Futures Trading Rules
Practice Note 2.6.3(1)(c) — Pre-Execution Checks
| Issue Date | Cross Reference | Enquiries |
| Added on 22 September 2006 and amended on 15 March 201315 March 2013, 14 November 201614 November 2016, 29 July 2022 and 25 April 2023. | Rule 2.6.3(1)(c) | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 This Practice Note provides further details on the pre-execution checks contemplated in Rule 2.6.3(1)(c).
2. Pre-Execution Checks
2.1 Rule 2.6.3(1)(c) requires Members to ensure that automated pre-execution risk management control checks are conducted on all orders, including credit control checks on all orders. The purpose of this is to prevent overtrading and for credit risk management. As such, the checks must be appropriately set to effectively limit the firm's risk exposure arising from all orders (including House orders) to prevent the taking on of excessive risk.
2.2 [Deleted]
2.3 Members who authorise Sponsored Access, or who permit or authorise their Customers access to the Connect Market, will be able to meet the requirement in Rule 2.6.3(1)(c) by using the appropriate pre-execution checks hosted by the Exchange, the Partner Market, or the Connect Broker for the Connect Market, or by directly setting and controlling the appropriate pre-determined automated limits in the customer's system, having automated alerts whenever such limits are altered, and by conducting regular post-execution reviews of trades. Members should assess and continue to ensure that the pre-execution risk management control checks are robust on an ongoing basis.
2.4 Where a Trading Member has allowed its Clearing Member to directly set and control pre-determined automated limits in the Trading Member's system, the Trading Member should have the appropriate internal controls to prevent unauthorised modification of the limits set by the Clearing Member.
Amended on 15 March 201315 March 2013, 14 November 201614 November 2016, 29 July 2022 and 25 April 2023.
Practice Note 2.6.3(1)(d) — Error-Prevention Alerts
| Issue Date | Cross Reference | Enquiries |
| Added on 15 March 201315 March 2013 and amended on 14 November 201614 November 2016. | Rule 2.6.3(1)(d) | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 This Practice Note explains the types of "error-prevention alerts" contemplated in Rule 2.6.3(1)(d).
2. Types of Error-Prevention Alerts
2.1 The types of error-prevention alerts to be made available should include but are not limited to the following:
(a) maximum quantity per order — to alert Approved Traders and customers of possible erroneous entries in relation to quantity; and
(b) price alerts — to alert Approved Traders and customers of possible erroneous entries in relation to price.
2.2 [Deleted]
Added on 15 March 201315 March 2013 and amended on 14 November 201614 November 2016.
Practice Note 2.6.3(1)(g) — Procedures for Separation of Key Functions
| Issue Date | Cross Reference | Enquiries |
| Added on 22 September 2006 and amended on 15 March 201315 March 2013. | Rule 2.6.3(1)(g) | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 This Practice Note explains the circumstances, conditions and operational procedures pursuant to the requirement to separate the credit control, trading, dealing and marketing departments of the Members, as set forth in Rule 2.6.3(1)(g).
2 Separation of Key Functions
2.1 The purpose of separating the Member's various key functions is to mitigate conflicts of interests among these functions, and ensure that there are sufficient checks and balances.
2.2 Examples of proper separation include:
(a) access into the dealing or trading room to be restricted to authorised personnel only;
(b) setting and authorising credit limits on Customers by senior management staff who are independent of trading or marketing functions, and are not related to the Customer in question; and
(c) setting and authorising trading limits on House Traders by senior management staff other than the House Trader himself.
Amended on 15 March 201315 March 2013.
Practice Note 2.6.3(2) — Firm-Level Monitoring of Capital and Financial Requirements and Prudential Limits
| Issue Date | Cross Reference | Enquiries |
| Added on 15 March 201315 March 2013. | Rule 2.6.3(2) | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 This Practice Note explains the requirement for monitoring potential breaches of capital and financial requirements and prudential limits on exposures to a single Customer and a single Contract set out in Rule 2.6.3 (2).
2. Firm-Level Monitoring of Capital Requirements and Prudential Limits
2.1 In an electronic trading environment where orders are processed and routed at speed, Members should use appropriate measures to monitor if the firm is at risk of breaching its capital or financial requirements or any prudential limits, for example:
(a) setting automated filters on firm-wide aggregated exposures;
(b) having processes to generate warnings; or
(c) having processes to route large value orders for review.
Amended on 15 March 201315 March 2013.
Practice Note 2.6.6 — Business Continuity Requirements
| Issue Date | Cross Reference | Enquiries |
| Added on 22 January 200922 January 2009 and 1 April 20141 April 2014. | Rule 2.6.6 | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 Rule 2.6.6 requires Members to:
(i) maintain adequate business continuity arrangements;
(ii) document business continuity arrangements in a business continuity plan;
(iii) test and review business continuity plans regularly; and
(iv) appoint emergency contact persons.
1.2 The objective is to ensure that Members have the ability to:
(i) React swiftly to emergency situations; and
(ii) Maintain critical functions and fulfill obligations to customers and counterparties in the event of major operational disruptions.
2. Business Continuity Plan
2.1 Critical Elements of a Business Continuity Plan
2.1.1 Rule 2.6.6(a) requires Members to maintain adequate business continuity arrangements, and document such arrangements in a business continuity plan. As a guide, a Member's business continuity plan should document the following elements:
(i) Risk assessment: This includes a comprehensive assessment of business continuity risks (including financial and operational risks) and threat scenarios which may severely disrupt a Member's operations. Such scenarios may include prolonged power outages, IT system software or hardware failures, loss of voice or data communication links, acts of terrorism, and outbreak of infectious diseases;
(ii) Business impact analysis: This is an evaluation of the impact of the risks and threat scenarios identified in (i) above. The business impact analysis should identify critical business functions (including support operations and related information technology systems) and potential losses (monetary and non-monetary) to enable the Member to determine recovery strategies/priorities and recovery time objectives;
(iii) Work area recovery: This refers to continuity arrangements for a Member's critical functional capabilities in the event that the Member's primary office becomes inaccessible, for example, availability of a disaster recovery site ready for activation within a reasonable period of time;
(iv) Crisis communications: This refers to a communications plan for the Member to liaise with its internal and external stakeholders such as employees, customers and regulatory authorities during a crisis;
(v) Roles and responsibilities: This refers to the identification of a Member's key personnel and management staff, their roles and responsibilities, and reporting lines. Alternates should be identified to cover the responsibilities of absent key personnel.
(vi) Backup for critical functions*, information technology systems and data;
* Critical functions refer to business functions whose failure or disruption may incapacitate the firm.
* Critical functions refer to business functions whose failure or disruption may incapacitate the firm.
(vii) Key service providers^: This refers to assessing a Member's dependencies on key service providers in recovery strategies and recovery time objectives, and taking steps to ensure that key service providers are capable of supporting the Member's business, even in disruptions;
^ Key service providers refer to third-parties who are performing functions that are not normally carried out by Member firms internally, but are critical to Member firms' ability to carry on business operations. For example, IT system hardware/software vendors.
^ Key service providers refer to third-parties who are performing functions that are not normally carried out by Member firms internally, but are critical to Member firms' ability to carry on business operations. For example, IT system hardware/software vendors.
(viii) Outsourcing service providers#: This refers to assessing whether the service provider has established satisfactory Business Continuity Plans commensurate with the nature, scope and complexity of the outsourced services; and
# Outsourcing service providers refer to third parties who are performing functions that would normally be performed by Members firms internally. For example, Operations and Technology.
# Outsourcing service providers refer to third parties who are performing functions that would normally be performed by Members firms internally. For example, Operations and Technology.
(ix) Any other elements that the Member deems necessary to be included in its business continuity plan or which the Exchange may prescribe from time to time.
2.2 Emergency Response During Crisis
2.2.1 A Member should establish and maintain a crisis management plan as part of its business continuity plan. The crisis management plan should include (but not be limited to):
(i) Emergency response procedures;
(ii) Roles and responsibilities of the crisis management team;
(iii) Command and control structures; and
(iv) Salvage and restoration procedures.
2.2.2 The Exchange may declare a wide-area crisis in the event of a major and widespread incident. When such declaration is made, the Exchange may require a Member to submit status reports to the Exchange. A wide-area crisis may include any incident where the operations of a large number of market participants are disrupted simultaneously.
2.3 Regular Review, Testing and Training
2.3.1 Rule 2.6.6(d) requires a Member to review and test its business continuity plan regularly. Members should do so at least once a year to ensure that their business continuity plans remain relevant.
2.3.2 Where there are material changes to a Member's business activities and operations, the Member should update its business continuity plan accordingly. Regular training should be conducted for staff to be updated and aware of any relevant changes to the Member's business continuity arrangements. As a principle, training should be conducted when:
(i) changes have been made to the Member firm's BCP; and
(ii) new staff are recruited.
Member firms should also conduct refresher courses for existing staff where appropriate.
2.4 Application to a General Trading Member that holds a licence specified in Rule 2.4.1(b)
2.4.1 The features of a business continuity plan set out in paragraphs 2.1, 2.2 and 2.3 may not be applicable to a General Trading Member that holds a licence specified in Rule 2.4.1(1)(b). The guidance for such Trading Members is set out in Practice Note 2.6.6; 3.3.3; 3.3.9; 3.3.10; 3.3.23.
3. Emergency Contact Persons
3.1 Rule 2.6.6(e) requires a Member to appoint emergency contact persons and furnish the contact information of such persons to the Exchange. Members may appoint an emergency contact person and up to two (2) alternates. A template is attached as Appendix A to this Practice Note for the notification of contact information (postal address, email, telephone, mobile telephone and facsimile numbers) to the Exchange.
Refer to Appendix A of Practice Note 2.6.6.
Refer to Appendix A of Practice Note 2.6.6.
3.2 Members are to ensure that the contact information provided to the Exchange is updated on a semi-annual basis. Nonetheless, where there are changes to a Member's emergency contact persons and contact information, the Member should notify the Exchange immediately in writing.
3.3 A Member's authorized emergency contact person should immediately notify the Exchange in the event where:
(i) A Member's business operations are or will be significantly disrupted; and/or
(ii) A Member's business continuity plan is activated.
Practice Note 2.6.6; 3.3.3; 3.3.9; 3.3.10; 3.3.23 — Operational Requirements for Trading Members Referred to in Rule 2.4.1(b)
| Issue Date | Cross Reference | Enquiries |
| Issued on 1 April 20141 April 2014 | Rule 2.6.6 Rule 3.3.3 Rule 3.3.9 Rule 3.3.9A Rule 3.3.10 | Please contact Member Supervision:— Facsimile No : 6538 8273 |
1. Introduction
1.1. The Exchange requires a Trading Member that does not hold a licence administered by the Monetary Authority of Singapore to meet the following operational requirements set out in the Rules:
a. maintain complete and accurate records pursuant to Rule 3.3.23;
b. send its customer a risk disclosure document setting out the risks associated with holding and trading in Contracts pursuant to Rule 3.3.3;
c. send statements of account and contract notes to its Customers pursuant to Rule 3.3.9;
d. segregate Customer's money and assets pursuant to Rule 3.3.10.
A Trading Member that does not hold a licence administered by the Monetary Authority of Singapore may meet the above operational requirements by complying with the applicable comparable requirements prescribed by its Relevant Regulatory Authority.
1.2. This Practice Note sets out the factors that the Exchange considers relevant when it reviews the requirements that the Trading Member is already subject to at the point of application, and on an ongoing basis, in the overseas market which it is carrying on business (“overseas market”).
2. Factors that the Exchange considers relevant
2.1. Complete and accurate records Pursuant to Rule 3.3.23, the Trading Member referred to in paragraph 1.1 should:
a. keep, or cause to be kept, such books as will sufficiently explain the transactions and financial position of its business and enable true and fair financial statements to be prepared from time to time;
b. keep, or cause to be kept, such books in such a manner as will enable them to be conveniently and properly audited;
c. retain such books required by the Relevant Regulatory Authority for a prescribed period.
2.2. Contract note Pursuant to Rule 3.3.9, the Trading Member referred to in paragraph 1.1 should issue to its Customer a contract note which should contain the following information:
a. name of the customer;
b. date on which the purchase or sale of Contracts is entered into;
c. the price, amount and description of the Contracts; and
d. settlement amounts.
In addition, the contract note should be sent to the Customer within a reasonable period from the execution of the trade.
2.3. Statement of account Pursuant to Rule 3.3.9, the Trading Member referred to in paragraph 1.1 should send to its Customer a statement of account which should contain the following information:
a. the price, amount and description of the Contracts;
b. the status and movements of every asset in the Trading Member's custody held for the customer, including any asset deposited with a third party, and the date, reasons of the movement and amount of the asset involved;
c. the movement and balance of money received on account of the Customer; and
d. any charges and credits to the Customer's account.
2.4. Risk disclosure statement Pursuant to Rule 3.3.3, the Trading Member referred to in paragraph 1.1 should provide its Customer a risk disclosure statement which should clearly state the features of Contracts and risks associated with holding and trading these instruments.
2.5. Customer's money and assets Pursuant to Rule 3.3.10, the Trading Member referred to in paragraph 1.1 should:
a. segregate Customers' monies and assets from the Trading Member's monies and assets; and
b. separately account for the monies and assets of each Customer.
3. Determination of Comparability of Operational Requirements
3.1. The Exchange may otherwise direct the Trading Member to follow the requirements set out in the Act and the Rules if the operational requirements referred to in paragraph 1.1 above are deemed to be of insufficient comparability.
3.2. The Exchange has the discretion to prescribe additional requirements where the Exchange is of the opinion that there is insufficient comparability between the Rules, and the requirements prescribed by the Relevant Regulatory Authority.
4. Business Continuity Requirements
4.1. In addition to meeting the operational requirements referred to in paragraph 1.1 above, the Exchange also requires the Trading Member referred to in paragraph 1.1 to meet any applicable business continuity plan requirements which are prescribed by the Relevant Regulatory Authority. The Trading Member may further adopt the recommended features in a business continuity plan set out in Practice Note 2.6.6.
Emergency Contact Persons
4.2. Rule 2.6.6 requires a Trading Member to appoint emergency contact persons and furnish the contact information of such persons to the Exchange. Members may appoint an emergency contact person and up to two (2) alternates. A template for the notification to the Exchange of contact information of such emergency contact persons (postal address, email, telephone, mobile telephone and facsimile numbers) is attached as Appendix A to this Practice Note.
4.3. Trading Members are to ensure that the contact information provided to the Exchange is updated on a semi-annual basis. Nonetheless, where there are changes to a Trading Member's emergency contact persons and contact information, the Trading Member should notify the Exchange immediately in writing.
4.4. A Trading Member's authorized emergency contact person should immediately notify the Exchange in the event where:
a. A Trading Member's business operations are or will be significantly disrupted; and/or
b. A Trading Member's business continuity plan is activated.
Added on 1 April 20141 April 2014.
Appendix A to Practice Note 2.6.6; 3.3.3; 3.3.9; 3.3.10; 3.3.23
Business Continuity Management Emergency Contact Person(s)
Company Name: __________________________________________________
| Name | Department | Designation | Office No. | Mobile No. | E-mail address |
Prepared by:
_______________________________
Name: _________________________
Designation: ___________________
Added on 1 April 20141 April 2014.
Practice Note 2.8.1 — Direct Market Access And Sponsored Access
| Issue Date | Cross Reference | Enquiries |
| Added on 15 March 201315 March 2013. | Rule 2, Rule 8.1 | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 This Practice Note provides further guidance on the definitions of Direct Market Access under Rule 2 and Sponsored Access under Rule 8.1 — Definitions.
2. Direct Market Access
2.1 Direct Market Access may take place in the following manner:
(a) where the Member permits its customer to use its member ID to transmit orders for execution directly to SGX-DT without using the Member's infrastructure. This is known as Sponsored Access.
(b) where the Member permits its customer to transmit orders electronically to the Member's infrastructure (i.e., system architecture, which may include technical systems and/or connecting systems), where the order is in turn automatically transmitted for execution to a market under the Member's member ID.
Amended on 15 March 201315 March 2013.
Practice Note 3.3.5 — Customer Education
| Issue Date | Cross Reference | Enquiries |
| Added on 22 September 2006 and amended on 15 March 201315 March 2013. | Rule 3.3.5 | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 This Practice Note sets out the areas of information, guidance and training that a Member should ensure that its Internet Trading Customers are provided with.
2. Information, Guidance and Training
2.1 A Member should ensure that its Internet Trading Customers are provided with adequate information, guidance and training with respect to the separately enumerated areas below.
2.2 Potential limitations and risks of Internet Trading, which include:
(a) possibility of delays in order transmission and confirmation of order execution, and what to do in case of such delays;
(b) not being able to withdraw erroneous orders in time due to the speed of electronic trading; and
(c) danger of unauthorised access to a Customer's Internet Trading account and recommended preventive security measures in relation to matters such as the protection of passwords and leaving an Internet Trading screen unattended.
2.3 Prohibited trading practices, which refer to trading practices prohibited under this Rules, the Act or other Singapore laws.
2.4 System functionalities and order management procedures, which include:
(a) system access requirements;
(b) how to place, modify and withdraw orders;
(c) types of trading controls e.g. types of error-prevention alerts and how to interpret system alerts; and
(d) types of credit controls e.g. types of trading limits and how the trading limits are computed.
2.5 Contract Specifications, which include:
(a) contract size;
(b) ticker symbol;
(c) Contract Months;
(d) minimum price fluctuation; and
(e) settlement basis.
Amended on 15 March 201315 March 2013.
Practice Note 3.3.16 — Transfer of Unsuccessful Give-Up Trades to House Account
| Issue Date | Cross Reference | Enquiries |
| Added on 22 September 2006. | Rule 3.3.16 | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 This Practice Note sets out the treatment of unsuccessful give-up trades.
2. Treatment of Unsuccessful Give-Up Trades
2.1 Members are encouraged to ensure that all give-up trades are promptly and properly booked out by the end of trade date (T). Also, trades meant to be given-up may be done in the Customer's give-up account. If by end of T+1, there are trades which have not been given up to and accepted by the accepting Clearing Member, the Member should transfer such trades to a designated House Account identified as "name of Member/ Unsuccessful Give-up Trades".
Practice Note 3.4.3A — Processes for Review of Orders and Trades
| Issue Date | Cross Reference | Enquiries |
| Added on 15 March 201315 March 2013. | Rule 3.4.3A | Please contact Member Supervision: Facsimile No : 6538 8273 E-Mail Address: membersup@sgx.com |
1. Introduction
1.1 This Practice Note provides guidance on what Members should do as part of their processes for post-execution review of orders and trades.
2. Guidance on processes
2.1 Members should adopt processes to place suspicious orders and trades on exception reports or to trigger automated alerts for review. Exception reports and alerts should be reviewed by an independent party like a compliance officer or other appropriately qualified person on a regular basis to detect orders and trades or patterns of orders and trades which give rise to the possibility of non-compliance with the Rules. The review process may involve further enquiry with Approved Traders, Registered Representatives and/or customers or reviewing other Approved Trader, Registered Representative or customer-related information such as past trading activity.
2.2 Members are expected to follow up on suspicious orders and trades, keep on file the result of their review process and report such activity to the Exchange pursuant to Rule 3.4.4. Additionally, Members are expected to take appropriate action, such as advising the Approved Trader, Registered Representative or customer to refrain from such activity, performing a closer monitoring of the account activity of the Approved Trader, Registered Representative or customer and ultimately to close the account if the suspicious activity persists. Members should note that the mere fact that an order has been placed on an exception report does not absolve them from their underlying compliance responsibilities.
3. Parameters to assist in detecting suspicious trading behaviour
3.1 The effectiveness of processes to identify suspicious trading behaviour depends to a large extent on the types of parameters and thresholds set. It may be necessary for the officer reviewing orders and trades to understand the strategies employed by the Member's Approved Traders, Registered Representatives or customers in order to determine the appropriate parameters and thresholds
3.2 Members should employ processes that facilitate the identification of irregular orders/trades regardless of whether they originate from one Approved Trader, Registered Representative or customer or a group of such individuals acting in concert. In addition, they should also be familiar with trading patterns so as to be able to identify irregular trades.
3.3 In setting parameters, Members should take note of Contracts which are illiquid which make them susceptible to price manipulation.
Amended on 15 March 201315 March 2013.
Practice Note 3.4.8 — Good Faith Bids and Offers
| Issue Date | Cross Reference | Enquiries | |
| Added on 22 September 2006. | Rule 3.4.8 | Please contact: Market Surveillance Mr Christopher Chong 6236-8316 Ms Sally Lim 6236-5172 Enforcement E-Mail Address : enforcement@sgx.com |
1. Introduction
1.1 This Practice Note sets out a situation where the Exchange may not consider a bid or offer to be in good faith.
2. Good Faith Bids and Offers
2.1 If the Exchange suspects that a bid or offer entered by a Member or Approved Trader is not in good faith for the purpose of executing bona fide transactions, the Member or the Approved Trader would have to satisfy the Exchange otherwise.
2.2 The following is one (1) of the situations where a price may not be considered as in good faith for the purpose of executing bona fide transactions:
Market is at 2505 bid and 2507 offer. The Approved Trader enters a 2506 bid and withdraws it within a short span of time with the intention to trigger stop orders or to give a false impression of the market.
Market is at 2505 bid and 2507 offer. The Approved Trader enters a 2506 bid and withdraws it within a short span of time with the intention to trigger stop orders or to give a false impression of the market.
Amended on 25 October 201225 October 2012 and 7 July 20157 July 2015.
Practice Note 3.4.9 — Fictitious Transactions Without Change in Ownership
| Issue Date | Cross Reference | Enquiries |
| Added on 22 September 2006. | Rule 3.4.9 | Please contact: Market Surveillance Mr Christopher Chong 6236-8316 Ms Sally Lim 6236-5172 Enforcement E-Mail Address : enforcement@sgx.com |
1. Introduction
1.1 This Practice Note sets out the recommended practice to avoid acting as buyer and seller in the same transaction.
2. Recommended Practice
2.1 To avoid acting as buyer and seller in the same transaction, a Member or Approved Trader is encouraged:
(a) to check all its outstanding orders in the Trading System;
(b) before entering an order, to withdraw any outstanding order entered by itself or its sponsoring Clearing Member on its behalf, which corresponds and is likely to match against the order which is to be entered; and
(c) to make use of tools designed to prevent self-trading.
Amended on 25 October 201225 October 2012, 7 July 20157 July 2015 and 14 November 201614 November 2016.
Practice Note 4.1.9 — Procedures for Order Withdrawal
| Issue Date | Cross Reference | Enquiries |
| Added on 22 September 2006 and amended on 19 January 201519 January 2015. | Rule 4.1.9 | Please contact Derivatives Market Control ("DMC"): Telephone No. : 6236 8433 Facsimile No : 6536 6480 E-Mail Address : derivatives.mc@sgx.com |
1. Introduction
1.1 This Practice Note explains the circumstances, conditions and operational procedures pursuant to which the Exchange would assist Members to effect order withdrawals.
1.2 As a general practice, Trading Members who face difficulties in effecting their order withdrawals should seek the assistance of their respective Clearing Members to withdraw their orders. For this purpose and where possible, Clearing Members should set up appropriate supervisory access to the trading system to administer such requests.
2. Technical Fault and Withdrawal by Exchange on Reasonable Efforts Basis
2.1 In the event of Technical Faults, the Exchange would assist in effecting order withdrawals at the request of the Members and subject to the terms and procedures set forth below. "Technical Faults" as used herein refers to any loss of connection to Exchange Systems which prevents a Member from effecting order withdrawals without the Exchange's assistance.
2.2 Order withdrawal by the Exchange in the event of Technical Faults would be effected on a reasonable endeavours basis. The Member agrees that the Exchange has no liability for order withdrawals and related activities conducted on behalf of a Member.
2.3 The Member indemnifies and will keep indemnified the Exchange against all actions, proceedings, claims, demands, damages, costs, expenses and any other amounts against or incurred by the Exchange arising out of or in connection with any action taken or any inaction by the Exchange, or any of the Exchange's officers, employees, agents, delegates or contractors with respect to such order withdrawals.
2.4 For the avoidance of doubt, nothing in this Practice Note should be construed as limiting a Member's obligation to install and maintain a robust and technically sound system, risk management processes or business continuity plans as required under the Rules or any applicable laws.
2.5 Members may request the Exchange to withdraw orders at the following levels:
(a) individual order level; or
(b) firm-wide order level.
3. Operational Safeguards and Discrepancies
3.1 A Member shall comply with the instructions and directions issued by DMC when effecting order withdrawals as contemplated herein. DMC also reserves the right to refuse any such request without providing any reason.
3.2 All verbal requests for order withdrawals ("Request") shall be recorded by DMC. Members are also required to comply with various operational safeguards and procedures as issued by DMC from time to time including matters relating to the:
(a) appointment of authorised firm coordinators by Members to effect order withdrawals and the provision of authentication details in connection therewith;
(b) making of a Request via telephone numbers as designated by DMC;
(c) submission of an order withdrawal form with the material information as requested by DMC; and
(d) processing of Requests at firm-wide order level and individual order levels.
3.3 If a Member finds any discrepancies between the order withdrawal form and the Request, the Member should notify DMC immediately with details of such discrepancies. Depending on the nature of the discrepancy, DMC would generally rely on the voice recording of the Request for its post-withdrawal investigations.
Practice Note 4.1.10 — Cross Trades
| Issue Date | Cross Reference | Enquiries |
| Added on 22 September 2006 and amended on 2 July 20072 July 2007. | Rule 4.1.10 | Please contact: Market Surveillance Mr Christopher Chong 6236-8316 Ms Sally Lim 6236-5172 Enforcement E-Mail Address : enforcement@sgx.com |
1. Cross Trades
1.1 In normal circumstances, the Exchange would consider that a cross trade was not prearranged if there is a time lag of ten (10) seconds between the entry of the first and second legs of the orders. However, if the time lag is less than ten (10) seconds, or the Exchange nevertheless suspects a cross trade was pre-arranged, the Member or the Approved Trader would have to satisfy the Exchange otherwise.
1.2 The following are examples on the application of Rule 4.1.10:
The Contract is NKH'06 with a tick size of 5 points.
Example (a)
The Approved Trader receives buy and sell orders at the same time and at price of 11715. The Approved Trader can expose either the buy or the sell order first.
Reason: Both the price of buy and sell orders are better than the prevailing 11710 bid and 11740 offer respectively.
Example (b)
The Approved Trader receives buy and sell orders at the same time and price at 11740. The Approved Trader shall expose the buy order first.
Reason: The buy order is a more attractive order than the sell order because there was an existing 11740 offer waiting to be "lifted".
Example (c)
The Approved Trader receives buy and sell orders at the same time and price at 11715. The Approved Trader shall expose the sell order first.
Reason: The sell order has a more attractive price because the opposite trader who "lifts" the offer will be buying at a price lower than the last traded price of 11740. On the contrary, the buy order has a less attractive price because the opposite trader who "hits" the bid will be selling at a price lower than the last traded price of 11740.
The Contract is NKH'06 with a tick size of 5 points.
| Example | Existing Bid | Existing Offer | Last traded price |
| (a) | 11710 | 11740 | 11740 |
| (b) | 11710 | 11740 | 11740 |
| (c) | None | None | 11740 |
Example (a)
The Approved Trader receives buy and sell orders at the same time and at price of 11715. The Approved Trader can expose either the buy or the sell order first.
Reason: Both the price of buy and sell orders are better than the prevailing 11710 bid and 11740 offer respectively.
Example (b)
The Approved Trader receives buy and sell orders at the same time and price at 11740. The Approved Trader shall expose the buy order first.
Reason: The buy order is a more attractive order than the sell order because there was an existing 11740 offer waiting to be "lifted".
Example (c)
The Approved Trader receives buy and sell orders at the same time and price at 11715. The Approved Trader shall expose the sell order first.
Reason: The sell order has a more attractive price because the opposite trader who "lifts" the offer will be buying at a price lower than the last traded price of 11740. On the contrary, the buy order has a less attractive price because the opposite trader who "hits" the bid will be selling at a price lower than the last traded price of 11740.
Amended on 25 October 201225 October 2012 and 7 July 20157 July 2015.