Practice Note 6A.6 Forms of Collateral Acceptable by CDP as Margins

Issue Date Cross Reference Enquiries
Added on 21 January 201321 January 2013 and amended on 29 July 201329 July 2013. Rule 6A.6 Please contact Clearing Risk:

Facsimile No : 6532 0297
E-Mail Address: margins@sgx.com

1 Introduction

1.1. This Practice Note sets out the forms of collateral that CDP accepts as margins.

2 Forms of Monies and Assets Acceptable by CDP as Margins

2.1. Rule 6A.6.1 states, among other things, that CDP accepts the following forms of monies and assets as margins:
a) cash
b) Singapore and US government securities, and
c) selected common stocks, units of listed business trusts and units of real estate investment trusts.

Cash

2.2. Cash denominated in Singapore Dollars and US Dollars are accepted as collateral.

Singapore and US government securities, and selected common stocks

2.3. Singapore and US government debt securities of varying maturities are acceptable as collateral.
2.4. CDP also accepts constituent stocks of the MSCI Singapore Free Index and FSSTI Index as collateral. This may include units of listed business trusts and units of real estate investment trusts.

3 Collateral is subject to appropriate hair-cuts

3.1. The collateral, referred to in paragraph 2, are subjected to appropriate hair-cuts as prescribed by CDP to reflect the price risk of the collateral.
3.2. The haircuts for government securities are available on the SGX website
http://www.sgx.com/wps/portal/sgxweb/home/clearing/securities/acceptable_collaterals.