Collateral
(a) Where a Trading Member lends Specified Products to any person, it must obtain collateral in accordance with this Rule 3.11.3.
(b) A Trading Member must obtain collateral from a borrower of Specified Products by the close of the Market Day before delivering the loaned Specified Products to the borrower.
(c) The collateral must be in the form as specified in Regulation 45(9) of the SFR (Licensing and Conduct of Business).
(d) The value of collateral obtained by the Trading Member from the borrower must be at least 105% of the market value of the loaned Specified Products throughout the period that the Specified Products are lent. For the purpose of this Rule 3.11.3, "market value" shall have the same meaning as set out in Regulation 45(9) of the SFR (Licensing and Conduct of Business).
(e) If the value of collateral falls below 105% of the market value of the loaned Specified Products, a Trading Member must, by the next Market Day, notify the borrower to provide additional collateral to bring the value of collateral to at least 105% of the market value of the loaned Specified Products by the close of the second Market Day from the date of notice. A Trading Member must not allow any new borrowings until the value of the collateral is restored to at least 105% of the market value of the loaned Specified Products.
(f) A Trading Member may, without notice to the borrower, realise the collateral and apply the proceeds to buy back Specified Products to close off the loan position if:
(i) the borrower does not provide the additional collateral by the close of the second Market Day from the date of notice; or
(ii) the collateral value falls below 100% of the market value of the loaned Specified Products,
whichever occurs earlier.
(g) A Trading Member may allow a borrower to withdraw collateral, provided that the remaining collateral value is at least 105% of the market value of the loaned Specified Products after the withdrawal.
(h) SGX-ST may vary the percentages set out in this Rule 3.11.3 and/or specify the haircuts to be applied by Trading Members to the value of collateral.
(i) A Trading Member may require additional collateral from the borrower over and above the requirements set out in this Rule 3.11.3.
(j) A Trading Member may apply haircuts to the value of the collateral that are higher than any specified by SGX-ST.
Added on 3 June 20193 June 2019.