SGX Issues Consultation Paper For Phase Two Of Proposed Changes To Derivatives Trading Rulebook

Singapore Exchange (SGX) is inviting public comments on Phase Two of the proposed changes to the SGX Derivatives Trading Rulebook. This is part of a wider review of the entire rulebook that SGX is currently undertaking.

Phase One of this consult relating to access and membership recently closed with some excellent industry feedback which the Exchange is now reviewing. Phase Two of this consult will cover the remaining chapters of the new Rulebook. These chapters govern two distinct markets – the financial futures market (“SGX-DT”) and the deliverable futures commodity market (“JADE”). Many of the old rules have been retained but streamlined and reorganized for user convenience and added clarity. In particular, the following changes are being proposed:

1. SGX-DT and JADE are operated on different platforms. Hence, trade matching algorithms are market specific depending on whether the contract is traded on SGXDT or JADE. Similarly, a separate policy is also proposed for error trades in the individual markets and products.
2. For JADE, provisions are made for physical delivery of the underlying commodities. A physical delivery and warehouse framework has been proposed to govern the delivery process with respect to deliverable futures contracts traded on JADE. This framework should be read in conjunction with the delivery rules set out in the DC Clearing rules as well as the delivery obligations set out in the applicable contract specifications.
3. A detailed Contract Specification has been included in this consult for the first product that JADE proposes to launch – ie Technically Specified Rubber 20 futures contract or “TSR20 Rubber”. TSR20 Rubber contract is currently pending product approval by MAS.
4. All floor centric committees have been abolished. They have been replaced by two non-disciplinary market advisory committees as well as two dedicated committees to deal with disciplinary matters.
5. For disputes arising from contracts traded on JADE, at the request of any disputing SGX member, the other member has to submit to SIAC for arbitration.
6. In connection with disciplinary matters, the rules propose to adopt a civil standard of proof in connection with hearings before the disciplinary committees. Previous rules were silent on the standard of proof to be adopted in disciplinary hearings.

The consultation papers which set out the proposed amendments to the derivatives trading Rulebook will be available on the Exchange’s website at www.sgx.com from today. Market participants and members of the public are encouraged to take part in this consultation exercise and forward their feedback and suggestions between now and 30 June 2006 via:

Email:
rules@sgx.com

Post/Courier:
Singapore Exchange Limited
2 Shenton Way, SGX Centre 1, #19-00
Singapore 068804

Attn: Arul Ramiah / Glenn Seah
Regulatory Policy
Risk Management and Regulation

Fax: 6535 5573