2.5.2 Trading Members

Past version: Effective from 01 Apr 2014 to 21 Apr 2019

The following requirements apply in relation to Trading Members:

(a) except for Rule 2.5.4, a Trading Member that engages solely in House Trades and Proprietary Trades of its Related Corporations is not subject to any financial requirements under Rule 2.5. However, in deciding whether to admit such Trading Member, the Exchange shall take into account matters such as the prospective Trading Member's financial standing, pending court proceedings and criminal records;
(b) a General Trading Member that holds a licence to engage in a Regulated Activity, shall at all times:
(i) maintain a Base Capital or Net Head Office Funds, as the case may be, of not less than $1 million;
(ii) not cause or permit its Financial Resources or Adjusted Net Head Office Funds, as the case may be, to fall below its Total Risk Requirement; and
(iii) not cause or permit its Aggregate Indebtedness to exceed 1200% of its Aggregate Resources.
(b1) a General Trading Member that holds a licence specified in Rule 2.4.1(b) shall at all times maintain a Net Liquid Capital of not less than $1 million;
(c) any other Bank Trading Member shall at all times:
(i) maintain a Base Capital or Net Head Office Funds, as the case may be, of not less than $1 million, failing which, the Bank Trading Member must deposit an amount of not less than $1 million in cash and/or Acceptable Government Securities with the Clearing House;
PROVIDED ALWAYS THAT:—
(1) the Exchange shall have the discretion to decide if a Bank Trading Member may rely on its Base Capital or Net Head Office Funds instead of depositing cash and/or Acceptable Government Securities;
(2) if the Bank Trading Member is also a clearing member of the Clearing House and/or CDP, and has a deposit in excess of $1 million with the Clearing House or CDP in accordance with the applicable provisions of the Clearing Rules or CDP Clearing Rules, it need not deposit with the Clearing House a further $1 million or such other amount as may be prescribed by the Exchange; and
(3) the Exchange shall have the discretion to use or apportion in any manner, the abovementioned deposit to satisfy the Bank Trading Member's obligations to the Exchange, Clearing House, and/or CDP under this Rules, the Clearing Rules, and the CDP Clearing Rules respectively. In deciding the apportionment, the Exchange may, in consultation with the Clearing House and/or CDP, take into account factors, including but not limited to, the amount owed by the Bank Trading Member to the Exchange, Clearing House and/or CDP respectively.
(ii) not cause or permit its Financial Resources or Adjusted Net Head Office Funds or cash and/or Acceptable Government Securities deposited with the Clearing House or CDP, as the case may be, to fall below its Total Risk Requirements.

Amended on 25 August 200925 August 2009 and 1 April 20141 April 2014.