SGX Rulebooks
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17.1 Application of Chapter

17.1.1

This Chapter does not apply to a Trading Member:

(1) when it borrows (lends) securities from (to) a person who is an accredited investor; or
(2) who holds a licence specified in Rule 4.1.1(1)(b). Such a Trading Member 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 Chapter 17 for its business activities on SGX-ST.

Amended on 19 May 201419 May 2014.

17.2 Agreement

17.2.1

Before engaging in borrowing or lending transactions in Specified Products, a Trading Member must enter into a written agreement with the borrower or lender in accordance with Regulation 45(4) or, if the Trading Member borrows Specified Products from an Accredited Investor, Expert Investor or Institutional Investor, in accordance with Regulation 45(6), of the Securities and Futures (Licensing & Conduct of Business) Regulations. Such agreement shall also provide for the matters set out in Rule 17.3.1A.

Amended on 27 January 201227 January 2012 and 8 October 20188 October 2018.

17.2.2 [Rule has been deleted.]

Deleted on 8 October 20188 October 2018.

17.3 Collateral

17.3.1A

Where a Trading Member lends Specified Products to any person, it must obtain collateral in accordance with this Rule 17.3.

Added on 27 January 201227 January 2012.

Amended on 18 September 201218 September 2012 and 8 October 20188 October 2018.

17.3.1

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.

Amended on 8 October 20188 October 2018.

17.3.2

The collateral must be in the form as specified in Regulation 45(9) of the Securities and Futures (Licensing & Conduct of Business) Regulations.

Amended on 23 January 200923 January 2009 and 27 January 201227 January 2012.

17.3.3

The value of collateral obtained 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.

Amended on 8 October 20188 October 2018.

17.3.4

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.

Amended on 8 October 20188 October 2018.

17.3.5

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:

(1) the borrower does not provide the additional collateral by the close of the second Market Day from the date of notice; or
(2) the collateral value falls below 100% of the market value of the loaned Specified Products, whichever occurs earlier.

Amended on 8 October 20188 October 2018.

17.3.6

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.

Amended on 8 October 20188 October 2018.

17.3.7

SGX-ST may vary the percentage in Rules 17.3.3, 17.3.4, 17.3.5 and 17.3.6 or apply discounts to the value of collateral.

17.3.8

A Trading Member may require additional collateral from the borrower or apply discounts to the value of the collateral.