15.1.1
The research department of a Trading Member must engage only in the following activities:—
Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.
15.1.1A
Unless exempt under the Securities and Futures Act or the Securities or Futures Regulations, prior to engaging in research activities, a Trading Member and its research staff must obtain the appropriate licence.
Added on 3 April 20083 April 2008.
15.1A.1
This Chapter shall not apply to a Trading Member who holds a licence specified in Rule 4.1.1(1)(b). Such a Trading Member shall comply with such requirements established by the Relevant Regulatory Authority, if any, and principles of good business practice in relation to the areas set out in Chapter 15 for its business activities on SGX-ST.
Added on 19 May 201419 May 2014.
15.2.1
A Trading Member must inform SGX-ST in writing at least 14 days before it establishes a research department.
15.2.2
A Trading Member must supply SGX-ST with any information SGX-ST requires regarding the proposed establishment.
15.2.4
SGX-ST may require a Trading Member to end any research activity if:—
15.2.5
If SGX-ST requires a Trading Member to end its research activity, the Trading Member may, within 14 days after it is notified of SGX-ST's decision, appeal in writing to the SGX RegCo Board whose decision will be final.
Amended on 15 September 201715 September 2017.
15.3.1
A Trading Member must:—
15.3.2
A Trading Member is responsible to SGX-ST for the acts and omissions of its research analysts.
15.3.3
SGX-ST may limit the scope of activity of a research analyst or direct a Trading Member to replace a research analyst if the person:—
15.3.4
A Trading Member may, within 14 days after it is directed by SGX-ST to replace a research analyst, appeal in writing to the SGX RegCo Board whose decision will be final.
Amended on 15 September 201715 September 2017.
15.4.1
A Trading Member's research activities must be separate from its dealing, corporate finance and back office operations. Separation means at least having the following:—
15.5.1
A Trading Member must:—
15.6.1
A Trading Member must maintain records of its research report or investment recommendation for 7 years.
15.7.1
A Trading Member and a research analyst must disclose:—
Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.
15.8.1
A Trading Member and a research analyst must not:—
Amended on 3 April 20083 April 2008 and 8 October 20188 October 2018.
16.1.1
Unless exempt under the Securities and Futures Act or the Securities and Futures Regulations, prior to engaging in corporate finance activities, a Trading Member and its corporate finance staff must obtain the appropriate licence and be appropriately registered.
Amended on 3 April 20083 April 2008 and 29 November 201029 November 2010.
16.1.2
The corporate finance department of a Trading Member must engage only in the following types of activities:—
Amended on 3 April 20083 April 2008.
16.1A.1
This Chapter shall not apply to a Trading Member who holds a licence specified in Rule 4.1.1(1)(b). Such a Trading Member shall comply with such requirements established by the Relevant Regulatory Authority, if any, and principles of good business practice in relation to the areas set out in Chapter 16 for its business activities on SGX-ST.
Added on 19 May 201419 May 2014.
16.2.1
A Trading Member must inform SGX-ST in writing at least 14 days before it engages in corporate finance activities under Rule 16.1.
16.2.2
A Trading Member must supply SGX-ST with any information SGX-ST requires regarding the corporate finance activities.
16.2.4
SGX-ST may require a Trading Member to end any of its corporate finance activities if:—
16.2.5
If SGX-ST requires a Trading Member to end any of its corporate finance activities, the Trading Member may, within 14 days after it is notified of SGX-ST's decision, appeal in writing to the SGX RegCo Board whose decision will be final.
Amended on 15 September 201715 September 2017.
16.3.1
The corporate finance department must have adequate staff with relevant expertise and experience.
16.3.2
A Trading Member must:—
16.3.3
A Trading Member is responsible to SGX-ST for the acts and omissions of its corporate finance staff.
16.3.4
SGX-ST may limit the scope of activity of a corporate finance staff or direct a Trading Member to replace a corporate finance staff if the person:—
16.3.5
A Trading Member may, within 14 days after it is directed by SGX-ST to replace a corporate finance staff, appeal in writing to the SGX RegCo Board whose decision will be final.
Amended on 15 September 201715 September 2017.
16.4.1
A Trading Member's corporate finance activities must be separate from its dealing, research and back office operations. Separation means at least having the following:—
16.4.2
A Trading Member may have a research analyst assist in a corporate finance project. If so, the Trading Member must have procedures to avoid any conflict of interest.
16.4.3
Other departments of the Trading member may provide accounting, personnel support and other support services to the corporate finance department but the Trading Member must ensure that confidentiality of corporate finance customers is preserved.
16.5.1
Underwriting commitment limits must be set by those members of the senior management of the Trading Member who are independent of the corporate finance and dealing departments.
16.6.1
A Trading Member must ensure that corporate finance staff do not divulge any confidential information to any person who is not entitled to receive the information.
16.6.2
A Trading Member must ensure that corporate finance staff exercise due care to prevent any leak of confidential information.
16.7.1
A restricted list of securities on which the corporate finance department is working must be maintained.
16.7.2
A security must be moved onto the restricted list no later than the date the deal is mandated.
16.7.3
If circulated, the restricted list may be circulated to only the following persons:—
16.7.4
Staff who are privy to the Restricted List must not deal in securities listed therein, or in any derivative of such securities, either for the Trading Member's account, their own accounts or accounts over which they have control and influence.
Amended on 3 April 20083 April 2008.
Chapter 17 — Securities Borrowing and Lending of Specified Products
Amended on 8 October 20188 October 2018.
17.1.1
This Chapter does not apply to a Trading Member:
Amended on 19 May 201419 May 2014.
17.2.1
Before engaging in borrowing or lending transactions in Specified Products, a Trading Member must enter into a written agreement with the borrower or lender in accordance with Regulation 45(4) or, if the Trading Member borrows Specified Products from an Accredited Investor, Expert Investor or Institutional Investor, in accordance with Regulation 45(6), of the Securities and Futures (Licensing & Conduct of Business) Regulations. Such agreement shall also provide for the matters set out in Rule 17.3.1A.
Amended on 27 January 201227 January 2012 and 8 October 20188 October 2018.
17.3.1A
Where a Trading Member lends Specified Products to any person, it must obtain collateral in accordance with this Rule 17.3.
Added on 27 January 201227 January 2012.
Amended on 18 September 201218 September 2012 and 8 October 20188 October 2018.
17.3.1
A Trading Member must obtain collateral from a borrower of Specified Products by the close of the Market Day before delivering the loaned Specified Products to the borrower.
Amended on 8 October 20188 October 2018.
17.3.2
The collateral must be in the form as specified in Regulation 45(9) of the Securities and Futures (Licensing & Conduct of Business) Regulations.
Amended on 23 January 200923 January 2009 and 27 January 201227 January 2012.
17.3.3
The value of collateral obtained from the borrower must be at least 105% of the market value of the loaned Specified Products throughout the period that the Specified Products are lent.
Amended on 8 October 20188 October 2018.
17.3.4
If the value of collateral falls below 105% of the market value of the loaned Specified Products, a Trading Member must, by the next Market Day, notify the borrower to provide additional collateral to bring the value of collateral to at least 105% of the market value of the loaned Specified Products by the close of the second Market Day from the date of notice. A Trading Member must not allow any new borrowings until the value of the collateral is restored to at least 105% of the market value of the loaned Specified Products.
Amended on 8 October 20188 October 2018.
17.3.5
A Trading Member may, without notice to the borrower, realise the collateral and apply the proceeds to buy back Specified Products to close off the loan position if:
Amended on 8 October 20188 October 2018.
17.3.6
A Trading Member may allow a borrower to withdraw collateral, provided that the remaining collateral value is at least 105% of the market value of the loaned Specified Products after the withdrawal.
Amended on 8 October 20188 October 2018.
17.3.8
A Trading Member may require additional collateral from the borrower or apply discounts to the value of the collateral.
18.1.1 Applicability
These Rules shall be applicable to the trading on SGX-ST of Options listed or quoted on SGX-ST, the terms and conditions of such Options, the exercise and settlement thereof, the handling of orders and the conduct of accounts and other matters relating to Options trading. Except as otherwise specified in this Chapter, the Rules and Directives shall, where applicable, apply to the trading of Options on SGX-ST.
18.1.2 Definitions
In this Chapter, (except where the context otherwise requires):—
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Term | Meaning |
B | |
"Buyer"; | the term "buyer" in relation to underlying securities refers to the buyer of the underlying securities covered by an exercised Option. |
C | |
"Call Option" | means an Option which gives the Purchaser thereof the right in accordance with the terms of the Option, to buy a Standard Quantity of the underlying security at the Exercise Price. |
"CDP System" | refers to the computerised Central Depository System maintained by CDP whereby transfers of securities are effected on a book-entry basis. |
"Class of Options" or "Class" | means in relation to any Option, either:— (1) all Call Options covering the same underlying security; or (2) all Put Options covering the same underlying security. |
"Customer"; | the term "customer" in respect of any Trading Member shall include any Trading Representative, Director, employee or officer of the Trading Member. |
"Closing Purchase Transaction"; | the term "closing purchase transaction" means an Option transaction which eliminates the short position created by an opening written transaction. |
"Closing Written Transaction"; | the term "closing written transaction" means an Option transaction which eliminates the long position created by an opening purchase transaction. |
D | |
"Depository Agent" | means an entity registered as a Depository Agent with CDP for the purpose of maintaining sub-accounts for its own account and for the account of others. |
"Distribution"; | the term "distribution", unless otherwise determined by SGX-ST, shall mean capital issue, stock split, consolidation, reconstruction, or other similar action (other than cash distribution made out of profits) in respect of any underlying security. |
E | |
"Equity Market" | means the market in stocks and shares conducted by SGX-ST. |
"Exercise Notice" | means a notice (for the time being current) for the exercise of the Options as prescribed from time to time by the OCC, copies of which may be obtained from Trading Members. |
"Exercise Price" | means the specified price per unit of the Standard Quantity at which the underlying security may be purchased or sold upon exercise of the Option subject to such adjustments by SGX-ST in accordance with Rule 18.10. |
"Expiration Date" | means in relation to an Option, the last Friday of the Expiration Month in relation to such Option or if such day is not a Market Day on which the Equity Market for the underlying security is open for trading, the Market Day preceding that day. |
"Expiration Month" | means in relation to an Option, the month in which the Option expires. |
"Explanatory Booklet" | means a booklet approved from time to time by SGX-ST to be furnished to each customer of a Trading Member who opens an Options trading account which provides information to investors on the trading of Options. |
L | |
"Lodgement"; | the term "lodgement" and "lodged" in relation to an Exercise Notice shall refer to the notification of the exercise of an Option to the OCC by the Trading Member in accordance with the Regulations. |
"Long Position"; | the term "long position" means the number of outstanding Options of a given Series of Options held by a Purchaser. |
O | |
"OCC" | means the Options Clearing Company (Pte) Limited or its successor company. |
"Opening Purchase Transaction"; | the term "opening purchase transaction" means an Option transaction which creates a long position in the Option. |
"Opening Written Transaction"; | the term "opening written transaction" means an Option transaction which creates a short position in the Option. |
"Option" | means an option contract which is either a Put Option or a Call Option traded or reported through the Trading System. |
"Options Market" | means the market in stock and share options conducted by SGX-ST. |
"Option transaction" | means a transaction traded on or reported through the Trading System in relation to the purchase or writing of an Option. |
"Options trading account"; | the term "options trading account" means a trading account opened by a customer with a Trading Member for the purpose of trading in Options. |
"Outstanding"; | the term "outstanding" in relation to an Option means an Option which has not been the subject of a closing transaction nor been exercised nor reached its Expiration Date. |
P | |
"Premium" or "premium" | means in relation to an Option transaction, the price per unit of such Option agreed upon between the Purchaser and Writer in such transaction. |
"Purchaser" | means in relation to an Option, the purchaser of the Option. |
"Put Option" | means an Option which gives the Purchaser thereof the right in accordance with the terms of the Option, to sell a Standard Quantity of the underlying security at the Exercise Price. |
R | |
"Regulations" | means the Regulations for Options business of the OCC for the time being in force. |
S | |
"Same side of the market" | means in respect of Options positions either:— (1) long positions in Put Options and short positions in Call Options; or (2) short positions in Put Options and long positions in Call Options. |
"Seller"; | the term "seller" in relation to underlying securities refers to the seller of the underlying securities covered by an exercised Option. |
"Series of Options" or "Series" | means all Options of the same Class of Options having the same Exercise Price and Expiration Date. |
"Scrip-Covered Call Option" | means a Call Option in which the obligations of the Writer have been fully secured by the deposit of the underlying security to be delivered to the buyer upon an exercise of the said Option. |
"Securities Account" | means the securities account maintained by a direct account holder or a Depository Agent with CDP. |
"Short Position"; | the term "short position" means the number of outstanding Options of a given Series of Options with respect to which a person is obligated as a Writer. |
"Standard Quantity" | means in relation to an Option, the quantity of underlying securities prescribed from time to time by SGX-ST as the number of the underlying securities covered by the Option subject to such adjustments by SGX-ST in accordance with Rule 18.10. |
U | |
"Underlying Securities"; | the term "underlying securities" in relation to an Option means (in the case of a Call Option) the security which the Purchaser shall be entitled to buy upon the exercise of the Option and which the Writer shall be obligated to deliver or (in the case of a Put Option) the security which the Purchaser shall be entitled to sell upon the exercise of the Option and which the Writer shall be obligated to buy. |
"Uncovered"; | the term "uncovered" in relation to any Call Option means that the Call Option is not a Scrip-Covered Call Option. |
W | |
"Writer" | means in relation to an Option, the seller of the Option. |
Amended on 3 April 20083 April 2008.
18.2.1 Approval of Options for Listing or Quotation and Trading
SGX-ST may from time to time approve for listing or quotation and trading on SGX-ST, Put Options and Call Options in respect of approved underlying securities. Subject to giving prior notification, SGX-ST may remove the listing or quotation of any Series of Options when there are no outstanding positions in such Series.
18.2.2 Approval of Underlying Securities
SGX-ST may from time to time approve underlying securities as being suitable for Options trading on SGX-ST.
18.2.3 Criteria for Approval of Underlying Securities
SGX-ST may from time to time establish criteria to be considered in evaluating potential underlying securities for Option transactions. The fact that particular securities may meet the criteria does not necessarily mean that they will be approved as underlying securities. In special situations an underlying security may be approved even though it does not meet all of the criteria established.
18.2.4 Withdrawal of Approval of Underlying Securities
Whenever SGX-ST determines that underlying securities previously approved for Option transactions do not meet the then current requirements for continuance of such approval or for any other reason should no longer be approved, SGX-ST shall not open for trading any additional Series of Options covering those underlying securities and any opening purchase transactions in Options of that Series previously opened may be prohibited to the extent that SGX-ST shall deem necessary for the maintenance of a fair and orderly market or for the protection of Purchasers or Writers of Options.
18.3.1 Registration
Option transactions shall be registered with the OCC in accordance with its Regulations. An Option shall be deemed to be registered by the issuance of the contract statement by the OCC on behalf of the Trading Member to the Purchaser or Writer thereof.
18.3.2 Responsibility on Registration
18.3.3 Series of Options Open for Trading
18.3.4 Terms of Options
18.3.5 Adjustments to Terms
18.3.6 Suspension of Trading
18.3.7 Resumption of Trading
The trading of Options that have been the subject of suspension under Rule 18.3.6(1) may be resumed upon the determination of SGX-ST that the conditions which led to the suspension are no longer present or that the interests of a fair and orderly market are best served by a resumption of trading.
18.4.1
Subject to the Regulations and in accordance with the Rules and Directives:—
The Purchaser of a Call Option has the right, beginning 1 Market Day after the Option is registered and expiring on the Expiration Date, to purchase the Standard Quantity of the underlying securities represented by such Option at the Exercise Price from such person as the OCC may from time to time designate. The Writer of a registered Call Option is obligated, upon the allocation to him of an Exercise Notice by the OCC, to sell and deliver the Standard Quantity of the underlying securities represented by such Option to such person as the OCC may from time to time designate.
The Purchaser of a Put Option has the right, beginning 1 Market Day after the Option is registered and expiring on the Expiration Date, to sell and deliver the Standard Quantity of the underlying securities represented by such Option at the Exercise Price to such person as the OCC may from time to time designate. The Writer of a registered Put Option is obligated, upon the allocation to him of an Exercise Notice by the OCC, to purchase the Standard Quantity of the underlying securities represented by such Option from such person as the OCC may from time to time designate.
18.4.2 Position Limits
No person shall exceed the position limits prescribed by SGX-ST for outstanding positions in Options. Outstanding positions in Options in excess of the applicable position limits shall be liable to be closed off in accordance with Rule 18.5.6.
18.5.1 Members Prohibited from Opening Transactions that would Violate Individual Position Limits
Except with the prior written approval of SGX-ST in each instance, no Trading Member shall, for any account in which it has an interest or for the account of any customer, effect an opening transaction in an Option of any Class dealt on SGX-ST if that Trading Member has reason to believe that as a result of such transaction the Trading Member or its customer would, acting alone or in concert with others directly or indirectly, hold or control or be obligated in respect of an aggregate position (whether short or long) in excess of the individual position limits set out as follows:—
18.5.2 Market Position Limits
Notwithstanding Rule 18.5.1 the total number of outstanding Options on both sides of the market of any underlying security shall not exceed 15% of the issued capital of the issuer of the underlying security. This limit shall be known as the market position limit.
18.5.3 Position Limits Subject to Change
SGX-ST may from time to time vary the individual position and market position limits in Rules 18.5.1 and 18.5.2 respectively by a circular issued to all Trading Members, such new position limits to take effect on such date specified therein. Such new position limits shall not, unless otherwise stated, affect existing Options positions.
18.5.4 Definition of "Control"
18.5.5 Reports Relating to Position Limits
18.5.6 Closing Off Positions
Whenever SGX-ST shall determine that a person or group of persons acting in concert holds or controls, or is obligated in respect of, an aggregate position (whether long or short) in all Options of 1 or more Classes or Series dealt in on SGX-ST in excess of the applicable position limits, it may order all Trading Members carrying a position in Options of such Classes or Series for such person or persons to enter into closing transactions in respect of such outstanding positions as expeditiously as possible consistent with the maintenance of a fair and orderly market. Whenever such an order is given, no Trading Member shall accept any order to write, purchase or exercise any Option for the account of the person or persons named in the order, unless in each instance express approval therefor is given by SGX-ST, or until such order is rescinded.
18.5.7 Trading Member's Duty to Inform Customers of Position Limits
It shall be the responsibility of each Trading Member and Trading Representative accepting orders for opening transactions (purchase or written) in Options to inform customers of the applicable position limits and not to accept orders from any customer if the Trading Member or Trading Representative has reason to believe that the customer, acting alone or in concert with others, has exceeded or is attempting to exceed such position limits.
18.5.8 Limit on Uncovered Short Positions
Whenever SGX-ST or the OCC shall determine in light of current conditions in the Options Market or in the Equity Market that there are outstanding an excessive number of percent of uncovered short positions in Options of a given Class dealt in on SGX-ST, SGX-ST or the OCC may prohibit any further opening written transactions in Options of that Class unless the short position is created by a Scrip-Covered Call Option and it may prohibit the uncovering of existing Scrip-Covered Call Options in 1 or more Series of that Class as it deems appropriate in the interests of maintaining a fair and orderly market in such Options or in the underlying securities, or otherwise deems advisable in the public interest or for the protection of investors.
18.5.9 Other Restrictions on Option Transactions and Exercises
SGX-ST or the OCC shall be empowered to impose, from time to time in its discretion, such restrictions on Option transactions or the exercise of Options in 1 or more Series of Options of any Class dealt in on SGX-ST as SGX-ST or the OCC deems advisable in the interests of maintaining a fair and orderly market in Options, or in the underlying securities or otherwise deems advisable in the public interest or for the protection of investors. During the effectiveness of such restrictions, no Trading Member shall, for any account in which it has an interest or for the account of any customer effect any Option transaction or accept Exercise Notices to exercise any Option in contravention of such restrictions.
18.6.1 Trading Hours
Unless otherwise determined by SGX-ST, the trading hours for Options shall be the same as the Equity Market. SGX-ST may by notice extend or vary the trading hours for the Options Market.
18.6.2 Trading on the Trading System
Amended on 3 April 20083 April 2008.
18.6.3 Minimum Bids
Unless otherwise determined by SGX-ST, minimum bids for Options trading shall be the same rate prevailing for minimum bids in the Equity Market.
18.6.4 Direct Business
Amended on 3 April 20083 April 2008.
18.6.5 Settlement of Premiums
18.6.6 Failure by Customers to Pay Premium
If a customer fails to make payment of the Premiums payable to a Trading Member despite being requested to do so by the Trading Member, then the Trading Member shall be entitled to enter into a closing purchase or written transaction as the case may be, in respect of the same Option for which the Premiums were due, charging any loss arising therefrom (including commissions and other costs) to the defaulting customer.
18.6.7 Failure to Pay Premium or Deliver — Trading Member
Failure by a customer to pay the Premiums due shall not affect the Trading Member's obligations as the registered holder of the Options to the OCC under the Regulations. The Trading Member affected shall have recourse in accordance with the foregoing Rule 18.6.6.
18.6.8 Closing Transactions
All closing transactions shall be made through the same Trading Member with whom the opening purchase or opening written transaction is executed or where the outstanding Options position has been transferred to another Trading Member in accordance with Rule 18.7.7 the closing transaction shall be made through that Trading Member.
18.7.1 Approval of Customer's Options Trading Account
18.7.2 Diligence in Opening Account
Before opening an Options trading account, a Trading Member shall exercise due diligence to learn the essential facts concerning the customer. A record of this information shall be maintained by the Trading Member. Based upon such information, an Executive Director of the Trading Member shall approve in writing the opening of the customer's Options trading account.
18.7.3 Undertaking to be Obtained
18.7.4 Documents to be Furnished
18.7.5 Contract Statements to Customers
The contract statements for the Option transactions of a Trading Member's customer shall be sent to the customer by the OCC on behalf of the said Trading Member on the next Market Day after an Option transaction date indicating, in respect of each Option transaction:—
18.7.6 Required Courses/Fees
18.7.7 Transfers of Options Positions
A customer who intends to transfer his outstanding Options position from one Trading Member to another shall obtain the consent to the transfer from the Trading Member with whom he has his outstanding Options positions and shall obtain the transferee Trading Member's consent to accept his outstanding Options positions before the transfer.
18.7.8 Transactions with Issuers
No Trading Member shall accept an order for the account of any company which is the issuer of underlying securities or for the account of any subsidiary of such company for the writing or purchase of an Option with respect to underlying securities of that issuer.
18.7.9 Due Authorisation for Option Transactions
No Option transactions shall be effected on behalf of customers without proper authorisation being given by the customers.
18.7.10 Taking of Orders by Customers
When taking an order, the Trading Member shall establish proper procedures to ensure that the customers' orders shall contain the following details:—
18.7.11 Communication with the Public
18.8.1 Margins Payable on Opening Written Transactions
Customers of Trading Members shall be required by Trading Members to deposit proper and adequate margins in respect of any opening written transaction effected on their behalf by the Trading Member as security for the due performance of their obligations as Writers of the Option in accordance with Rule 18.8.3.
18.8.2 Scrip-Covered Call Options
18.8.3 Margin Securities
Trading Members shall accept the deposit of margin securities from their customers in respect of their opening written transactions on the following terms:—
18.8.4 Margin Requirements
18.8.5 Maintenance of Margin
18.8.6 Margin Prescribed is Minimum
The amount of margin prescribed by the OCC is the minimum which must be required initially and subsequently maintained. However, nothing in this Chapter shall be construed as preventing a Trading Member from requiring higher margins from its customers.
18.9.1 Exercise Cut-Off Time
For every Series of Options traded on SGX-ST, the exercise cut-off time; being the latest time prior to the expiration of such Series at which a Trading Member will accept exercise instructions from customers, shall be not later than 12.30 p.m. on the Expiration Date.
18.9.2 Exercise through Trading Member
The holder of an unexpired outstanding Option may exercise the Option only through the Trading Member with whom he has the outstanding long position in the Option by submitting an Exercise Notice duly completed and signed by the exercising Option holder.
18.9.3 Allocation of Exercise Notices to Customers
18.9.4 Notification to the OCC of Exercise Notices
18.9.5 Effect of Exercise of Option — Deemed Contract
Subject to Rule 18.9.7, upon the allocation of an Exercise Notice of an Option, the exercise shall take effect as if it were a purchase and sale of the underlying security on SGX-ST and the Rules and Directives of SGX-ST shall thereafter apply to the exercise as if it were a contract for the purchase and sale of the underlying security.
18.9.6 Option Exercisable Upon Payment of Premium
Trading Members shall not accept the lodgement of any Exercise Notice by a customer unless and until the aggregate Premium payable in respect of the Option has been paid in full.
18.9.7 Due Date of the Contract for the Underlying Securities Upon Exercise
Unless otherwise provided by SGX-ST, the due date for the contract for the purchase and sale of the underlying security upon the exercise of an Option shall be the fourth Market Day after the Exercise Date.
18.10.1 Adjustments in the Event of a Distribution
In the event of a distribution in respect of any underlying securities, the number of outstanding Options and/or the Standard Quantity and/or the Exercise Price with respect to all Options outstanding in those underlying securities shall be adjusted, effective on the relevant "ex-date" of dealings in the underlying securities in the Equity Market in accordance with this clause.
18.10.2 Rounding Off Fractions
The adjusted Exercise Price shall be rounded to the nearest 1 cent and the adjusted Standard Quantity shall be rounded to the nearest whole share.
18.10.3 Bonus Issue
18.10.4 Rights Issue
In the case when underlying securities become entitled to rights, the Exercise Price for the underlying securities ex rights shall be calculated by deducting from the Exercise Price for the underlying securities the value of the rights accruing to such underlying securities calculated on the last done price, or in the case where the underlying securities is a Prescribed Security, the closing price, of the underlying securities on the last day on which such underlying securities are traded cum rights, unless otherwise determined by SGX-ST.
Amended on 24 February 201424 February 2014.
18.10.5 Other Distribution
In the case of any distribution for which adjustment is not provided in any of the foregoing clauses, or in the case of any event for which adjustment is provided in one of the foregoing clauses but is not considered by SGX-ST to be appropriate under the circumstances, SGX-ST shall make such adjustments in the Exercise Price, Standard Quantity or number of Options with respect to the Options affected by such event as SGX-ST in its sole discretion determines to be fair to the Purchasers and Writers of such Options.
18.10.6 Dividends
In the event of a dividend declared in respect of any underlying securities, no adjustments shall be made to the number of outstanding Options or the Standard Quantity or the Exercise Price with respect to all Options outstanding in those underlying securities.
18.11 Delivery and Settlement Procedures in the Event of A Distribution
In the event of a distribution, delivery and settlement procedures following the lodgement of an Exercise Notice with the OCC shall be as follows:—
18.11.1 Bonus Issue — Exercise Notice during "Cum Bonus" Period
Where the distribution is in the form of a bonus issue and the Exercise Notice is lodged with the OCC on or after the date the Option Series has commenced trading "cum bonus" but before the "ex date", delivery shall be effected of the Standard Quantity of the underlying securities, including the bonus securities. Where the accruing bonus securities have yet to be received from the issuer, delivery of the bonus securities shall be effected as soon as the issued accruing bonus securities are received from the issuer.
18.11.2 Bonus Issue — Exercise Notice before "Cum Bonus" Period
Where the distribution is in the form of a bonus issue and the Exercise Notice is lodged with the OCC before the period the Option Series has commenced trading "cum bonus" (notwithstanding the seller be advised of the allocation on or after the Option Series commenced trading "cum") delivery shall be effected of the Standard Quantity of the underlying securities only.
18.11.3 Bonus and Rights Issues — Exercise Notices On or After "Ex Date"
18.11.4 Rights Issue — Exercise Notice During "Cum Rights" Period
18.11.5 Rights Issue — Exercise Notice Before "Cum Rights" Period
Where the distribution is in the form of a rights issue and the Exercise Notice is lodged with the OCC before the period the Option Series has commenced trading "cum rights" (notwithstanding the seller be advised of the allocation on or after the Option Series commenced trading "cum") delivery shall be effected of the Standard Quantity of the underlying securities only.
18.11.6 Other Distribution
In the event of any distribution not covered by the foregoing Rules or in the case of any event in respect of which the foregoing Rules apply but is not considered by SGX-ST to be appropriate under the circumstances, SGX-ST or the OCC shall prescribe such delivery and settlement procedures as SGX-ST or the OCC in its sole discretion determines to be fair to the Purchasers or Writers of such Options.
18.11.7 Dividends
In the event of a dividend declared in respect of any underlying securities:—
18.11.8 Seller of Underlying Securities in Short Position
In lieu of delivery of the underlying securities where the seller is in a short position, the OCC may from time to time:—
18.12.1 Commission on Options
Unless otherwise determined by SGX-ST, the rates of charge for commission on both opening and closing Option transactions shall be the same as the rates of charge for commission in the Equity Market.
18.12.2 Clearing Fees
A clearing fee of 0.05% of the aggregate Premium, subject to a maximum fee of $200, shall be payable to the OCC, such clearing fee to be collected and paid by the Trading Member to the OCC. The OCC may, at its discretion, waive or reduce the clearing fees payable by any person trading in Options under a scheme approved by SGX-ST.
18.12.3 Commission and Clearing Fees on Exercise of Options
The prevailing commission rates pertaining to sale and purchase transactions in the Equity Market shall be applicable to the acquisition or disposition of the underlying securities on the exercise of an Option and shall be calculated on the aggregate Exercise Price of the underlying securities.
18.12.4 Stamp Duty
18.13.1 OCC to Issue Notices and Communications
The OCC shall be empowered to issue notices, guidelines, circulars and announcements in respect of any matter in this Chapter on behalf of SGX-ST.
18.13.2 Disciplinary Action for Breach of Regulations
Any breach of the Regulations shall be deemed to be a breach of this Chapter and SGX-ST may take disciplinary action in accordance with the Rules against any Trading Member (notwithstanding that it was acting in its capacity as a Clearing Member of the OCC) for violation of the Regulations or for errors, delays and conduct detrimental to the operations of the OCC.
19.1.1 Applicability
This Chapter shall be applicable to the listing and trading of Marginable Futures Contracts on SGX-ST, the terms and conditions of such Marginable Futures Contracts, the handling of orders, the conduct of accounts, the settlement thereof, and other matters relating to the listing and trading of Marginable Futures Contracts on SGX-ST. Except as otherwise specified in this Chapter, the Rules, Directives and Practice Notes shall, where applicable, apply to the trading of Marginable Futures Contracts on SGX-ST.
19.2 Listing of Marginable Futures Contracts
19.3 Contract Specifications
19.4 Adjustments Due to Corporate Actions
19.5.1 Nomination of securities
SGX-ST may, from time to time, nominate an underlying for Marginable Futures Contracts. If SGX-ST decides, for any reason, that an underlying is no longer suitable for Marginable Futures Contracts, SGX-ST shall:—
19.5.2 Removal from Quotation and Restriction of Trading before Last Trading Day
Subject to giving prior notification, SGX-ST may remove any Marginable Futures Contract from quotation before the Last Trading Day if all positions in such Marginable Futures Contract have been offset. If there are positions in such Marginable Futures Contract that are not offset, SGX-ST may require that such positions be cash settled immediately according to the terms as determined by SGX-ST, or restrict trading only to enable those positions to be offset or to the extent that SGX-ST deems such trading to be necessary or desirable for the maintenance of a fair, orderly and transparent market.
19.6.1 Trading Halt or Suspension of Trading
19.6.2 Resumption of Trading
The trading of Marginable Futures Contracts which have been halted or suspended under Rule 19.6.1 may be resumed if SGX-ST determines that:
19.8.1
A Trading Member must immediately notify SGX-ST of the details of any account carried on its books that exceeds the monitoring thresholds on positions that have not been offset, as prescribed by SGX-ST from time to time. Such monitoring thresholds may be imposed on any account or any single customer, and may include any one or a combination of the following:—
"single customer" in this Rule 19.8 shall have the meaning ascribed to it in Rule 11.7.5.
19.8.2
SGX-ST shall, in the interest of maintaining a fair, orderly and transparent market, monitor the total number of positions that have not been offset, of all accounts opened with all Trading Members in any Marginable Futures Contract on either side (long or short), or both sides of the market, and where appropriate, take action under Rule 19.8.3.
19.8.3
To reduce a Trading Member's risk exposure in trading and dealing in any Marginable Futures Contracts, or for the purpose of maintaining a fair, orderly and transparent market, SGX-ST shall have the right to impose on the Trading Member such measures as it deems necessary or desirable. The Trading Member must comply with all measures which are imposed by SGX-ST. These may include:—
19.8.4
In determining the monitoring thresholds prescribed under Rules 19.8.1 and 19.8.2, and the risk management measures prescribed under Rule 19.8.3, SGX-ST may consider the following factors:—
19.8.5
In computing positions that have not been offset for the purpose of Rule 19.8, the positions of all accounts directly or indirectly owned or controlled by a person or persons, and the positions of all accounts of any person or persons acting in concert and the positions of all accounts in which a person or persons have a proprietary or beneficial interest, shall be accumulated and deemed to be the positions of each of such persons as if each owned or controlled all the aggregate positions individually.
19.9.1
A Trading Member must establish and maintain adequate internal control systems to:—
19.10.1
For the purpose of this Rule 19.10:—
Term | Meaning |
"Customer Asset Value" | refers to moneys and the market value of assets in a customer's account subject to such hair-cut as specified by SGX-ST. |
"Initial Margins" | refers to the minimum amount required to be deposited by customers, as prescribed by CDP, with a Trading Member for positions in Marginable Futures Contracts. This minimum amount is distinct from and in addition to Variation Margins. |
"Maintenance Margins" | refers to that component of Required Margins, as determined by CDP, which must be maintained in a customer's account subsequent to the deposit of Initial Margins for that customer's positions in Marginable Futures Contracts. |
"Required Margins" | refers to the sum of Maintenance Margins and Variation Margins. |
"Valuation Price" | means the official price of Marginable Futures Contracts prescribed by SGX-ST for the purpose of determining Variation Margins. |
"Variation Margins" | refers to that component of Required Margins comprising the mark-to-market gains and losses, in relation to the price at which the Marginable Futures Contract was bought or sold, arising from the daily valuation of positions, except that Variation Margins are not required if the Trading Member permits a customer to realise a gain or loss pursuant to executing a trade to offset an existing position. |
A net loss increases the Variation Margins and Required Margins amount, and a net profit decreases the Variation Margins and Required Margins amount.
In calculating the mark-to-market losses or gains, a Trading Member must use the Valuation Price as determined by SGX-ST.
19.10.2
Amended on 19 May 201419 May 2014.
19.10.3
If the Customer Asset Value falls below the Required Margins, the Trading Member must call for additional margins from the customer to bring the Customer Asset Value balance to no less than the sum of Initial Margins and Variation Margins within two Market Days from the date the Customer Asset Value falls below the Required Margins.
19.10.4
Except for trades which reduce a customer's Required Margins, a Trading Member must not allow a customer to incur any new trade unless:—
19.10.5
Trading Members must not set margin requirements that are less stringent than those prescribed by SGX-ST.
Amended on 21 January 201321 January 2013.
19.10.6
Rules 13.5A.1(2) and 13.5A.1(3) shall apply in respect of margins for Marginable Futures Contracts that the Trading Member may call from the customer.
Amended on 21 January 201321 January 2013.
19.10.7
Mark to market gains of a customer may be utilised by the Trading Member to meet Initial Margins for the same customer.
19.10.8
A Trading Member may allow a customer to withdraw Excess Margins provided such withdrawal will not cause the Customer Asset Value to be less than zero.
"Excess Margins" refers to the amount of Customer Asset Value that is in excess of the sum of the Initial Margins and Variation Margins.
19.10.10
A Trading Member must comply with such requirements on the computation and monitoring of a customer's margins as SGX-ST may prescribe.
19.10.11 Under-Margined Accounts
Amended on 19 May 201419 May 2014.
19.10.12 Customer to Comply with Margin Requirements
For the avoidance of doubt, a Trading Member must require a customer to comply with the margin requirements prescribed under Rule 19.10, even if the customer has entered into an arrangement to meet his delivery obligations in connection with Marginable Futures Contracts.
19.10.13 Prohibition on Margin Financing
For the avoidance of doubt, a Trading Member must not under any circumstances enter into a financing arrangement with a customer in respect of that customer's margins requirements which would allow the customer to trade without meeting the margin requirements prescribed under Rule 19.10.
19.11 Capital Requirement for Marginable Futures Contracts
Amended on 29 December 201429 December 2014.
19.12.1 Overtrading
The following provisions apply in relation to overtrading:—