Rule 11 — Supervisory Rules

11.1 Clearing House Investigations

11.1.1

CDP may conduct an investigation if:—

(1) the investigation involves a possible breach of the SFA, the Clearing Rules or any Clearing Directives;

(2) CDP receives a written complaint involving a Clearing Member, director, officer, employee or agent;

(3) there is a dispute between Clearing Members on a clearing and settlement matter; or

(4) in CDP's opinion, the circumstances warrant it.

Amended on 3 June 2019 3 June 2019.

11.1.2

CDP shall conduct an investigation if the Authority directs it.

11.1.3

CDP may require a Clearing Member, any of its directors, officers, employees or agents to:—

(1) render all assistance as CDP requires, at CDP's premises or elsewhere; and

(2) provide CDP with information, books and records which, in CDP's opinion, may be relevant to the investigation.

11.1.4

A Clearing Member, directors, officer, employee or agent shall not wilfully make, furnish or permit the making or furnishing of any false or misleading information, statement or report to CDP.

11.1.5

CDP may appoint any person or persons to assist in its investigation (the "Clearing House Examiners").

11.1.6

CDP may delegate all or any of its powers under this Rule to the Clearing House Examiner. The Clearing House Examiner shall report the results of the investigation to CDP.

11.2 Clearing House Inspections

11.2.1

CDP may appoint any person or persons to conduct inspections of Clearing Members (the "Clearing House Inspectors").

11.2.2

CDP may conduct an inspection on a Clearing Member at any time.

A Clearing Member, director, officer, employee or agent shall give the Clearing House Inspector access to all information, books and records as requested. For the avoidance of doubt, reference to "information, books and records" in relation to a Bank Clearing Member shall refer to information, books and records falling within the Bank Clearing Member's business governed by this Clearing Rules.

Amended on 1 July 2008 1 July 2008.

11.2.4

CDP shall give a copy of the inspection report to the Clearing Member concerned.

11.2.5

CDP may charge a fee for the inspection. The fee is payable immediately by the Clearing Member concerned.

11.3 Disciplinary Action

11.3.1

If an investigation or inspection reveals that a Clearing Member, any of its directors, employees or agents has breached any Clearing Rule or Directive, CDP may take any of the following forms of disciplinary action, namely:

(1) to charge the Clearing Member before the Disciplinary Committee;

(2) to make an offer of composition to the Clearing Member, if the Rule violation is indicated in the third column of Schedule A as a compoundable Rule violation; or

(3) to issue a letter of warning to the Clearing Member.

Amended on 16 May 2011 16 May 2011.

11.3.2

If the Clearing Member does not accept the offer of composition or comply with the terms of the composition within the stipulated time as prescribed by CDP, CDP may refer the said Clearing Member to the Disciplinary Committee.

Added on 16 May 2011 16 May 2011.

11.3.3

Where CDP becomes aware of any incident of overtrading as described in Rule 10.11.1 of the SGX-ST Rules, CDP may, in its sole discretion, withhold any profits from the transaction that resulted in overtrading, or any other moneys, that are due or owing to the Clearing Member which qualified that trade, and may not release such profits or moneys until all disciplinary proceedings (including any appeal) in respect of that incident of overtrading have been concluded.

Added on 23 January 2009 23 January 2009 and amended on 16 May 2011 16 May 2011 and 3 June 2019 3 June 2019.

11.3A Composition by CDP

11.3A.1

CDP may make an offer of composition to a Clearing Member who has breached any Clearing Rule. The terms of the offer of composition include payment of a specified sum to CDP and may include the fulfillment of any accompanying terms that CDP may prescribe.

Added on 16 May 2011 16 May 2011.

11.3A.2

Upon payment of the specified sum and fulfillment of the accompanying terms within the stipulated time, no further proceedings shall be taken against that Clearing Member for that Rule violation.

Added on 16 May 2011 16 May 2011.

11.3A.3

Acceptance of the offer of composition by the Clearing Member amounts to an admission of liability and the Clearing Member will be deemed to have committed the conduct described in the charge.

Added on 16 May 2011 16 May 2011.

11.3A.4

In respect of Rule violations which CDP may offer composition, guidelines on the range of composition which CDP may offer to a Clearing Member who has committed a Rule violation are indicated in Schedule A.

Added on 16 May 2011 16 May 2011.

11.3A.5

CDP retains the discretion to offer composition to a Clearing Member of an amount which is lower or higher than the guidelines, except that the amount of composition that CDP may offer shall not exceed S$10,000 for each Rule violation.

Added on 16 May 2011 16 May 2011.

11.3A.6

Notwithstanding that a Rule violation is indicated as being compoundable or may be compoundable under Schedule A, CDP retains the discretion not to make an offer of composition to the Clearing Member and instead, to charge the said Clearing Member before the Disciplinary Committee.

Added on 16 May 2011 16 May 2011.

11.3A.7

If CDP has made an offer of composition, it will not commence disciplinary proceedings against a Clearing Member until after the stipulated period for the offer lapses.

Added on 16 May 2011 16 May 2011.

11.3A.8

For the purposes of determining whether a Rule violation is classified as a first, second, third or subsequent offence under Schedule A, only previous violations under the same Rule will be taken into consideration.

Added on 16 May 2011 16 May 2011.

11.4 Disciplinary Committee

11.4.1

The Disciplinary Committee shall comprise persons appointed by the SGX RegCo Board and shall not have a member who is, or who within three years of the proposed appointment date was, a director, officer or employee of:

(1) SGX; or

(2) any of SGX's related corporations.

Amended on 15 September 2017 15 September 2017 and 3 June 2019 3 June 2019.

11.4.2

The SGX RegCo Board shall appoint the chairman and deputy chairman of the Disciplinary Committee. In the absence of the chairman, the deputy chairman shall have all the authority of the chairman.

Amended on 15 September 2017 15 September 2017 and 3 June 2019 3 June 2019.

11.4.3 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.4.4 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.4.5 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.4.6 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.4.7

Procedures may be issued in relation to Disciplinary Committee proceedings. The procedures are binding on all the parties to the proceedings and may be varied by the Disciplinary Committee as provided in the procedures or these Clearing Rules. Where any matter is not dealt with by the procedures or these Clearing Rules, the Disciplinary Committee may establish its own procedures.

Refer to the [Disciplinary Committee and Appeals Committee Handbook].

Amended on 3 June 2019 3 June 2019.

11.5 Disciplinary Committee Powers

11.5.1

CDP may initiate disciplinary proceedings and charge a Clearing Member before the Disciplinary Committee if CDP is of the opinion that the Clearing Member has committed any of the following:—

(1) breached the SFA

(2) subject to Rules 11.3A.2 and 11.3A.7, breached the Clearing Rules or Clearing Directives,

(3) breached any relevant laws or regulations that govern the Clearing Member's other business activities,

(4) breached the rules of any other exchange,

(5) engaged in fraud or dishonesty, whether in or out of Singapore,

(6) breached directors duties,

(6A) engaged in conduct that has the effect of circumventing the Clearing Rules, the SFA, or any laws, regulations;

(7) engaged in conduct detrimental to the financial integrity, reputation or interests of CDP, other Clearing Members or the investing public.

Amended on 3 June 2019 3 June 2019.

11.5.1A

The Disciplinary Committee shall, as a tribunal of first instance, hear and determine charges brought by CDP against a Clearing Member pursuant to Rule 11.5.1. The Disciplinary Committee may exercise its powers against a Clearing Member if it is satisfied, on a balance of probabilities, that the Clearing Member has committed any of the matters set out in Rule 11.5.1.

Added on 3 June 2019 3 June 2019.

11.5.2

The Disciplinary Committee may exercise its powers against a Clearing Member if a director, officer, employee or agent breaches, or causes the Clearing Member to breach, the Clearing Rules or any Clearing Directives.

11.5.3

A former Clearing Member is bound by these Clearing Rules in respect of acts occurring before the registration ended or before expulsion. CDP and the Disciplinary Committee retain their respective jurisdiction, notwithstanding the ending of registration or expulsion.

11.5.4

The powers of the Disciplinary Committee include:—

(1) expelling a Clearing Member. The Disciplinary Committee may order a Clearing Member to be expelled notwithstanding that he has resigned

(2) suspending a Clearing Member;

(3) imposing a fine not exceeding S$250,000 per charge on a Clearing Member, or in the case of multiple charges, not exceeding S$1,000,000 per hearing;

(4) reprimanding (publicly or privately) a Clearing Member;

(5) requiring an education program to be undertaken;

(6) requiring a compliance program to be undertaken;

(7) imposing any restrictions or conditions on activities that a Clearing Member undertakes or in the case of a Bank Clearing Member, its business governed by this Clearing Rules;

(8) requiring compensation to be paid;

(9) ordering payment of fines by instalments, which shall not exceed 12 months from the date of imposition of the fine, unless otherwise permitted by the Disciplinary Committee;

(10) ordering a stay of the penalty imposed, pending an appeal to the Appeals Committee;

(11) requiring any director or in the case of a Bank Clearing Member, any director or person in a senior management position who is responsible for its business governed by this Clearing Rules, to step down from the day-to-day conduct of business affairs of the Clearing Member; and

(12) confirming, changing or discharging the appointment of a Manager under Rule 11.12.2(4).

Amended on 1 July 2008 1 July 2008 and 3 June 2019 3 June 2019.

11.5.6

A failure to comply with any sanction imposed by the Disciplinary Committee constitutes a breach of these Rules.

Added on 3 June 2019 3 June 2019.

11.5.5

Mandatory Minimum Penalties to be Imposed by Disciplinary Committee for certain Rule violations.

Where a mandatory minimum penalty has been stipulated for a particular Rule violation in the seventh column of Schedule A, the Disciplinary Committee:

(1) shall impose a penalty not lower than such minimum amount; and

(2) may choose to impose, in addition to the penalty in Rule 11.5.5(1), any one or more of the sanctions as set out in Rule 11.5.4.

Added on 16 May 2011 16 May 2011 and amended on 3 June 2019 3 June 2019.

11.5.6

A failure to comply with any sanction imposed by the Disciplinary Committee constitutes a breach of these Rules.

Added on 3 June 2019 3 June 2019.

11.6 Disciplinary Committee Proceedings

11.6.1 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.6.2 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.6.3 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.6.4 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.6.5 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.6.6 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.6.7 Decision of Disciplinary Committee

The Disciplinary Committee shall provide written grounds of its decision, which shall include any sanctions imposed against the Clearing Member, within a reasonable period after the conclusion of the hearing..

Amended on 3 June 2019 3 June 2019.

11.6.8 Notification of Decision

(1) The Disciplinary Committee shall cause its written grounds of decision to be published, unless the sanction imposed involves the issuance of a private reprimand. Where a private reprimand is issued by the Disciplinary Committee, the Disciplinary Committee shall determine whether the written grounds of decision are to be published in part or in whole.

(2) [deleted]

(3) Each Clearing Member irrevocably consents to the publication of the Disciplinary Committee's written grounds of decision pursuant to Rule 11.6.8. The consent will remain valid and effective notwithstanding that the Clearing Member ceases to be a Clearing Member. A Clearing Member cannot initiate any action or proceeding against CDP or the Disciplinary Committee for such publication.

Amended on 3 June 2019 3 June 2019.

11.7 Appeals Committee

11.7.1

The Appeals Committee shall comprise persons appointed by the SGX RegCo Board and approved by the Authority provided that:—

(1) the Appeals Committee shall not have a member who is, or who within three years of the proposed appointment date was, a Director, Officer or employee of:

(a) SGX; or

(b) any of SGX's related corporations;

(2) a majority of the Appeals Committee shall not be directors, officers or employees of any member of SGX or SGX's subsidiaries; and

(3) a majority of the Appeals Committee shall not be substantial shareholders of SGX or directors, officers or employees of any substantial shareholder of SGX.

Amended on 30 November 2005 30 November 2005, 15 September 2017 15 September 2017 and 3 June 2019 3 June 2019.

11.7.1A

The SGX RegCo Board shall appoint the chairman and the deputy chairman of the Appeals Committee. In the absence of the chairman, the deputy chairman will have all the powers of the chairman.

Added on 3 June 2019 3 June 2019.

11.7.2

The powers of the Appeals Committee include:—

(1) all the powers of the Disciplinary Committee;

(2) varying the sanctions imposed by the Disciplinary Committee, and overturning, varying or upholding any decision or specific findings of the Disciplinary Committee;

(3) hearing and deciding appeals in accordance with the Clearing Rules; and

(4) dealing with such other matters as the SGX RegCo Board gives it (either generally or in a particular case).

Amended on 15 September 2017 15 September 2017 and 3 June 2019 3 June 2019.

11.7.2A

A failure to comply with any sanction imposed by the Appeals Committee constitutes a breach of these Rules.

Added on 3 June 2019 3 June 2019.

11.7.3 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.7.4 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.7.5 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.7.6 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.7.7 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.7.8

Procedures may be issued in relation to Appeals Committee proceedings. The procedures are binding on all the parties to the proceedings and may be varied by the Appeals Committee as provided in the procedures or these Clearing Rules. Where any matter is not dealt with by the procedures or these Clearing Rules, the Appeals Committee may establish its own procedures.

Refer to the [Disciplinary Committee and Appeals Committee Handbook].

Amended on 3 June 2019 3 June 2019.

11.8 Appeals

11.8.1

CDP or the person charged may appeal against the decision of the Disciplinary Committee.

11.8.2

A decision of the Appeals Committee is final and binding.

Amended on 12 October 2005 12 October 2005.

11.9 Appeals Proceedings

11.9.1 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.9.2 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.9.3 Appeals by Rehearing

The Appeals Committee shall determine the appeal by way of rehearing. It shall only rehear that part of the decision of the Disciplinary Committee appealed against.

Amended on 3 June 2019 3 June 2019.

11.9.4 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.9.5 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.9.6 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.9.7 [Rule has been deleted.]

Deleted on 3 June 2019 3 June 2019.

11.9.8 Decision of Appeals Committee

(1) [deleted]

(2) The Appeals Committee shall provide written grounds of its decision, which shall include any sanctions imposed against the Clearing Member, within a reasonable period after the conclusion of the hearing.

(3) The Appeals Committee shall cause its written grounds of decision to be published, unless the sanction imposed involves the issuance of a private reprimand. Where a private reprimand is issued by the Appeals Committee, the Appeals Committee shall determine whether the written grounds of decision are to be published in part or in whole.

(4) Each Clearing Member irrevocably consents to the publication of the Appeals Committee's written grounds of decision pursuant to Rule 11.9.8. The consent will remain valid and effective notwithstanding that the Clearing Member ceases to be a Clearing Member. A Clearing Member cannot initiate any action or proceeding against CDP or the Appeals Committee for such publication.

Amended on 3 June 2019 3 June 2019.

11.10 Payment of Costs

11.10.1

The Disciplinary Committee or Appeals Committee may require the Clearing Member charged to pay all or part of the costs of the investigation, inspection or hearing.

11.10.2

The Committee may order the costs awarded to be paid within 14 days.

11.10.3

Where an order for costs of the proceedings has been imposed against a Clearing Member and the Clearing Member does not make payment within the specified period, the outstanding sum shall be a debt payable to CDP. CDP may commence legal action to recover that debt, subject to any subsequent payments made by the Clearing Member. CDP shall be entitled to claim reasonable interest, a month after the payment is due, based on the sum outstanding.

Added on 3 June 2019 3 June 2019.

11.11A Limitation of Liability

11.11A.1

No liability (whether in contract, tort or otherwise) shall be incurred by the Disciplinary Committee, Appeals Committee, CDP, or a manager appointed under Rule 11.12.2(4) for anything done or omitted to be done with reasonable care and in good faith in the course of or in connection with:

(1) the exercise or purported exercise of any power under the Rules;

(2) the performance or purported performance of any function or duty under the Rules; or

(3) the compliance or purported compliance with the Rules.

Added on 3 June 2019 3 June 2019.

11.11 Fine

11.11.1

A fine shall be paid within 14 days from the date of notice, or such longer time as the Chairman of the Disciplinary Committee or the Appeals Committee (as applicable), or his nominee, permits.

11.11.2

If a fine remains unpaid 7 days after the deadline, the Clearing Member's clearing rights is suspended. The suspension ends upon full payment of the fine.

11.11.3

Where a fine has been imposed against a Clearing Member and the Clearing Member does not make payment within the specified period, the outstanding sum shall be a debt payable to CDP. CDP may commence legal action to recover that debt, subject to any subsequent payments made by the Clearing Member. CDP shall be entitled to claim reasonable interest, a month after the payment is due, based on the sum outstanding.

Added on 3 June 2019 3 June 2019.

11.12 Interim Powers of CDP

11.12.1

Without prejudice to the rights and powers of CDP or any other body or person under the Clearing Rules,

(1) CDP may suspend, or otherwise restrict the activities of a Clearing Member if it is charged with:—

(a) an offence under the SFA, or

(b) an offence involving fraud or dishonesty, whether in or out of Singapore, or

(c) an offence relating to director's duties; or

(d) an offence under any relevant law or regulation which governs the Clearing Member's other business activities.

(2) The suspension or restriction ends if the Clearing Member is acquitted or the charge is not proceeded with.

Amended on 3 June 2019 3 June 2019.

11.12.2

If CDP is of the opinion that:—

(1) a Clearing Member has, or may have, insufficient capital for the conduct of its business, or

(2) a review should be carried out in respect of a Clearing Member's management policies or business conduct in the interests of the Clearing Member, CDP, other Clearing Members or the investing public,

CDP may do any or all of the following:—

(1) require the Clearing Member to operate its business or in the case of a Bank Clearing Member, its business governed by this Clearing Rules, subject to such restrictions or conditions as CDP decides.

(2) suspend the Clearing Member for a period CDP decides. The suspension shall be announced to all Clearing Members. During the suspension, the Clearing Member:—

(a) shall not clear new transactions without the approval of CDP.

(b) remains liable to complete all contracts outstanding at the time of suspension. However, it shall not deliver any securities or settle any transaction without the approval of CDP.

(3) require any director or in the case of a Bank Clearing Member, any director or person in a senior management position who is responsible for its business governed by this Clearing Rules, to step down from day-to-day conduct of the business affairs of the Clearing Member; and

(4) appoint a Manager to manage the business of the Clearing Member or in the case of a Bank Clearing Member, its business governed by this Clearing Rules. CDP shall fix the remuneration of the Manager, which shall be paid by the Clearing Member. The Clearing Member is solely responsible for the Manager's acts and defaults. The Manager shall carry out directions given by CDP in relation to the business of the Clearing Member, including carrying on the business of the Clearing Member in accordance with instructions.

Amended on 1 July 2008 1 July 2008.

11.12.3

Subject to Rule 11.12.4, CDP shall notify the Clearing Member in writing before it exercises any of its powers under this Rule.

11.12.4

If, in CDP's opinion, it is necessary to protect the financial integrity, reputation or interests of CDP, other Clearing Members or the investing public, it may exercise its powers under this Rule without prior notice to the Clearing Member. CDP shall notify the Clearing Member in writing after it has exercised the powers.

11.12.5

CDP shall refer the matter (together with an account of its exercise of the interim powers) to the Disciplinary Committee for a decision within 14 days of CDP's notification of its actions under this Rule. The Disciplinary Committee proceedings in Rule 11.6 apply. The Disciplinary Committee may expedite the proceedings if it thinks fit. CDP's notification shall serve as the written notice under Rule 11.6.1.