Practice Note 4.15.2(a) and (b) Opening of Customer Accounts: Obtaining Adequate Particulars, Verification of Identity, and Verification of Authority to Trade

1. Introduction

1.1

Rules 4.15.2(a) and (b) state that prior to opening a customer account, a Trading Member shall satisfy itself that it has (a) obtained adequate particulars of each customer, and (b) verified the identity of each customer, and in the case of a non-individual customer verified that it is validly constituted and that the person opening the account has the requisite authority to do so, and in the case of an agency customer, verified the identity of the principal and the customer's authority to trade for its principal.

Added on 3 June 2019 3 June 2019.

1.2

This Practice Note sets out some of the ways in which a Trading Member may comply with its obligations under Rule 4.15.2(a) and (b).

Added on 3 June 2019 3 June 2019.

2. Individual customer account

2.1

The particulars that a Trading Member may obtain include the following:

(a) full name;

(b) copy of identity card or passport;

(c) specimen signature (where applicable);

(d) residential and mailing addresses;

(e) telephone numbers;

(f) occupation;

(g) name of customer's employer;

(h) address of customer's employer; and

(i) telephone number of customer's employer.

Added on 3 June 2019 3 June 2019.

2.2

If the customer does not open the account in person, a Trading Member should take suitable steps to verify the customer's identity. The Trading Member may employ one or more of the following means to establish the customer's identity:

(a) Accept account opening forms that are certified by:

(i) a Justice of Peace, a commissioner for oaths, a notary public, or an advocate and solicitor;

(ii) members of other securities exchanges that have established information sharing agreements with SGX-ST; or

(iii) branches of banks in which the customer holds a banking account.

A Trading Member should verify the certification, for example through direct telephone contact with persons performing the certification.

(b) Establish telephone contact with the customer on an independently verified home or business number;

(c) With the customer's consent, contact the personnel department of the customer's employer on a listed business number to confirm his employment; or

(d) Obtain from the customer statements from a bank, the Central Provident Fund Board, income tax authority or such equivalent authority.

Added on 3 June 2019 3 June 2019.

3. Corporate/Non-individual customer account

3.1

The particulars that a Trading Member may obtain include the following:

(a) full name;

(b) residential and mailing addresses;

(c) full names of persons authorised to trade on the customer's behalf;

(d) specimen signatures of persons authorised to trade on the customer's behalf (where applicable);

(e) certified true copy of the certificate of incorporation of the customer;

(f) either:

(i) a copy of the directors' resolution of the customer approving the opening of a corporate/non-individual customer account with the Trading Member and empowering specific directors to trade in securities or futures contracts for the corporate/non-individual customer account and execute all documentation for trading and settlement in the customer account;

(ii) a power of attorney (in English) certified by a notary public authorising identified persons to open a corporate/non-individual customer account and trade on behalf of the corporate/non-individual customer; or

(iii) noting in writing the basis upon which the Trading Member believes the corporate/non-individual customer may open the corporate/non-individual customer account and engage in transactions and that the persons acting for the corporate/non-individual customer have been duly authorised to trade on the customer's behalf.

Added on 3 June 2019 3 June 2019.

4. Digital Signature

4.1

A Trading Member is encouraged to explore the use of digital signatures for online identification and verification. The identification and verification procedures for acceptance of digital signatures must be at least as rigorous as those which a Trading Member would normally have employed.

Added on 3 June 2019 3 June 2019.