Rules & Forms

Rules & Forms 2018-04-20T03:24:38+00:00

Rules & Forms

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SDiX as a Self-Regulating Market

i. Exchange Rules – adopt similar principle as the Securities Futures Act and Commodity Trading Act

ii. Regulatory Focus

Capital and Financial Requirements

  • Members must comply with the minimum Capital and Financial Requirements listed in the table above at all times
  • Minimum Security Deposit of US$250,000
  • Members are required to submit quarterly returns on the computation of its capital and financial requirements
  • Members are required to submit annual audited profit and loss account and balance sheet

Trading Practices

  • Fair, orderly and transparent market
  • No short selling allowed
  • Rules on prohibited trading practices covers market manipulation, cornering, false trading etc
  • Market surveillance unit that monitors the market to detect unusual trading activities and prohibited trading practices or conduct, including market manipulation

Dealing with Customers

  • Broker Members can only deal with Accredited Investors** or such other class of investors as the Exchange may prescribe
  • Only a Registered Representative of the Broker Member may solicit for Customers for the Broker Member
  • Broker Member must identify and verify each customer before the account is opened
  • Measures to identify and verify each customer shall be in line with and shall be at least of the standards set by the Monetary Authority of Singapore for capital markets services licence holders in relation to the prevention of money-laundering and terrorism financing
  • Contract Notes and Monthly Statements must be sent to customer
  • All moneys and assets received from a customer must be treated as belonging to the customer. Such moneys and assets must be segregated from the Broker Member’s own moneys and assets in accordance with the Rules
  • Broker Member must have proper controls and segregation of duties to mitigate potential conflict of interest
  • Rules on advertisement and sales practices such as misrepresentation or provision of misleading information
  • Broker Members must set trading limits for each of its customer

iii. Enforcement and Supervision

Detecting Possible Violation of Exchange Rules

  • Surveillance of trading activities
  • Inspect or conduct audit of Member’s books and records
  • Investigate any complaints

Violation of Exchange Rules

  • Charge the Member or the Registered Person before the Disciplinary Committee
  • Make an offer of composition to the Member or the Registered Person; or
  • Issue a letter of warning to the Member or Registered Person

*“Net Capital” means the amount by which current assets exceed liabilities, less such other items as may be specified in any Guidance Note issued by the Exchange, and in determining Net Capital:

(a) unrealised profits shall be added and unrealised losses shall be deducted in the accounts of the Member; and

(b) “current assets” and “liabilities” shall be computed in accordance with any Guidance Note issued by the Exchange.

** Accredited Investor means

(a) an individual:

(i). whose net personal assets exceed in value the minimum amount of S$2 million (or its equivalent in a foreign currency) or such other amount as the Exchange and the Book Depository may prescribe in place of the first amount; or

(ii) whose income in the preceding 12 months is not less than S$300,000 (or its equivalent in a foreign currency) or such other amount as the Exchange and the Book Depository may prescribe in place of the first amount;

(b) a corporation with net assets exceeding S$10 million in value (or its equivalent in a foreign currency) or such other amount as the Exchange and the Book Depository may prescribe, in place of the first amount, as determined by —

(A) the most recent audited balance-sheet of the corporation; or

(B) where the corporation is not required to prepare audited accounts regularly, a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months;

(c) the trustee of:

(i) a trust of which all property and rights of any kind whatsoever held on trust for the beneficiaries of the trust exceed S$10 million in value (or its equivalent in a foreign currency); or

(ii) a trust where all beneficiaries of the trust are Accredited Investors;

(d) an entity (other than a corporation) with net assets exceeding S$10 million in value (or its equivalent in a foreign currency);

(e) a partnership (other than a limited liability partnership within the meaning of the Limited Liability Partnerships Act (Chapter 163A of Singapore) in which each partner is an Accredited Investor;

(f) a corporation, the sole business of which is to hold investments and the entire share capital of which is owned by one or more persons, each of whom is an Accredited Investor; or