A Member which undertakes Agency Trades shall comply with the following additional obligations.
3.3.1 Customer Account and Know-Your-Customer Requirements
A Customer Account shall be identified and designated by the full name of the Customer and an account code. Prior to opening a Customer Account, a Member shall satisfy itself that it has:
in a manner consistent with industry best practices on know-your-customer requirements.
Refer to Regulatory Notice 3.3.1.
3.3.2 Management Approval Required for Opening Customer Accounts
At least one (1) management staff, or a management staff of a Related Corporation of that Member charged with the account approval function, is required to approve the opening of a Customer Account. Such management staff shall be independent of the Member's sales and dealing functions. The management staff's approval shall be in writing, maintained as a permanent record and obtained prior to the execution of the first trade of the Customer in that account.
3.3.3 Risk Disclosure Statement
*Refer to Regulatory Notice 3.3.3.
Amended on 25 August 200925 August 2009, 16 July 201216 July 2012, 1 April 20141 April 2014, 22 November 2021 and 18 January 2022.
3.3.4 Customer Instructions and Power of Attorney
A Member shall execute orders only upon receipt of instructions from a Customer which has opened accounts with the Member. Unless otherwise authorised by a Customer, the Member shall communicate solely with that Customer in respect of statements, contract notes, or any other information relating to the activities of that Customer. The Member shall obtain a power of attorney or proper written authorisation from its Customer before:
3.3.5 Customer Education
Save for Accredited Investors, a Member shall provide its Internet Trading Customers with adequate information, guidance and training with respect to the following matters:
With respect to Accredited Investors, a Member's obligation relates solely to the provision of adequate information, guidance and training in relation to prohibited trading practices.
Refer to Practice Note 3.3.5.
Amended on 15 March 201315 March 2013.
3.3.6 Orders Only Via Registered Representatives
Other than orders made via Internet Trading by Customers, a Member may only accept orders on behalf of Customers through its Registered Representatives.
Amended on 15 March 201315 March 2013.
3.3.7 Accepting Orders without Executing
A Member or a Registered Representative shall not accept orders from a Customer for contracts without causing such orders to be executed on the relevant markets and in accordance with the rules applicable to such markets. An Approved Trader shall execute such orders in accordance with the rules applicable to such markets.
3.3.8 Recording of Orders
Refer to Regulatory Notice 3.3.8.
Amended on 1 April 20141 April 2014.
3.3.8A Preventing Unauthorised Changes to Order Information
A Member must have in place controls to prevent unauthorised changes to order information entered into the Trading System.
Added on 15 March 201315 March 2013 and 14 November 201614 November 2016.
3.3.9 Customer's Statement of Account and Contract Note
Amended on 1 April 20141 April 2014.
3.3.10 Segregation of Customers' Monies and Assets and Fiduciary Obligations
Subject to Rule 3.3.10(b)(ii), the following requirements apply in relation to a Member's fiduciary obligations to its Customers:
"Customer" as used in this Rule 3.3.10 in relation to a General Trading Member that holds a licence to engage in a Regulated Activity and a Bank Trading Member does not include: (a) a director, officer, employee, Approved Trader or Registered Representative of the Member; or (b) an Affiliate of the Member.
Amended on 1 April 20141 April 2014 and 2 May 20162 May 2016.
3.3.11 Trading or Accepting Customer's Monies or Assets After Insolvency
Unless otherwise approved by the Exchange, a Member shall not trade, accept any Customer's monies or assets, or solicit any new orders after the Member's insolvency.
3.3.12 Customer Margins
Margins payable by a Clearing Member to the Clearing House shall be governed by the Clearing Rules. For margins applicable to Customers, margin calls and related matters, the following requirements apply:
For settlement currency denominated in Japanese Yen, 'reasonable period' in this Rule 3.3.12(e) means a period which shall not exceed three (3) Trading Days from the date that the Customer's Total Net Equity falls below the Maintenance Margins. For all other settlement currencies, it means a period which shall not exceed two (2) Trading Days from the date that the Customer's Total Net Equity falls below the Maintenance Margins;
Refer to Regulatory Notice 3.3.12
Amended on 1 April 20141 April 2014, 25 January 201725 January 2017, 18 January 2022 and 29 July 2022.
3.3.14 Inter-Exchange Cross Margining
Notwithstanding Rule 3.3.12, a Member may grant margin credit at a rate not exceeding that which is prescribed by the Clearing House, to a Customer which holds long and short positions on futures contracts (on the same underlying) which are traded on the Exchange and another exchange, to the extent that the risk on the position in one (1) exchange is set-off against another ("Inter-exchange Cross Margining") if the following conditions are satisfied:
*Refer to Regulatory Notice 3.3.14(g).
For the avoidance of doubt, Inter-exchange Cross Margining is not allowed for positions carried in Customer Accounts opened with different Members.
Amended on 1 April 20141 April 2014 and 22 April 201922 April 2019.
3.3.15 Transfer of Error Trades to House Account
The following requirements apply in relation to the transfer of error trades:
Amended on 2 May 20162 May 2016.
3.3.16 Transfer of Unsuccessful Give-Up Trades to House Account
A Member may enter into a give-up arrangement with a Customer and an accepting Clearing Member, provided that such arrangement is supported by a duly executed give-up agreement. If an executed trade is not successfully given up to and accepted by the accepting Clearing Member by the end of the Trading Day following the trade date (T+1), the Member shall transfer the give-up trade to a designated account meant for unsuccessful give-up trades. This designated account shall be a House Account, or such other account as the Exchange may permit. The Member shall conduct regular reviews and take action to clear the designated account.
Refer to Regulatory Notice 3.3.16.
Amended on 2 May 20162 May 2016.
3.3.16A Separate Accounts
A Member must maintain separate accounts for each Person whose account is carried on the books of the Member.
Added on 26 April 201326 April 2013.
3.3.17 Reporting of Account Identity
A Member shall submit to the Clearing House, in the manner as prescribed from time to time, the identities of the owners or controlling parties of any House Account or Customer Account which:
Refer to Regulatory Notice 3.3.17; 3.3.18; 3.3.26; 3.3.27.
"Customer Account" as used in this Rule 3.3.17 does not include an account owned by: (a) a director, officer, employee, Approved Trader or Registered Representative of the Member; or (b) an Affiliate of the Member. "House Account" as used in this Rule 3.3.17, is an account which is not a Customer Account as defined in this Rule 3.3.17.
Amended on 2 May 20162 May 2016.
3.3.18 Reporting of Open Positions
The following requirements apply in relation to the reporting of Open Positions:
* Refer to Regulatory Notice 3.3.17; 3.3.18; 3.3.26; 3.3.27.
3.3.19 Omnibus Accounts
A Member may carry Omnibus Accounts subject to such requirements and procedures as the Exchange may prescribe from time to time.
3.3.20 Limits on Omnibus Accounts
The Exchange may place limitations on a Member carrying Omnibus Accounts depending on:
- the number of Omnibus Accounts carried and volume of business of the Member; and
- the financial condition of the Member and the Omnibus Account holders in light of requirements or standards determined by the Exchange. A Member that carries Omnibus Accounts shall ensure that the Omnibus Accounts are operated at all times in accordance with this Rules including the relevant rules on position limits and position accountability, and shall, without prejudice to any other liability it may incur, indemnify the Exchange in relation to any claim referable to such violation.
Amended on 3 August 2020.
3.3.21 Disclosures Relating to Omnibus Accounts
An Omnibus Account holder shall at all times disclose to the Member carrying that account the gross long and short positions held in that Omnibus Account in each contract. Such Member shall immediately notify the Exchange and shall promptly comply with all orders of the Exchange if the Omnibus Account holder fails to make such disclosure. A Member that carries Omnibus Accounts shall ensure that its Omnibus Account holders are aware of this Rule.
3.3.22 Audit Trail
A Member shall be required to produce a complete audit trail of transactions, from the receipt of an order to its settlement, when so requested by the Exchange.
Refer to Regulatory Notice 2.6.4.
3.3.23 Record Keeping
A Member shall ensure that data and records are:
Amended on 1 April 20141 April 2014 and 18 January 2022.
3.3.23A Register of Securities
The following requirements apply in relation to the maintenance of a register of securities for Members, Registered Representatives and Approved Traders executing Agency Trades, except for General Trading Members that holds a licence specified in Rule 2.4.1(b) and their Registered Representatives and Approved Traders, that deal in Contracts that are classified as securities under the Act:
Added on 16 July 201216 July 2012 and amended on 1 April 20141 April 2014 and 18 January 2022.
3.3.24 IT and Data Security Requirements
A Member shall comply with all information technology and data security requirements the Exchange may prescribe from time to time including installing measures to prevent tampering of data and records.
3.3.25 ID Tags and Passwords
A Member shall issue unique identification tags and passwords to Customers and Approved Traders which have access to the Trading System through that Member.
Amended on 14 November 201614 November 2016.
3.3.26 Computations of Financial and Capital Requirements
A Member shall make and keep as a record, formal computations of its financial and capital requirements. The computations shall be in such form as the Exchange may prescribe and be submitted to the Exchange within such time as stipulated by the Exchange.
3.3.27 Submission of Financial Statements and Other Information to the Exchange
The Exchange may at any time require a Member to submit to the Exchange financial statements or other information in such form and pertaining to such matters and within such time as stipulated by the Exchange. The Member shall thereafter comply with such directions as the Exchange may in its sole discretion issue.
3.3.28 Certification by Auditor
The following requirements apply in relation to auditor certification of a Member's accounts:
within five (5) months of the end of its financial year or within such longer period as may be permitted in writing by the Exchange.
Amended on 25 August 200925 August 2009, 1 April 20141 April 2014 and 22 April 201922 April 2019.
3.3.29 Reporting Obligations of Auditors
A Member shall cause the external auditor referred to in Rule 3.3.28 to immediately report to the Exchange if:
Amended on 1 April 20141 April 2014.
3.3.30 Change of Auditors
Amended on 25 August 200925 August 2009 and 1 April 20141 April 2014.
3.3.31 Prohibition Against General Trading Member Acting as Guarantor
Unless approved by the Exchange, a General Trading Member that holds a licence to engage in a Regulated Activity and its Foreign Branches shall not act as guarantors or furnish a guarantee for the benefit of any Person, including a Related Corporation of such Member. For the avoidance of doubt, this prohibition does not apply to a Clearing Member's obligation to guarantee all trades to the Clearing House.
A General Trading Member that holds a licence specified in Rule 2.4.1(b) shall notify the Exchange immediately if it acts as guarantors or furnish a guarantee for the benefit of any Person, including a Related Corporation of such Member and such activity has or may have a financial or capital impact on the Trading Member and required to be reported to the Relevant Regulatory Authority.
Amended on 25 August 200925 August 2009 and 1 April 20141 April 2014.
3.3.32 Foreign Branch of General Trading Member
A General Trading Member licensed under the Act shall satisfy the following requirements prior to opening an overseas branch (the "Foreign Branch") and on a continuous basis:
* Refer to Annex F — Undertaking of Foreign BranchAnnex F — Undertaking of Foreign Branch.
Amended on 25 August 200925 August 2009 and 29 December 201429 December 2014.
3.3.33 Application of Rule 3.3
The following Rules shall not apply to a Trading Member that holds a licence specified in Rule 2.4.1(b).
Rule | Heading |
3.3.1 | Customer Account and Know-Your- Customer Requirements |
3.3.2 | Management Approval Required for Opening Customer Accounts |
3.3.4 | Customer Instructions and Power of Attorney |
3.3.5 | Customer Education |
3.3.15 | Transfer of Error Trades to House Account |
3.3.31 | Prohibition Against General Trading Member Acting as Guarantor |
A Trading Member that holds a licence specified in Rule 2.4.1(b) shall comply with such requirements established by the Relevant Regulatory Authority, if any, and principles of good business practice in relation to the areas set out in Rule 3.3.33.
Added on 1 April 20141 April 2014.