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.