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Practice Note 11.7A.1, 11.8A.1 — Exposure to Single Customer and Single Security

Issue Date Cross Reference Enquiries
Added on 19 May 201419 May 2014 Rule 11.7A.1,
Rule 11.8A.1
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Facsimile No : 6538 8273

1. Introduction

1.1. Rules 11.7A.1 and 11.8A.1 require Trading Members that hold a licence specified in Rule 4.1.1(1)(b) to have in place adequate tools and procedures to monitor their exposure to a single customer or single security.
1.2. Such Trading Member may be required to demonstrate the adequacy of such tools and procedures. This Practice Note explains the tools and procedures which a Trading Member may have in place to satisfy the requirement for adequate tools and procedures.

2. Adequate Tools and Procedures

2.1. Tools and procedures to monitor a Trading Member's exposure to a single customer or single security which SGX-ST deems adequate include, but are not limited to the following:—
(a) The Trading Member may, based on its available financial resources, establish the level of concentration risks arising from exposure to a single customer or security acceptable to it. Thereafter, the Trading Member should monitor its exposures to a single customer or single security against such acceptable level of risk.
(b) The Trading Member may have in place adequate systems to monitor the Trading Member's exposure to customers on an individual customer and aggregated basis, and generate reports describing the results of such monitoring.
2.2. SGX-ST shall have the right to require such Trading Member to demonstrate the adequacy of such tools and procedures as it deems necessary.