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Mindmap

Dealing Mechanics and Settlement Procedures

Lim Jia Ying Englisch

Inhalt der Mindmap

Dealing Mechanics and Settlement Procedures

  1. Contracts

    • Ready
      • By 5pm on due date T+3
      • Sellers paid on due date
      • If payment not received on time shares may be sold
    • Contra Trades
      • Effect a corresponding sell contract on or before due date
      • Investors pay the difference of all expenses
      • Ready Basis only
    • Immediate/Cash Trades
      • Settlement on trade date by 5pm
    • Cancelling Contracts
      • Reasions
        • Errror trade
        • Material mistakes
        • Evidence of fraud/wilful misrepresentation
        • Protect finacial integrity/reputation/interests
      • Reprimand/ imposed a fine not exceeding $2000
  2. Trade Settlement Changes

    • Buy-In
      • When selling customer fails to deliver
        • buy-in will be instituted against the Clearing Member's customer (customer needs to cover position by 12pm on settlement date)
      • CDP will conduct buy-in without prior notice
        • 2 min-bids above yesterday's closing price
        • 2 min-bids above any transacted/bid prices in an hour before the buy-in
      • Costs of buy-in paid by the clearing member
        • Selling customer will then face whatever differences there are, including expenses
    • Forced Sales
      • Timetable inapplicable when:
        • Expectation of full payment from customer and reasonably defer forced-sale for up to 2-4 days
        • Trading member allowed the customer a sale position after purchase, but not later than the due date of the purchase contract.
      • Rules
        • 1. Trading member can adjust the price and volume for sale
        • 2. Need not give notice of the forced-sale to customer
        • 3. Trading member not liable for any losses to customer
        • 4. Trading member can recover losses and expenses of the Forced-Sale from the customer
      • When buyers fail to pay
        • Trading member can sell off the shares that it has bought on behalf of its customers
  3. Dealing Mechanics

    • Opening Routine
      • 30 mins pre-session
        • Normal Trading starts at 9AM
        • Pre-Open: 8:30 to 8:59 AM
        • Non-Cancel: 8:59/8:59 - 9 AM
      • Pre-Open
        • Orders can be entered , modified or withdrawn
        • No matching of orders
        • End randomly at any time from 0858 to 0859
      • Non-Cancel
        • NO input, amendment and withdrawals
        • Orders that can be matched are at a single price computed by the SGX-ST
          • The computed price will be the opening price for the day
        • Unmatched orders will be carrid forward into the morning session.
    • Trading Phase
      • Morning Trading Phase: 0900 to 1200 Afternoon Trading Phase: 1300 to 1700 Half Day Trading Phase: 0900 to 1200
      • Allows order entry, modification and withdrawal
      • Orders are matched by price priority before time priority
      • Unmatched Orders
        • During morning: carried forward to Mid-Day Break
        • During afternoon or half-day: carried forward to Closing routine
    • Closing Routine
      • 6 minute session
        • Pre-closing: 1700 to 1704-1705 / 1200 to 1204-1205
        • Non-cancel: 1704 -1705 to 1706
      • Trading stops at 12pm/5pm
    • Mid-Day Break
      • 1 hr session that begins after morning phase and ends before afternoon phase (Both Pre-Open and Non-Cancel Phase)
      • Non-Cancel
        • No input, amendment or withdrawal of orders
        • Orders that can be matched are at a single price computed by the SGX-ST
          • The computed price will be the opening price for the day
        • Unmatched orders will be carried forward to the afternoon trading session
      • Pre-Open
        • Orders can be entered, modified or withdrawn in ready and Unit Share Market
        • No matching of orders
        • Ends randomly from 1258 to 1259
  4. Securities

    • Securities Account
      • Maintained with CDP or depository agent
      • Settled in currency of quotation at FOREX rate set by TM
    • Designated Securities
      • Requirements
        • Manipulation
        • Excessive speculation
        • SGX discretion
      • Restrictions
        • Prohibit short selling
        • Designated securities exceed 5% of paid up margins are restricted by TM
        • TM obtain margins from customers
      • Compliance
        • TM must give all particulars to SGX
        • TM must inform SGX the next business day when asked
    • Cornered Securities
      • Requirements
        • Single interest has enough control of supply and price
        • SGX-ST declares to protect markets
      • Restrictions
        • Extend due date for delivery
        • Cash settled
    • Eligible Securities
      • Securites that are eligible for clearance or settlement on a book-entry basis by CDP
    • Trading Basis
      • Cum
        • Quoted with entitlements
      • Ex
        • Quoted without entitlements
  5. Trading Safeguards

    • Publication of real-time Indicative Equilibrium Prices (IEP) during opening and closing routines
      • Provide more market transparency
      • Facilitate Price Discovery
    • Safeguard against manipulation of the equilibrium price
    • Random ending to the Pre-Open and Pre-Close phase
  6. Direct Business

    • Order is "married" with corresponding order from another client
    • Conditions
      • 50000 units of securities or $150000 in value
      • Book out trade to remedy an error
      • Complete order partially filled in market
    • Parties
      • 2 Trading Members
      • 2 customers of a Trading Member
      • Trading member and its customer
    • Reporting
      • Married trade reporting system
        • Price/Quantity/Counterparty
      • During trading hours
        • within 10 mins of execution
      • After trading hours
        • first 20 mins of opening routine the next market day
  7. Trading halt and suspension

    • Halt
      • may be imposed /lifted/changed to suspension anytime by SGX-ST
      • allows issuer to disclose material information during the pause
      • up to 3 market days or as agreed
      • Minimum duration of 30 mins or as prescribed
      • cease to be traded on SGX reach
      • existing orders remain valid/new orders can be entered but unmatched
      • can be requested by issuer
    • Suspension
      • all unmatched orders lapse
      • reasons
        • less than 10% in public hands
        • assets substantially cash/short dated securities
        • ability to continue is in doubt
        • unwilling to comply to rules
        • judical management
        • application filed to court for liquidation & debt is alleged is significant
        • necessary for fair/transparent/orderly market
        • market sensitive announcement released
      • imposed by SGT-ST
      • Prolonged period
  8. Dealing with Errors

    • Error Trades
      • Wrong entry of volume of the order
      • Wrong pricing entered during transaction
      • Whatever SGX-ST deems to be an error
    • Actions to take
      • Contact other party to seek agreement to cancel trade
      • trading members must inform SGX-ST through phone call within 30 mins and in writing (in detail)
      • Trading member at fault must provide reasoning behind the action
    • Disputes arising from errors
      • Refer to SGX-ST quickly
      • SGX-ST will decide whether or not to cancel the error trade, on the same day, considering:
        • Price difference
        • Securities market liquidity
        • Time
        • Force Key
        • Monetary Loss
        • Number of Counter Parties
        • Reasons given for error
        • Any other factor deemed relevant by SGX-ST

Informationen

Beschreibung
Mindmap am Dealing Mechanics and Settlement Procedures, erstellt von Lim Jia Ying am 13/11/2018.
Erstellt von
Lim Jia Ying
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