Trading Practices And Conduct of Trading Representatives

ACTING AS AGENT

When acting as agent, a Trading Member and its Trading Representative must:-

A Trading Member must ensure that a person to whom it discloses a customer’s order under Rules (9)(b) and (c) maintains confidentiality of such information

1Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008).

SEPARATION OF CUSTOMER AND PROPRIETARY TRADING ACTIVITIES

A Trading Member must have procedures to prevent any conflict of interest between its customer trading activities and proprietary trading activities

CUSTOMER ORDERS – PRECEDENCE2

2Revised, effective 1 July 2005. Circular No. GM/133/2005 (13 June 2005)

ARRANGEMENT WITH CUSTOMERS

A Trading Member or its Trading Representative must not:-

UNAUTHORISED TRADING

A Trading Representative must not:-

EXCESSIVE TRADING

A Trading Member or a Trading Representative, when acting as agent, must not encourage transactions if the sole object is generating commission

MARKET MANIPULATION AND FALSE MARKET

A Trading Member or a Trading Representative must not engage in, or knowingly act with any other person in, any act or practice that will or is likely to

3Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008)

4Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008)

A Trading Member or a Trading Representative must not enter a buy order or a sell order on the Trading System if there is an existing opposite order from that same Trading Member or Trading Representative in the same security or Futures Contract for the same price. This Rule does not apply if:5

A Trading Member or a Trading Representative must not directly or indirectly deal in securities which involve no change of beneficial ownership as defined in Section 197(5) of the Securities and Futures Act, or knowingly execute, or hold himself out as having executed, an order for the bona fide purchase or sale of Futures Contracts without having effected a bona fide purchase or sale of Futures Contracts as defined in Section 207(1) of the Securities and Futures Act. It is a defence if the Trading Member or Trading Representative can show that it, or he or she had no reason to suspect, or no reasonable Trading Member or Trading Representative ought to have suspected or known, that the transaction was a wash sale6

A Trading Member or a Trading Representative must not deal in securities or trade in Futures Contracts in a manner that will or may affect or maintain the price of the securities, Futures Contract or their underlying, with intent to induce other persons to subscribe for, buy or sell the securities or Futures Contracts. This Rule does not apply to stabilising action carried out in accordance with Regulation 3 of the Securities and Futures (Market Conduct) (Exemptions) Regulations7

A Trading Member or a Trading Representative must not disseminate information that is false or misleading if the Trading Member or Trading Representative

A Trading Member or a Trading Representative must not participate in any prohibited market conduct in securities or Futures Contracts or in any insider trading, or knowingly assist a person in such conduct8

5Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008)

6Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008).

7Revised, effective 23 January 2009. Circular No. GM/362/2008 (23 December 2008).

8Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008)

A Trading Member or a Trading Representative must immediately inform SGX-ST if it or he or she reasonably suspects, or knows of, any attempted market manipulation, creation of a false market or insider trading

RECORD OF ORDERS

A Trading Member or a Trading Representative must ensure that a daily record of orders received from customers is maintained. The record must show the identity of the Trading Representative, account identification of each customer, the specific order, date and the time the order was received, transmitted, amended, and executed or cancelled. For avoidance of doubt, the record may be kept in the order management system

A Trading Member must have a robust system to prevent tampering of the audit trail of orders entered into the trading system

ORDER ENTRY PERSON

A Trading Member may appoint a person to enter orders on the Trading System on instructions given by a Trading Representative or team of Trading Representatives. A Trading Member must ensure that a Trading Representative is supported by no more than 1 order entry person. For avoidance of doubt, an order entry person who supports a Remisier must be appointed by a Trading Member9

9Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008)

RESPONSIBILITY FOR ORDERS

A Trading Member is responsible for the accuracy of all orders entered into the Trading System by its Trading Representatives and any order entry person10

10Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008)

A Trading Representative is responsible for the accuracy of orders entered into the Trading System by or on behalf of the Trading Representative11

Orders must be entered in accordance with any procedures SGX-ST prescribes

OFF PREMISES BROKING

Before allowing its Trading Representatives to carry out dealing activities outside its office premises, a Trading Member must inform SGX-ST

A Trading Member must inform all customers that Trading Representatives are operating away from its office premises and of any resulting limitations that might affect customer service and get written acknowledgement

A Trading Member must ensure its Trading Representatives do not misuse customers’ accounts for third party trading. In this regard, contract notes and statements must besent to the customer’s residential address, and not to “care-of” address, “PO Box” address or the Trading Representative’s address. However, if the customer chooses otherwise, the Trading Member must explain the risk of unauthorised trading to the customer, get written acknowledgement, and monitor the trading activities for any unauthorised trading in customers’ accounts.

MISCELLANEOUS

A Trading Member and a Trading Representative must not knowingly take advantage of a situation arising from : -

11Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008)

12Revised, effective 3 April 2008. Circular No. GM/74/2008 (20 March 2008)

 
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