Whole Section

  • 3. Conditions that may be imposed on a Designated Instrument

    • 3.1

      The conditions imposed on a Designated Instrument would depend on the circumstances leading to the designation of the security or futures contract. Examples of such conditions are listed below. One or more of these conditions may be imposed in a particular designation situation, and this list is not exhaustive.

      (a) Requirement for collateral to be furnished. Trading Members may be required to obtain margins from each customer in respect of the customer's dealing in the Designated Instrument. This may also be imposed as a requirement for the Trading Member to obtain partial or full payment for any buy order from a customer, prior to executing the order. Such requirements would be specified in the conditions for the designation;
      (b) Trading restrictions on specific Trading Members. Trading restrictions may also be imposed on specific Trading Members in relation to a Designated Instrument if the Trading Member has outstanding unsettled positions in the security (or the underlying security of the futures contract) that is more than 5% (or any percentage that SGX-ST may prescribe) of the paid-up capital of the company whose securities are designated;
      (c) Restrictions on sale. A prospective seller of a Designated Instrument may be prohibited from placing a sell order unless he is already holding the security (or underlying security of the futures contract) at the time of sale. The seller may be required to provide evidence that he/she holds the security (or the underlying security of the futures contract). This evidence could be in the form of statements by CDP or a custodian showing that the seller is holding a sufficient quantity of the security. Furthermore, the Trading Member may be required to cite such evidence prior to the execution of the sale order; and
      (d) Other conditions such as prohibitions on short-selling, contra trading or Internet Trading.

      Added on 3 June 20193 June 2019.