Practice Note 8.6 — Application of the Forced Order Range
|Issue Date||Cross Reference||Enquiries|
|Added on 4 July 20114 July 2011, amended on 25 October 201225 October 2012 and 26 August 201326 August 2013.||Rule 8.6||
Please contact Enforcement:
Mr David Quinn 6236 8552 or email@example.com
1.1 This Practice Note explains the application of the Forced Order Range as an error trade prevention measure.
1.2 Unless otherwise determined by SGX-ST, the Forced Order Range of the following products shall be as follows:
|S/N||Product||Price Range (S$)||Minimum Bid Size (S$)||Forced Order Range|
|1||Stocks (including preference shares), Real Estate Investment Trusts (REITS), business trusts, warrants and any other class of securities or Futures Contracts not specified in this Rule 8.3.3||Below 0.20||0.001||+/- 20 bids|
|0.20 – 1.995||0.005|
|2.00 and above||0.01|
|2||Exchange traded funds and debentures||All||0.01 or 0.001 as determined by SGX-ST||+/- 30 bids|
|3||Bonds and loan stocks||All||0.001|
1.3 Subject to paragraph 1.4 of this Practice Note 8.6, SGX-ST provides a pre-execution mechanism, known as the Forced Key function, to mitigate the occurrence of error trades resulting from errors in the entry of order prices. Orders entered at prices outside the Forced Order Range must be confirmed by using the Forced Key function, before the orders may be submitted.
1.3A The Forced Key function will not be applicable prior to the first trade on the first day of trading of the following:
(a) any newly-listed instrument; and
(b) shares of a company immediately following a consolidation or subdivision of the shares.
1.4 The Forced Key function is intended to complement, and not replace, Members' responsibility to adopt adequate and appropriate measures and practices to safeguard against the execution of error trades.
2. Risk Management Controls
2.1 In order to mitigate the occurrence of error trades resulting from errors in the entry of order prices, Members should:
(a) ensure that the Forced Key alert is available;
(b) encourage Trading Representatives to exercise judgment when accepting an instruction from a customer to execute an order priced outside the Forced Order Range; and
(c) ensure that procedures are in place to determine if there are legitimate commercial reasons for orders priced outside the Forced Order Range.