Singapore Exchange Limited (SGX) today announced that the SGX-Derivatives Trading (SGX-DT) Compensation Fund, which has net assets amounting to approximately S$33 million, will be discontinued when it expires on 24 November 2007. This follows the completion of the public consultation on the proposed amendments to the Futures Trading Rules that was issued in July this year.
Proceeds from the dissolution of the Compensation Fund will be added to the resources of the existing Clearing Fund of SGX Derivatives Clearing Ltd. This will allow SGX to apply the Compensation Fund’s assets more effectively and concentrate resources in the clearing house to maintain the integrity of the clearing system and manage systemic risk in the derivatives market.
The Compensation Fund was originally set up on 25 November 1986 by the Singapore International Monetary Exchange (SIMEX), the predecessor of the Singapore Exchange Derivatives Trading Ltd. This was to provide compensation to investors, the exchange or the clearing house in cases where losses were incurred through the default or defalcation of any SIMEX member. The protection of retail investor interests will continue to be covered by the Fidelity Fund under the Securities and Futures Act (SFA).
For more details, please refer to the Dissolution Notice that will be published on 5 October 2007 in The Business Times and The Straits Times.
