 June 2019.
3.3.5
Notification of Failure to Comply with Rule 3.3
If a Trading Member fails to comply or becomes aware that it will fail to comply with the financial resources requirement prescribed under this Rule 3.3, or such other financial resources requirement as SGX-ST may impose, it shall immediately notify SGX-ST.
Added on 3 June 20193 June 2019.
3.3.6
First warning of impending failure to comply with Rule 3.3
A Trading Member shall immediately notify SGX-ST if:
fall below 150% of its total risk requirement or such other percentage as SGX-ST may impose.
Added on 3 June 20193 June 2019.
3.3.7
If SGX-ST is notified by a Trading Member under Rule 3.3.6 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 3.3.6) that the Trading Member's financial resources or adjusted net head office funds, as the case may be, have fallen or will fall below 150% of its total risk requirement, or such other percentage as SGX-ST may impose, SGX-ST shall be entitled to require the Trading Member to:
Added on 3 June 20193 June 2019.
3.3.8
Second Warning of Impending Failure to Comply with Rule 3.3
A Trading Member shall immediately notify SGX-ST if:
fall below 120% of its total risk requirement or such other percentage as SGX-ST may impose.
Added on 3 June 20193 June 2019.
3.3.9
If SGX-ST is notified by a Trading Member under Rule 3.3.8 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 3.3.8) that the Trading Member's financial resources or adjusted net head office funds, as the case may be, have fallen or will fall below 120% of its total risk requirement, or such other percentage as SGX-ST may impose, SGX-ST shall be entitled to require the Trading Member to comply with any or all of the directions prescribed under Regulation 7(3) of the SFR (Financial and Margin Requirements).
Added on 3 June 20193 June 2019.
3.4.1
This Rule applies only to Trading Members that hold a Capital Markets Services Licence.
Added on 3 June 20193 June 2019.
3.4.2
A Trading Member shall not cause or permit its aggregate indebtedness to exceed 1,200% of its aggregate resources, or such other aggregate indebtedness requirement as SGX-ST may impose. It shall be a breach of the Rules by the Trading Member if its aggregated indebtedness exceed(s) such prescribed percentage of its aggregate resources, whether or not the Trading Member makes or has made the notification specified in Rule 3.4.3.
Added on 3 June 20193 June 2019.
3.4.3
Notification of Failure to Comply with Rule 3.4
If a Trading Member fails to comply or becomes aware that it will fail to comply with the aggregate indebtedness requirement prescribed under Rule 3.4, or such other percentage of aggregate indebtedness over aggregate resources as SGX-ST may impose, it shall immediately notify SGX-ST.
Added on 3 June 20193 June 2019.
3.4.4
Early Warning of Impending Failure to Comply with Rule 3.4
A Trading Member shall immediately notify SGX-ST if its aggregate indebtedness exceeds 600% of its aggregate resources or such other percentage as SGX-ST may impose.
Added on 3 June 20193 June 2019.
3.4.5
If SGX-ST is notified by a Trading Member under Rule 3.4.4 or becomes aware (whether or not there has been any notification by the Trading Member under Rule 3.4.4) that the Trading Member's aggregate indebtedness has exceeded or will exceed 600% of its aggregate resources, or such other percentage as SGX-ST may impose, SGX-ST shall be entitled to require the Trading Member to comply with any or all of the directions prescribed under Regulation 17(2) of the SFR (Financial and Margin Requirements).
Added on 3 June 20193 June 2019.
3.4.6
Qualifying Letter of Credit
Added on 3 June 20193 June 2019.
3.5.1
SGX-ST may at its absolute discretion prescribe for any specific Trading Member, or one or more Trading Members, capital, financial and other requirements in excess of the minimum prescribed in this Chapter 3 based on such criteria as SGX-ST may determine at its absolute discretion, including but without limitation, volume, risk exposure of positions carried, risk concentration, margin policies and/or nature of business conducted or to be conducted or its membership in any exchange or organised market.
Added on 3 June 20193 June 2019.
3.6.1
This Rule applies only to Trading Members that hold a Capital Markets Services Licence.
Added on 3 June 20193 June 2019.
3.6.2
A Trading Member shall immediately notify SGX-ST if the Trading Member's exposure to a single customer exceeds 20% of its average aggregate resources. To reduce the Trading Member's risk exposure to a single customer, SGX-ST shall have the right to impose on the Trading Member such risk management measures as it deems necessary.
Added on 3 June 20193 June 2019.
3.6.3
The full amount of the qualifying letter(s) of credit or any part thereof deposited pursuant to Rule 3.4.6 may be taken into account for the calculation of aggregate resources under this Rule.
Added on 3 June 20193 June 2019.
3.6.4
"Exposure to a single customer" means the sum of the following:
Added on 3 June 20193 June 2019.
3.6.5
For the purposes of this Rule, a security or futures contract is deemed to be carried in a customer's account (other than a margin financing account) carried on the books of the Trading Member on the contract date specified in the contract note in respect of the transaction in that security or futures contract or on the exercise date specified in the exercise notice in respect of an option in that security that has been exercised.
Added on 3 June 20193 June 2019.
3.6.6
"Single customer" in relation to a customer who is:
but shall not include the Trading Member itself.
Added on 3 June 20193 June 2019.
3.7.1
A Remote Trading Member shall set appropriate thresholds to monitor its exposure to a single customer.
Added on 3 June 20193 June 2019.
3.7.2
The Remote Trading Member shall immediately notify SGX-ST if its exposure to a single customer exceeds its internal threshold.
Added on 3 June 20193 June 2019.
3.7.3
For the purposes of this Rule, "single customer" and "exposure to a single customer" shall have the meaning ascribed to it in Rule 3.6.
Refer to Practice Note 3.7 and 3.9.
Added on 3 June 20193 June 2019.
3.8.1
This Rule applies only to Trading Members that hold a Capital Markets Services Licence.
Added on 3 June 20193 June 2019.
3.8.2
A Trading Member shall immediately notify SGX-ST of its exposure to a single security:
Added on 3 June 20193 June 2019.
3.8.3
To reduce a Trading Member's risk exposure to a single security, SGX-ST shall have the right to impose on the Trading Member such risk management requirements as it thinks fit.
Added on 3 June 20193 June 2019.
3.8.4
The full amount of the qualifying letter(s) of credit or any part thereof deposited pursuant to Rule 3.4.6 may be taken into account for the calculation of aggregate resources under this Rule.
Added on 3 June 20193 June 2019.
3.8.5
"Exposure to a single security" means the sum of the following:
and shall not include exposure arising from a Trading Member's arbitrage transactions.
Added on 3 June 20193 June 2019 and amended on 18 January 2022.
3.8.6
For the purposes of this Rule:
Added on 3 June 20193 June 2019.
3.8.7
Where a security quoted on SGX-ST or any recognised group A securities exchange has been suspended for more than 30 consecutive days, a Trading Member shall not permit its exposure to the security to increase in monetary value above the level subsisting on the 30th consecutive day of suspension until such time that the suspension has been lifted.
Added on 3 June 20193 June 2019.
3.9.1
A Remote Trading Member shall set appropriate thresholds to monitor its exposure to a single security.
Added on 3 June 20193 June 2019.
3.9.2
The Remote Trading Member shall immediately notify SGX-ST if its exposure to a single security exceeds its internal threshold.
Added on 3 June 20193 June 2019.
3.9.3
For the purposes of this Rule, "single security" and "exposure to a single security" shall have the meaning ascribed to it in Rule 3.8.
Refer to Practice Note 3.7 and 3.9.
Added on 3 June 20193 June 2019.
3.10.1
Subject to the margin financing requirements of this Rule, a Trading Member who is licensed to conduct product financing may extend credit facilities to customers for transactions in Specified Products.
Added on 3 June 20193 June 2019.
3.10.2
SGX-ST may exempt a Remote Trading Member from compliance with Rules 3.10.3 to 3.10.16, subject to any other requirements that SGX-ST may impose, if SGX-ST is of the view that the Remote Trading Member is subject to requirements of its Relevant Regulatory Authority that are comparable to the requirements in those Rules.
Added on 3 June 20193 June 2019.
3.10.3
Margin financing arrangements shall be evidenced in the form of a written agreement executed between the Trading Member and the customer.
Added on 3 June 20193 June 2019.
3.10.4
If a Trading Member seeks to mortgage, charge, pledge or hypothecate the assets of any customer who operates a margin financing account (such account being an account carried on the books of the Trading Member) with it, it shall:
- do so only in respect of a sum not exceeding the amount owed by the customer to the Trading Member and without obligation to retain in its possession or control assets of like character;
- ensure that it is given the discretion to sell or dispose of the assets in any manner in order to meet with the prescribed margin financing requirements; and
- before mortgaging, charging, pledging or hypothecating a retail customer’s assets:
- inform the retail customer that the Trading Member may mortgage, charge, pledge or hypothecate the retail customer’s assets but only for a sum not exceeding the amount owed by the customer to the Trading Member;
- explain to the retail customer the risks of mortgaging, charging, pledging or hypothecating the retail customer’s assets; and
- obtain the retail customer’s written consent to mortgage, charge, pledge or hypothecate the retail customer’s assets.
Added on 3 June 20193 June 2019 and amended on 1 April 2025.
3.10.4A
A Trading Member must not, in relation to any assets or monies received from a retail customer, enter into any contract, arrangement or transaction of which the purpose or effect is to transfer any right, interest, benefit or title in those assets or monies to itself or any other person, unless:
- in the case of assets, the contract, arrangement or transaction is entered into in connection with borrowing or lending of the retail customer’s Specified Products;
- in the case of monies, the contract, arrangement or transaction is entered into in connection with lending of the retail customer’s Specified Products; and
- the Trading Member complies with the relevant laws in relation to the borrowing or lending (as the case may be) of the retail customer’s Specified Products.
Added on 1 April 2025
3.10.5
A Trading Member who provides margin financing must obtain margin from each customer in respect of any margin financing account (such account being an account carried on the books of the Trading Member) and in respect of any credit facility provided to the customer for Specified Products transactions. The margin deposited by customers with the Trading Member shall be in the form of acceptable collateral and such other instruments as SGX-ST may from time to time prescribe.
Added on 3 June 20193 June 2019.
3.10.7
- A Trading Member shall not cause or permit the equity in a customer’s margin financing account (such account being an account carried on the books of the Trading Member) to be 110% of the debit balance in the customer’s margin financing account or less.
- Where the equity in a customer’s margin financing account is 110% of the debit balance in his margin financing account or less, the Trading Member:
- shall immediately require the customer to provide additional margin in the margin financing account within two Market Days from the date of the notice to increase the equity in the customer’s margin financing account to more than 110% of the debit balance in the customer’s margin financing account; and
- shall not cause or permit any new transaction to be made in the customer’s margin financing account, unless such new transaction will increase the percentage of equity over debit balance in the customer’s margin financing account.
Added on 3 June 20193 June 2019 and amended on 1 April 2025.
3.10.8
Where the customer fails to provide additional margin as required by the Trading Member under Rule 3.10.7, the Trading Member shall have the discretion to take such action as it may deem appropriate, including, liquidating the Specified Products purchased via the margin financing account and/or liquidating all or any acceptable collateral deposited to bring the equity to more than 110% of the debit balance without notice to the customer.
Added on 3 June 20193 June 2019.
3.10.9
A Trading Member shall review all margin financing accounts carried on the books of the Trading Member daily to ensure that credit is not over-extended beyond the approved facility limits and that the margin financing requirements and limits prescribed in this Rule 3.10 are met at all times. The Trading Member shall establish and maintain a robust framework to govern the conduct of such reviews.
Refer to Practice Note 3.10.
Added on 3 June 20193 June 2019 and amended on 1 April 2025.
3.10.10
A Trading Member shall have the discretion to impose higher margin financing requirements on any of its customers and/or to prescribe more stringent provisions on its customers than the provisions of this Rule 3.10.
Added on 3 June 20193 June 2019.
3.10.11
A customer may withdraw cash or assets from his margin financing account carried on the books of the Trading Member provided that:
- such withdrawal does not cause the equity in his account to fall to 110% of the debit balance or less; and
- the amount of cash withdrawn does not exceed the amount of cash balance held in his margin financing account at the point of withdrawal.
Added on 3 June 20193 June 2019 and amended on 1 April 2025.
3.10.12
A Trading Member shall not cause or permit:
Added on 3 June 20193 June 2019.
3.10.13
All transactions in a margin financing account carried on the books of the Trading Member shall be on a ready basis. The margin financing account shall not be used to meet margin requirements in respect of Marginable Futures Contracts.
Added on 3 June 20193 June 2019.
3.10.14
In computing the market value of Specified Products bought and carried in a customer's margin financing account (such account being an account carried on the books of the Trading Member) and the market value of acceptable collateral, the Trading Member shall apply such applicable haircuts as SGX-ST may prescribe from time to time.
Added on 3 June 20193 June 2019.
3.10.15
SGX-ST shall have the absolute discretion upon notice to the Trading Members to vary any or all of the margin financing requirements stipulated in this Rule 3.11 or any of the haircuts in Rule 3.10.14, and impose such other requirements for margin financing transactions from time to time as it deems fit and appropriate.
Added on 3 June 20193 June 2019.
3.10.16
For the purposes of this Rule 3.10, the terms:
- "acceptable collateral", "debit balance", "equity", "free financial resources" and "margin exposure" each has the meaning ascribed to them in Regulation 24(6) of the SFR (Financial and Margin Requirements);
- “assets” in relation to a customer has the meaning ascribed to “customer’s assets” in Regulation 15 of the SFR (Licensing and Conduct of Business);
- “cash balance" includes unutilised cash deposits, and cash from sales proceeds or corporate action events; and
- “retail customer” has the meaning ascribed to it in Regulation 2 of the SFR (Licensing and Conduct of Business).
Added on 3 June 20193 June 2019 and amended on 1 April 2025.
3.11.1
This Rule shall not apply to Remote Trading Members, who shall instead comply with such requirements established by the Relevant Regulatory Authority and any additional requirements that may be imposed by SGX-ST, and observe the principles of good business practice, in relation to the areas set out in this Rule.
Added on 3 June 20193 June 2019.
3.11.2
Before engaging in borrowing or lending transactions in Specified Products, a Trading Member must enter into a written agreement with the borrower or lender in accordance with Regulation 45(4) or, if the Trading Member borrows Specified Products from an Accredited Investor, Expert Investor or Institutional Investor, in accordance with Regulation 45(6) of the SFR (Licensing and Conduct of Business). Such agreement shall also provide for the matters set out in Rule 3.11.3.
Added on 3 June 20193 June 2019.
3.11.3
Collateral
Added on 3 June 20193 June 2019.
3.12.1
A Trading Member shall submit to SGX-ST such financial returns and statements, each in the format and by the time specified by SGX-ST, as SGX-ST may from time to time require, including but not limited to the following:
Refer to SGX Data Submission Website (https://esub.sgx.com) for the submission template.
Added on 3 June 20193 June 2019.
3.12.2
There shall be imposed upon the Trading Member a late fee of S$100 for each day that the statements are not submitted after the prescribed time or such extended time as SGX-ST may grant.
Added on 3 June 20193 June 2019.
3.12.3
Requests for extension of time shall be submitted to SGX-ST at least three Market Days prior to the due date for submission of the statements.
Added on 3 June 20193 June 2019.
3.12.4
A Trading Member shall be required to resubmit the statements and documents prescribed under Rule 3.12.1 and take such other steps as SGX-ST may require if the statements and documents are inaccurate or incomplete.
Added on 3 June 20193 June 2019.
3.13.1
A Trading Member shall:
Added on 3 June 20193 June 2019.
3.13.2
If SGX-ST is not satisfied with the performance of duties by an external auditor appointed by a Trading Member in relation to the Trading Member's activities on SGX-ST, it may:
Added on 3 June 20193 June 2019.
3.13.3
A Trading Member shall, within five months after the close of the financial year, furnish to SGX-ST the following information:
Added on 3 June 20193 June 2019.
3.13.4
Where, in the performance of his duties, the Trading Member's auditor becomes aware:
the auditor shall, and the Trading Member shall procure that the auditor shall, immediately report the matter to SGX-ST.
Added on 3 June 20193 June 2019.
3.13.5
A fee of S$200 may be imposed for each day that the statements are not submitted after the prescribed time or such extended time as SGX-ST may grant.
Added on 3 June 20193 June 2019.
3.13.6
Requests for extension of time shall be submitted to SGX-ST at least three Market Days prior to the due date.
Added on 3 June 20193 June 2019.
3.14.1
A Trading Member that is incorporated in Singapore shall make such provisions in its annual accounts as SGX-ST may from time to time require.
Added on 3 June 20193 June 2019.
3.15.1
Rules 3.15.2 to 3.15.5 shall not apply to a Remote Trading Member.
Added on 3 June 20193 June 2019.
3.15.2
A Trading Member that is incorporated in Singapore shall not reduce its paid-up ordinary share capital or paid-up irredeemable and non-cumulative preference share capital without the prior written approval of SGX-ST.
Added on 3 June 20193 June 2019.
3.15.3
Preference Shares
Added on 3 June 20193 June 2019.
3.15.4
Qualifying Subordinated Loan
Added on 3 June 20193 June 2019.
3.15.5
A Trading Member shall not, without the prior written approval of SGX-ST, make any unsecured loan or advance, pay any dividend or director's fees or increase any director's remuneration if:
Added on 3 June 20193 June 2019.
3.15.6
A Remote Trading Member shall notify SGX-ST immediately of any actions taken relating to:
Added on 3 June 20193 June 2019.
3.15.7
A Trading Member that holds a Capital Markets Services Licence must not issue or allot partly paid shares.
Added on 3 June 20193 June 2019.