5.12 Prohibited Trading Conduct

5.12.1

A Trading Member or a Trading Representative must not engage in any course of conduct that is likely to create a false or misleading appearance:

(a) of active trading in any security or futures contract; or

(b) with respect to the market for, or the price of, any security or futures contract.

Refer to Practice Note 5.12.

Added on 3 June 2019 3 June 2019.

SGX-ST's determination of whether a course of conduct is likely to create a false or misleading appearance will be made on an objective basis. The factors that SGX-ST will take into account when making that determination include but are not limited to the following:

(a) whether the execution of the transaction is inconsistent with the recent trading activity in the security or futures contract, taking into account prevailing market conditions;

(b) whether the execution of the transaction is likely to cause or contribute to a material change in the price of, or the market for, the security or futures contract, and whether the person involved or another person with whom the first person is collaborating may directly or indirectly benefit from alterations in the market or price;

(c) whether the execution of the transaction involves the placing of multiple buy and sell orders at various prices higher or lower than the market price, or the placing of buy and sell orders that give the appearance of increased volume;

(d) whether the execution of transaction is likely to coincide with or influence the calculation of reference prices, settlement prices and valuations;

(e) whether parties involved in the transaction are connected or associated with each other;

(f) whether the order or orders for the purchase (or sale) of a security or futures contract is or are entered with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the sale (or purchase) of the security or futures contract has been or will be entered by or for the same or different parties (excluding Direct Business);

(g) whether the execution of the transaction is likely to cause the price of the security or futures contract to increase or decrease, but following which the price is likely to immediately return to about its previous level;

(h) whether the bid (or offer) is higher (or lower) than the previous bid (or offer) but is withdrawn or amended to avoid execution;

(i) whether the volume or size of the order or transaction is excessive relative to reasonable expectations of the depth and liquidity of the market at the time;

(j) whether the buy (or sell) order is likely to trade with the entire best offer (or bid) volume and part of the offer (or bid) at the next price level;

(k) whether the buy (or sell) order forms part of a series of orders that successively and consistently increase (or decrease) the price of the security or futures contract; and

(l) whether there appears to be a legitimate commercial reason for the transaction.

Refer to Practice Note 5.12.

Added on 3 June 2019 3 June 2019.

5.12.3

A Trading Member or a Trading Representative must not effect, take part in, be concerned in, or carry out, directly or indirectly, any transaction to purchase or sell a security or futures contract, being a transaction that does not involve any change in the beneficial ownership of the security or futures contract as defined in Section 197(5) of the Securities and Futures Act. It is a defence if the Trading Member or Trading Representative can show that the purpose or purposes for which it or he purchased or sold the security or futures contract was not, or did not include, the purposes of creating a false or misleading appearance with respect to the market for, or the price of, the security or futures contract.

Refer to Practice Note 5.12.3.

Added on 3 June 2019 3 June 2019.

5.12.4

A Trading Member or a Trading Representative must not knowingly execute, or hold himself out as having executed, an order for the purchase or sale of futures contracts without having effected in good faith a purchase or sale of that futures contract in accordance with the order or with the business rules and practices of an organised market on which the derivatives contract is to be purchased or sold.

Added on 3 June 2019 3 June 2019.

5.12.5

A Trading Member or a Trading Representative must not deal in a security or futures contract in a manner that will or may have the effect of raising, lowering, maintaining or stabilising the price of the security or futures contract or its underlying (where applicable), with intent to induce other persons to subscribe for, purchase or sell the security or futures contract. This Rule 5.12.5 does not apply to stabilising action carried out in accordance with Regulations 3A or 3B of the Securities and Futures (Market Conduct) (Exemptions) Regulations 2006.

Added on 3 June 2019 3 June 2019.

5.12.6

A Trading Member or a Trading Representative must not disseminate information that is false or misleading if the Trading Member or Trading Representative:

(a) knows or ought reasonably to have known that the information was false or misleading in a material particular; or

(b) does not care whether the information is true or false.

Added on 3 June 2019 3 June 2019.

5.12.7

A Trading Member or a Trading Representative must not participate in any prohibited market conduct, including any insider trading, in securities or futures contracts under the Rules or any applicable law or regulations, or knowingly assist a person in such conduct.

Added on 3 June 2019 3 June 2019.

5.12.8

A Trading Member or a Trading Representative must immediately inform SGX-ST if it or he reasonably suspects, or knows of, any attempted market manipulation, insider trading, or any other prohibited trading conduct.

Added on 3 June 2019 3 June 2019.