5.7 Exposure to Single Security

5.7.1

A General Clearing Member shall immediately notify CDP if the General Clearing Member's exposure to a single security (including in respect of any Exchange Trade of any Trading Member qualified by the General Clearing Member) exceeds:—

(1) in the case where the security is quoted on SGX-ST or any recognised group A securities exchange specified in the SFR (Financial and Margin Requirements), 300% of its average aggregate resources;

(2) in all where the security is quoted other than as specified in Rule 5.7.1(1), 100% of its average aggregate resources;

(3) in the case where the security is approved for quotation on SGX-ST or any recognised group A securities exchange but has not, as yet, been so quoted:—

(a) 100% of the average aggregate resources of the General Clearing Member if its aggregate resources is less than $75 million; or

(b) 150% of the average aggregate resources of the General Clearing Member if its aggregate resources is $75 million or more,

provided that the exposure under Rule 5.7.1(3) together with the exposure, if any, to securities already quoted, shall not exceed the limit specified in Rule 5.7.1(1); and

(4) 10% of its average aggregate resources if the security is unquoted, but shall not include any security issued by:—

(a) any subsidiary of the General Clearing Member which is established solely for the purpose of providing research, nominee, custodian or trustee services; or

(b) any other company which CDP may approve.

Amended on 1 July 2008 1 July 2008.

5.7.2

To reduce the General Clearing Member's risk exposure to a single security, CDP shall have the right to impose on the General Clearing Member such risk management measures as it deems necessary.

Amended on 1 July 2008 1 July 2008.

5.7.3

For the purpose of Rule 5.7.1, the full amount of the letter(s) of credit or any part thereof deposited pursuant to Rules 5.1C or 5.1G may be taken into account for the calculation of aggregate resources.

Amended on 1 July 2008 1 July 2008.

5.7.4

For the purpose of Rule 5.7.1, "exposure to a single security" means:—

(1) the amount of the single security underwritten or sub-underwritten by or placed with the General Clearing Member, after deducting the amount which the General Clearing Member has sub-underwritten or placed with:—

(a) a bank licensed under the Banking Act (Chapter 19);

(b) a merchant bank approved as a financial institution under the Monetary Authority of Singapore Act (Chapter 186);

(c) a finance company licensed under the Finance Companies Act (Chapter 108);

(d) a company or society registered under the Insurance Act (Chapter 142) to carry on insurance business as an insurer;

(e) the holder of a Capital Markets Services Licence under the SFA for dealing in capital markets products or for fund management;

(f) a financial institution outside Singapore which is licensed or regulated by a financial services regulatory authority in the country in which it is domiciled, and has a long-term credit rating of investment grade; and

(g) any other person, provided that:—

(i) full payment has been received by the General Clearing Member for the sub-underwritten, placed, sold or allotted amount; or

(ii) the sub-underwritten, placed, sold or allotted amount can be offset against collateral received by the General Clearing Member under a netting agreement.

(2) the book value of the single security carried long or the market value of the single security carried short in the General Clearing Member's own account carried on its books;

(3) for outstanding options in the single security carried in the General Clearing Member's own options trading account carried on its books:—

(a) the book value of options bought for the account;

(b) the excess of the market value of the underlying security over the exercise price of uncovered call options written for the account; and

(c) the excess of the exercise price of put options written for the account over the market value of the underlying security;

(4) in relation to the single security carried in a customer's cash accounts carried on the books of the General Clearing Member, the contract value of the single security to the extent that such amounts have not been paid for, or the market value of the single security to the extent that such securities have not been delivered, whichever is the higher;

(5) for outstanding options in the single security carried in the customer's options trading accounts carried on the books of the General Clearing Member:—

(a) the contract value of the options bought by the customer to the extent that such amounts have not been paid for;

(b) the excess of the market value of the underlying security over the exercise price of uncovered call options written by the customer; and

(c) the excess of the exercise price of put options written by the customer over the market value of the underlying security;

(6) the net amount of the single security borrowed or lent, as the case may be, by the General Clearing Member;

(7) in relation to a single security bought or carried, or deposited as collateral in the margin financing accounts carried on the books of the General Clearing Member, the margin exposure of the General Clearing Member to the single security as determined in accordance with the margin financing requirements prescribed by SGX-ST;

(8) the amount of interest receivable secured by the single security;

(9) the amount of loans and advances secured by the single security; and

(10) the amount under subscription by the General Clearing Member for its own account carried on its books in relation to a single security which is approved for quotation on SGX-ST or any recognised group A securities exchange but has not, as yet, been so quoted.

Amended on 1 July 2008 1 July 2008, 23 January 2009 23 January 2009, 1 July 2016 1 July 2016 and 8 October 2018 8 October 2018.

5.7.5

For the purpose of Rule 5.7.4, a security is deemed to be carried in a customer's cash account or a General Clearing Member's own account (such account being an account carried on the books of the General Clearing Member) on the contract date specified in the contract note in respect of the transaction in that security or on the exercise date specified in the exercise notice in respect of an option in that security which has been exercised.

Amended on 1 July 2008 1 July 2008 and 1 July 2016 1 July 2016.

5.7.6

For the purposes of Rule 5.7, in calculating exposure in any particular security, all outstanding options exercisable into that security shall be included in such computation.

5.7.6A

For the purposes of Rule 5.7.4(2) and Rule 5.7.4(4), in calculating exposure in any particular security, all futures contracts listed on any exchange with that security as an underlying shall be included in such computation.

Added on 3 April 2008 3 April 2008.

5.7.7

Rule 5.7 shall not apply to:—

(1) securities issued by the Singapore Government or any public authority in Singapore and

(2) the General Clearing Member's arbitrage transactions.

Amended on 1 July 2008 1 July 2008.

5.7.8

For the purpose of Rule 5.7, where a security quoted on SGX-ST or any recognised group A securities exchange has been suspended for more than thirty (30) consecutive days, a General Clearing 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.

Amended on 1 July 2008 1 July 2008.

5.7.9

In Rule 5.7, "single security" includes ordinary and preference shares, loan stocks, company warrants, structured warrants, transferable subscription rights, bonds, debentures, depository receipts, options and any other debt instruments or equity securities.

Amended on 3 April 2008 3 April 2008.