7. Part III of the principal Act is repealed and the following Part substituted therefor:“PART III 47. The objectives of this Part are —| (a) | to promote safe and efficient clearing facilities; and | | (b) | to reduce systemic risk. |
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| Interpretation of this Part |
48.—(1) In this Part, unless the context otherwise requires —| “default proceedings” means any proceedings or other action taken by an approved clearing house or a recognised clearing house under its default rules; |
| “default rules”, in relation to an approved clearing house or a recognised clearing house, means the business rules of the approved clearing house or recognised clearing house which provide for the taking of proceedings or other action if a participant has failed, or appears to be unable or to be likely to become unable, to meet his obligations for any unsettled or open market contract to which he is a party; |
| “defaulter” means a participant who is the subject of any default proceedings; |
| “foreign corporation” means a corporation which is incorporated or formed outside Singapore; |
| “market charge” means a security interest, whether fixed or floating, granted in favour of an approved clearing house, or a recognised clearing house, over market collateral; |
| “market collateral” means any property held by or deposited with an approved clearing house or a recognised clearing house, for the purpose of securing any liability arising directly in connection with the ensuring of the performance of market contracts by the approved clearing house or recognised clearing house; |
“market contract” means —| (a) | a contract subject to the business rules of an approved clearing house or a recognised clearing house, that is entered into between the approved clearing house or recognised clearing house and a participant pursuant to a novation (however described), whether before or after default proceedings have commenced, which is in accordance with those business rules and for the purposes of the clearing or settlement of transactions using the clearing facility of the approved clearing house or recognised clearing house; or | | (b) | a transaction which is being cleared or settled using the clearing facility of an approved clearing house or a recognised clearing house, and in accordance with the business rules of the approved clearing house or recognised clearing house, whether or not a novation referred to in paragraph (a) is to take place; |
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“property”, in relation to a market charge or market collateral, means —| (a) | any money, letter of credit, banker’s draft, certified cheque, guarantee or other similar instrument; | | (b) | any securities; | | (c) | any futures contract, derivatives contract or other similar financial contract, arrangement or transaction; or | | (d) | any other asset of value acceptable to an approved clearing house or a recognised clearing house; |
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“relevant office holder” means —| (a) | the Official Assignee exercising his powers under the Bankruptcy Act (Cap. 20); | | (b) | a person acting in relation to a corporation as the liquidator, the provisional liquidator, the receiver, the receiver and manager or the judicial manager of the corporation, or acting in an equivalent capacity in relation to a corporation; or | | (c) | a person acting in relation to an individual as the trustee in bankruptcy, or the interim receiver of the property, of the individual, or acting in an equivalent capacity in relation to an individual; |
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| “settlement”, in relation to a market contract, includes partial settlement; |
| “Singapore corporation” means a corporation which is incorporated in Singapore. |
| (2) Where a charge is granted partly for the purpose specified in the definition of “market charge” in subsection (1) and partly for any other purpose or purposes, the charge shall be treated as a market charge under this Part insofar as it has effect for that specified purpose. |
| (3) Where any collateral is granted partly for the purpose specified in the definition of “market collateral” in subsection (1) and partly for any other purpose or purposes, the collateral shall be treated as market collateral under this Part insofar as it has been provided for that specified purpose. |
(4) Any references in this Part to the law of insolvency is a reference to —| (a) | the Bankruptcy Act; | | (b) | Parts VIIIA, IX and X of the Companies Act (Cap. 50); and | | (c) | any other written law, whether in Singapore or elsewhere, which is concerned with, or in any way related to, the bankruptcy or insolvency of a person, other than the Banking Act (Cap. 19). |
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| (5) Any reference in this Part to a settlement, in relation to a market contract, is a reference to the discharge of the rights and liabilities of the parties to the market contract, whether by performance, compromise or otherwise. |
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| Division 1 — Establishment of Clearing Facilities |
| Requirement for approval or recognition |
49.—(1) No person shall establish or operate a clearing facility, or hold himself out as operating a clearing facility, unless the person is —| (a) | an approved clearing house; or | | (b) | a recognised clearing house. |
(2) No person shall hold himself out —| (a) | as an approved clearing house, unless he is an approved clearing house; or | | (b) | as a recognised clearing house, unless he is a recognised clearing house. |
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(3) Except with the written approval of the Authority, no person, other than an approved clearing house or a recognised clearing house, shall take or use, or have attached to or exhibited at any place —| (a) | the title or description “securities clearing house” or “futures clearing house” in any language; or | | (b) | any title or description which resembles a title or description referred to in paragraph (a). |
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| (4) Any person who contravenes subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction. |
| (5) Any person who contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part thereof during which the offence continues after conviction. |
| (6) Without prejudice to section 337(1), the Authority may, by regulations made under section 81Q, exempt any corporation or class of corporations from subsection (1), subject to such conditions or restrictions as the Authority may prescribe in those regulations. |
| (7) Without prejudice to section 337(3) and (4), the Authority may, by notice in writing, exempt any corporation from subsection (1), subject to such conditions or restrictions as the Authority may specify by notice in writing, if the Authority is satisfied that the exemption will not detract from the objectives specified in section 47. |
| (8) It shall not be necessary to publish any exemption granted under subsection (7) in the Gazette. |
(9) The Authority may, at any time, by notice in writing —| (a) | add to the conditions and restrictions referred to in subsection (7); or | | (b) | vary or revoke any condition or restriction referred to in that subsection. |
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| (10) Every corporation that is granted an exemption under subsection (6) shall satisfy every condition or restriction imposed on it under that subsection. |
| (11) Every corporation that is granted an exemption under subsection (7) shall, for the duration of the exemption, satisfy every condition or restriction imposed on it under that subsection or subsection (9). |
| (12) Any corporation which contravenes subsection (10) or (11) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
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| Application for approval or recognition |
50.—(1) A Singapore corporation may apply to the Authority to be —| (a) | approved as an approved clearing house; or | | (b) | recognised as a recognised clearing house. |
| (2) A foreign corporation may apply to the Authority to be recognised as a recognised clearing house. |
(3) An application under subsection (1) or (2) shall be —| (a) | made in such form and manner as the Authority may prescribe; and | | (b) | accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority. |
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| (4) The Authority may require an applicant to furnish the Authority with such information or documents as the Authority considers necessary in relation to the application. |
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| Power of Authority to approve or recognise clearing house |
51.—(1) Where a Singapore corporation has made an application under section 50(1), the Authority may —| (a) | in the case of an application to be approved as an approved clearing house, approve the Singapore corporation as an approved clearing house; or | | (b) | in the case of an application to be recognised as a recognised clearing house, recognise the Singapore corporation as a recognised clearing house. |
| (2) Where a foreign corporation has made an application under section 50(2), the Authority may recognise the corporation as a recognised clearing house. |
(3) Notwithstanding subsection (1), the Authority may, with the consent of the applicant —| (a) | treat an application under section 50(1)(a) as an application under section 50(1)(b), if the Authority is of the opinion that the applicant would be more appropriately regulated as a recognised clearing house; or | | (b) | treat an application under section 50(1)(b) as an application under section 50(1)(a), if the Authority is of the opinion that the applicant would be more appropriately regulated as an approved clearing house. |
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(4) The Authority may approve a Singapore corporation as an approved clearing house under subsection (1)(a), recognise a Singapore corporation as a recognised clearing house under subsection (1)(b) or recognise a foreign corporation as a recognised clearing house under subsection (2), subject to such conditions or restrictions as the Authority may think fit to impose by notice in writing, including conditions or restrictions, either of a general or specific nature, relating to —| (a) | the activities that the corporation may undertake; | | (b) | the products that may be cleared or settled by any clearing facility established or operated by the corporation; and | | (c) | the nature of the investors or participants who may use or have an interest in any clearing facility established or operated by the corporation. |
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| (5) The Authority may, at any time, by notice in writing to the corporation, vary any condition or restriction or impose such further condition or restriction as the Authority may think fit. |
| (6) An approved clearing house or a recognised clearing house shall, for the duration of the approval or recognition, satisfy every condition or restriction that may be imposed on it under subsection (4) or (5). |
| (7) The Authority shall not approve an applicant as an approved clearing house, or recognise an applicant as a recognised clearing house, unless the applicant meets such requirements, including minimum financial requirements, as the Authority may prescribe, either generally or specifically. |
(8) The Authority may refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, if —| (a) | the corporation has not provided the Authority with such information as the Authority may require, relating to —| (i) | the corporation or any person employed by or associated with the corporation for the purposes of the corporation’s business; or | | (ii) | any circumstances likely to affect the corporation’s manner of conducting business; |
| | (b) | any information or document provided by the corporation to the Authority is false or misleading; | | (c) | the corporation or a substantial shareholder of the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere; | | (d) | execution against the corporation or a substantial shareholder of the corporation in respect of a judgment debt has been returned unsatisfied in whole or in part; | | (e) | a receiver, a receiver and manager, a judicial manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation or a substantial shareholder of the corporation; | | (f) | the corporation or a substantial shareholder of the corporation has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with the creditors of the corporation or shareholder, as the case may be, being a compromise or scheme of arrangement that is still in operation; | | (g) | the corporation, a substantial shareholder of the corporation or any officer of the corporation —| (i) | has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that the corporation, shareholder or officer, as the case may be, had acted fraudulently or dishonestly; or | | (ii) | has been convicted of an offence under this Act committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012; |
| | (h) | the Authority is not satisfied as to the educational or other qualifications or experience of the officers or employees of the corporation, having regard to the nature of the duties they are to perform in connection with the establishment or operation of any clearing facility; | | (i) | the corporation fails to satisfy the Authority that the corporation is a fit and proper person or that all of its officers, employees and substantial shareholders are fit and proper persons; | | (j) | the Authority has reason to believe that the corporation may not be able to act in the best interests of investors or its members, participants or customers, having regard to the reputation, character, financial integrity and reliability of the corporation or its officers, employees or substantial shareholders; | | (k) | the Authority is not satisfied as to —| (i) | the financial standing of the corporation or any of its substantial shareholders; or | | (ii) | the manner in which the business of the corporation is to be conducted; |
| | (l) | the Authority is not satisfied as to the record of past performance or expertise of the corporation, having regard to the nature of the business which the corporation may carry on in connection with the establishment or operation of any clearing facility; | | (m) | there are other circumstances which are likely to —| (i) | lead to the improper conduct of business by the corporation or any of its officers, employees or substantial shareholders; or | | (ii) | reflect discredit on the manner of conducting the business of the corporation or any of its substantial shareholders; |
| | (n) | in the case of any clearing facility that the corporation operates, the Authority has reason to believe that the corporation, or any of its officers or employees, will not operate a safe and efficient clearing facility; | | (o) | the corporation does not satisfy the criteria prescribed under section 52 to be approved as an approved clearing house or recognised as a recognised clearing house, as the case may be; or | | (p) | the Authority is of the opinion that it would be contrary to the interests of the public to approve or recognise the corporation. |
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| (9) Subject to subsection (10), the Authority shall not refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, under subsection (8) without giving the corporation an opportunity to be heard. |
(10) The Authority may refuse to approve a Singapore corporation as an approved clearing house, or recognise a Singapore corporation or foreign corporation as a recognised clearing house, on any of the following grounds without giving the corporation an opportunity to be heard:| (a) | the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere; | | (b) | a receiver, a receiver and manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation; | | (c) | the corporation has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly. |
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| (11) The Authority shall give notice in the Gazette of any corporation approved as an approved clearing house under subsection (1)(a) or recognised as a recognised clearing house under subsection (1)(b) or (2), and such notice may include all or any of the conditions and restrictions imposed by the Authority on the corporation under subsections (4) and (5). |
| (12) Any applicant which is aggrieved by a refusal of the Authority to grant to the applicant an approval under subsection (1)(a) or a refusal of the Authority to recognise the applicant under subsection (1)(b) or (2) may, within 30 days after the applicant is notified of the refusal, appeal to the Minister, whose decision shall be final. |
| (13) Any approved clearing house or recognised clearing house which contravenes subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
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| General criteria to be taken into account by Authority |
52.—(1) The Authority may prescribe the criteria which it may take into account for the purposes of deciding —| (a) | whether a Singapore corporation referred to in section 50(1) or 54(1) should be approved as an approved clearing house or recognised as a recognised clearing house; | | (b) | whether a foreign corporation referred to in section 50(2) should be recognised as a recognised clearing house; and | | (c) | whether an approved clearing house or a recognised clearing house that is subject to a review by the Authority under section 54(4) should be approved as an approved clearing house or recognised as a recognised clearing house. |
(2) Without prejudice to section 51 and subsection (1), the Authority may, for the purposes of deciding whether to recognise a foreign corporation as a recognised clearing house under section 51(2), have regard, in addition to any requirements prescribed under section 51(7) and any criteria prescribed under subsection (1), to —| (a) | whether adequate arrangements exist for co-operation between the Authority and the primary financial services regulatory authority responsible for the supervision of the foreign corporation in the country or territory in which the head office or principal place of business of the foreign corporation is situated; and | | (b) | whether the foreign corporation is, in the country or territory in which the head office or principal place of business of the foreign corporation is situated, subject to requirements and supervision comparable, in the degree to which the objectives specified in section 47 are achieved, to the requirements and supervision to which approved clearing houses and recognised clearing houses are subject under this Act. |
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(3) In considering whether a foreign corporation has met the requirements mentioned in subsection (2)(b), the Authority may have regard to —| (a) | the relevant laws and practices of the country or territory in which the head office or principal place of business of the foreign corporation is situated; and | | (b) | the rules and practices of the foreign corporation. |
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| Annual fees payable by approved clearing house or recognised clearing house |
53.—(1) Every approved clearing house and every recognised clearing house shall pay to the Authority such annual fees as may be prescribed in such manner as may be specified by the Authority.| (2) The Authority may, where it considers appropriate, refund or remit the whole or any part of any annual fee paid or payable to it. |
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54.—(1) A Singapore corporation which is an approved clearing house or a recognised clearing house may apply to the Authority to change its status in the manner referred to in subsection (5).(2) An application under subsection (1) shall be —| (a) | made in such form and manner as the Authority may prescribe; and | | (b) | accompanied by a non-refundable prescribed application fee, which shall be paid in the manner specified by the Authority. |
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| (3) The Authority may require an applicant to furnish the Authority with such information or documents as the Authority considers necessary in relation to the application. |
| (4) The Authority may, from time to time, on its own initiative, review the status of a Singapore corporation that is an approved clearing house or a recognised clearing house in accordance with the requirements prescribed under section 51(7) and the criteria prescribed under section 52(1). |
(5) Where an application is made by a Singapore corporation under subsection (1), or where a review of the status of a Singapore corporation is conducted by the Authority under subsection (4), the Authority may —| (a) | if the corporation is an approved clearing house, withdraw the approval as such and recognise the corporation as a recognised clearing house under section 51(1)(b); | | (b) | if the corporation is a recognised clearing house, withdraw the recognition as such and approve the corporation as an approved clearing house under section 51(1)(a); or | | (c) | make no change to the status of the corporation as an approved clearing house or a recognised clearing house. |
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| (6) Where an application is made under subsection (1), the Authority shall not exercise its power under subsection (5)(c) without giving the Singapore corporation an opportunity to be heard. |
| (7) Where a review of the status of a Singapore corporation is conducted by the Authority on its own initiative under subsection (4), the Authority shall not exercise its powers under subsection (5)(a) or (b) without giving the corporation an opportunity to be heard. |
| (8) Any Singapore corporation which is aggrieved by a decision of the Authority made in relation to the corporation after a review under subsection (4) may, within 30 days after the corporation is notified of the decision, appeal to the Minister, whose decision shall be final. |
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| Cancellation of approval or recognition |
55.—(1) An approved clearing house or a recognised clearing house which intends to cease operating its clearing facility or, where it operates more than one clearing facility, all of its clearing facilities, may apply to the Authority to cancel its approval as an approved clearing house or recognition as a recognised clearing house, as the case may be.| (2) An application under subsection (1) shall be made in such form and manner, and not later than such time, as the Authority may prescribe. |
(3) The Authority may cancel the approval of an approved clearing house, or the recognition of a recognised clearing house, on such application if the Authority is satisfied that —| (a) | the approved clearing house or recognised clearing house has ceased operating its clearing facility or all of its clearing facilities, as the case may be; and | | (b) | the cancellation of the approval or recognition, as the case may be, will not detract from the objectives specified in section 47. |
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| Power of Authority to revoke approval and recognition |
56.—(1) The Authority may revoke any approval of a Singapore corporation as an approved clearing house under section 51(1)(a), any recognition of a Singapore corporation as a recognised clearing house under section 51(1)(b) or any recognition of a foreign corporation as a recognised clearing house under section 51(2), if —| (a) | there exists at any time a ground under section 51(7) or (8) on which the Authority may refuse an application; | | (b) | the corporation does not commence operating its clearing facility, or, where it operates more than one clearing facility, all of its clearing facilities, within 12 months after the date on which it was granted the approval under section 51(1)(a) or was recognised under section 51(1)(b) or (2), as the case may be; | | (c) | the corporation ceases to operate its clearing facility or, where it operates more than one clearing facility, all of its clearing facilities; | | (d) | the corporation contravenes —| (i) | any condition or restriction applicable in respect of its approval or recognition, as the case may be; | | (ii) | any direction issued to it by the Authority under this Act; or | | (iii) | any provision in this Act; |
| | (e) | the corporation operates in a manner that is, in the opinion of the Authority, contrary to the interests of the public; or | | (f) | any information or document provided by the corporation to the Authority is false or misleading. |
| (2) Subject to subsection (3), the Authority shall not revoke under subsection (1) any approval under section 51(1)(a) or recognition under section 51(1)(b) or (2) that was granted to a corporation without giving the corporation an opportunity to be heard. |
(3) The Authority may revoke an approval under section 51(1)(a), or a recognition under section 51(1)(b) or (2), that was granted to a corporation on any of the following grounds without giving the corporation an opportunity to be heard:| (a) | the corporation is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere; | | (b) | a receiver, a receiver and manager or a person in an equivalent capacity has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of, any property of the corporation; | | (c) | the corporation has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that it had acted fraudulently or dishonestly. |
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(4) For the purposes of subsection (1)(c), a corporation shall be deemed to have ceased to operate its clearing facility if —| (a) | it has ceased to operate the clearing facility for more than 30 days, unless it has obtained the prior approval of the Authority to do so; or | | (b) | it has ceased to operate the clearing facility under a direction issued by the Authority under section 81R. |
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| (5) Any corporation which is aggrieved by a decision of the Authority made in relation to the corporation under subsection (1) may, within 30 days after the corporation is notified of the decision, appeal to the Minister, whose decision shall be final. |
| (6) Notwithstanding the lodging of an appeal under subsection (5), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister. |
| (7) The Minister may, when deciding an appeal under subsection (5), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister. |
(8) Any revocation under subsection (1) or (3) of the approval or recognition of a corporation under section 51(1) or (2) shall not operate so as to —| (a) | avoid or affect any agreement, transaction or arrangement entered into in connection with the use of a clearing facility operated by the corporation, whether the agreement, transaction or arrangement was entered into before, on or after the revocation of the approval or recognition; or | | (b) | affect any right, obligation or liability arising under any such agreement, transaction or arrangement. |
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| (9) The Authority shall give notice in the Gazette of any revocation under subsection (1) or (3) of any approval or recognition of a corporation under section 51(1) or (2). |
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| Division 2 — Regulation of Approved Clearing Houses |
| Subdivision (1) — Obligations of approved clearing houses |
57.—(1) An approved clearing house —| (a) | shall operate a safe and efficient clearing facility; | | (b) | shall manage any risks associated with its business and operations prudently; | | (c) | in discharging its obligations under this Act, shall not act contrary to the interests of the public, having particular regard to the interests of the investing public; | | (d) | shall ensure that access for participation in its clearing facility is subject to criteria that are fair and objective, and that are designed to ensure the safe and efficient functioning of its facility and to protect the interests of the investing public; | | (e) | shall maintain business rules that make satisfactory provision for —| (i) | the clearing facility to be operated in a safe and efficient manner; and | | (ii) | the proper regulation and supervision of its members; |
| | (f) | shall enforce compliance by its members with its business rules; | | (g) | shall have sufficient financial, human and system resources —| (i) | to operate a safe and efficient clearing facility; | | (ii) | to meet contingencies or disasters; and | | (iii) | to provide adequate security arrangements; |
| | (h) | shall maintain governance arrangements that are adequate for the clearing facility to be operated in a safe and efficient manner; and | | (i) | shall ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers. |
| (2) The obligations imposed on an approved clearing house under this Act shall apply to all facilities for clearing or settlement operated by the approved clearing house. |
| (3) Notwithstanding subsection (2), the Authority may by notice in writing exempt any clearing facility operated by an approved clearing house from all or any of the provisions of this Act, if the Authority is satisfied that such exemption would not detract from the objectives specified in section 47. |
| (4) It shall not be necessary to publish any exemption granted under subsection (3) in the Gazette. |
| (5) In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems. |
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| Obligation to notify Authority of certain matters |
58.—(1) An approved clearing house shall, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:| (a) | any material change to the information provided by the approved clearing house in its application under section 50(1) or 54(1); | | (b) | the carrying on of any business (referred to in this section as a proscribed business) by the approved clearing house that is —| (i) | not the business of operating a clearing facility; | | (ii) | not incidental to operating a clearing facility; or | | (iii) | not such business, or within such class of businesses, as the Authority may prescribe; |
| | (c) | the acquisition by the approved clearing house of a substantial shareholding in a corporation (referred to in this section as a proscribed corporation) which carries on any business that is —| (i) | not the business of operating a clearing facility; | | (ii) | not incidental to operating a clearing facility; or | | (iii) | not such business, or within such class of businesses, as the Authority may prescribe; |
| | (d) | the approved clearing house becoming aware of any financial irregularity or other matter which in its opinion —| (i) | may affect its ability to discharge its financial obligations; or | | (ii) | may affect the ability of a member of the approved clearing house to meet its financial obligations to the approved clearing house; |
| | (e) | the approved clearing house reprimanding, fining, suspending, expelling or otherwise taking disciplinary action against a member of the approved clearing house; | | (f) | any other matter that the Authority may —| (i) | prescribe by regulations made under section 81Q for the purposes of this paragraph; or | | (ii) | specify by notice in writing to the approved clearing house in any particular case. |
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(2) Without prejudice to the generality of section 81R(1), the Authority may, at any time after receiving a notice referred to in subsection (1), issue directions to the approved clearing house —| (a) | where the notice relates to a matter referred to in subsection (1)(b) —| (i) | to cease carrying on the proscribed business; or | | (ii) | to carry on the proscribed business subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 81R(1); or |
| | (b) | where the notice relates to a matter referred to in subsection (1)(c) —| (i) | to dispose of all or any part of its shareholding in the proscribed corporation within such time and subject to such conditions as the Authority considers appropriate; or | | (ii) | to exercise its rights relating to such shareholding, or to not exercise such rights, subject to such conditions or restrictions as the Authority may impose, if the Authority is of the opinion that this is necessary for any purpose referred to in section 81R(1). |
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| (3) An approved clearing house shall comply with every direction issued to it under subsection (2) notwithstanding anything to the contrary in the Companies Act (Cap. 50) or any other law. |
| (4) An approved clearing house shall notify the Authority of any matter that the Authority may prescribe by regulations made under section 81Q for the purposes of this subsection, no later than such time as the Authority may prescribe by those regulations. |
| (5) An approved clearing house shall notify the Authority of any matter that the Authority may specify by notice in writing to the recognised clearing house, no later than such time as the Authority may specify in that notice. |
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| Obligation to manage risks prudently, etc. |
59.—(1) Without prejudice to the generality of section 57(1)(b), an approved clearing house shall —| (a) | ensure that the systems and controls concerning the assessment and management of risks to its clearing facility are adequate and appropriate for the scale and nature of its operations; | | (b) | obtain the Authority’s approval to the limits which the approved clearing house intends to establish on the number of open positions which may be held by any person under any futures contract cleared or settled with the approved clearing house, and vary those limits only in a manner approved by the Authority; and | | (c) | obtain the Authority’s approval if the approved clearing house does not intend to establish limits on the number of open positions which may be held by any person under any futures contract cleared or settled with the approved clearing house. |
(2) Nothing in subsection (1) shall preclude an approved clearing house from —| (a) | establishing, in respect of open positions which may be held by any person under any futures contract cleared or settled with the approved clearing house, different position limits for different futures contracts, or for different months or days in the period the positions may be held; or | | (b) | establishing limits whether on long or short positions, and whether on a net or gross basis. |
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| (3) Any person who wilfully exceeds any position limit established or varied by an approved clearing house shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000. |
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| Obligation in relation to customers’ money and assets held by approved clearing house |
60.—(1) Without prejudice to sections 81Q and 341, the Authority may make regulations —| (a) | relating to how any money or assets deposited with or paid to an approved clearing house by its members, for or in relation to any contracts of the customers of those members, are to be held by the approved clearing house and, in particular, requiring any such money or assets to be deposited in trust accounts or custody accounts; | | (b) | relating to the circumstances under which, and the purposes for which, the money or assets referred to in paragraph (a) may be used by the approved clearing house; | | (c) | relating to how the approved clearing house may invest the money or assets referred to in paragraph (a); and | | (d) | for any other purpose relating to the handling of the money and assets referred to in paragraph (a). |
(2) Regulations made under this section may provide —| (a) | that a contravention of any specified provision thereof shall be an offence; and | | (b) | for a penalty not exceeding a fine of $200,000 and, in the case of a continuing offence, for a further penalty not exceeding $20,000 for every day or part thereof during which the offence continues after conviction. |
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| Obligation to maintain proper records |
61.—(1) An approved clearing house shall maintain a record of all transactions effected through its clearing facility.(2) The Authority may prescribe by regulations made under section 81Q —| (a) | the form and manner in which the record referred to in subsection (1) shall be maintained; | | (b) | the extent to which the record includes details of each transaction; and | | (c) | the period of time that the record is to be maintained. |
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| Obligation to submit periodic reports |
| 62. An approved clearing house shall submit to the Authority such reports in such form and manner, and at such frequency, as the Authority may prescribe. |
| Obligation to assist Authority |
63. An approved clearing house shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including —| (a) | the furnishing of such returns as the Authority may require for the proper administration of this Act; and | | (b) | the provision of —| (i) | such books and information as the Authority may require for the proper administration of this Act, being books and information —| (A) | relating to the business of the approved clearing house; or | | (B) | in respect of any transaction or class of transactions cleared or settled by the approved clearing house; and |
| | (ii) | such other information as the Authority may require for the proper administration of this Act. |
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| Obligation to maintain confidentiality |
64.—(1) Subject to subsection (2), an approved clearing house and its officers and employees shall maintain, and aid in maintaining, confidentiality of all user information that —| (a) | comes to the knowledge of the approved clearing house or any of its officers or employees; or | | (b) | is in the possession of the approved clearing house or any of its officers or employees. |
(2) Subsection (1) shall not apply to —| (a) | the disclosure of user information for such purposes, or in such circumstances, as the Authority may prescribe; | | (b) | any disclosure of user information which is authorised by the Authority to be disclosed or furnished; or | | (c) | the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore. |
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| (3) For the avoidance of doubt, nothing in this section shall be construed as preventing an approved clearing house from entering into a written agreement with a user which obliges the approved clearing house to maintain a higher degree of confidentiality than that specified in this section. |
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| Penalties under this Subdivision |
| 65. Any approved clearing house which contravenes section 57(1), 58(1) or (3), 59(1), 61(1), 62, 63 or 64(1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction. |
| Subdivision (2) — Rules of approved clearing houses |
| Business rules of approved clearing houses |
66.—(1) Without limiting the generality of sections 57 and 81Q —| (a) | the Authority may prescribe the matters that an approved clearing house shall make provision for in the business rules of the approved clearing house; and | | (b) | the approved clearing house shall make provision for those matters in its business rules. |
| (2) An approved clearing house shall not make any amendment to its business rules unless it complies with such requirements as the Authority may prescribe. |
| (3) In this Subdivision, any reference to an amendment to a business rule shall be construed as a reference to a change to the scope of, or to any requirement, obligation or restriction under, the business rule, whether the change is made by an alteration to the text of the business rule or by any other notice issued by or on behalf of the approved clearing house. |
| (4) Any approved clearing house which contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
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| Business rules of approved clearing houses have effect as contract |
67.—(1) The business rules of an approved clearing house shall be deemed to be, and shall operate as, a binding contract —| (a) | between the approved clearing house and each issuer of securities; | | (b) | between the approved clearing house and each participant; | | (c) | between each issuer of securities and each participant; and | | (d) | between each participant and every other participant. |
| (2) The approved clearing house, each issuer of securities and each participant shall be deemed to have agreed to observe, and perform the obligations under, the provisions of the business rules that are in force for the time being, so far as those provisions are applicable to the approved clearing house, issuer or participant, as the case may be. |
| (3) In this section, “issuer”, in relation to any securities, means a person who issued or made available, or proposes to issue or make available, the securities, being securities that are cleared or settled by the approved clearing house. |
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| Power of court to order observance or enforcement of business rules |
68.—(1) Where any person who is under an obligation to comply with, observe, enforce or give effect to the business rules of an approved clearing house fails to do so, the High Court may, on the application of the Authority, the approved clearing house or a person aggrieved by the failure, and after giving the first-mentioned person an opportunity to be heard, make an order directing the first-mentioned person to comply with, observe, enforce or give effect to those business rules.| (2) In this section, “person” includes an approved clearing house. |
| (3) This section is in addition to, and not in derogation of, any other remedy available to the aggrieved person referred to in subsection (1). |
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| Non-compliance with business rules not to substantially affect rights of person |
| 69. Any failure by an approved clearing house to comply with this Act or its business rules in relation to a matter shall not prevent the matter from being treated, for the purposes of this Act, as done in accordance with the business rules, so long as the failure does not substantially affect the rights of any person entitled to require compliance with the business rules. |
| Subdivision (3) — Matters requiring approval of Authority |
| Control of substantial shareholding in approved clearing house |
70.—(1) No person shall enter into any agreement to acquire shares in an approved clearing house, being an agreement by virtue of which he would, if the agreement had been carried out, become a substantial shareholder of the approved clearing house, without first obtaining the approval of the Authority to enter into the agreement.(2) No person shall become either of the following without first obtaining the approval of the Authority:| (a) | a 12% controller of an approved clearing house; | | (b) | a 20% controller of an approved clearing house. |
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(3) In subsection (2) —“12% controller”, in relation to an approved clearing house, means a person, not being a 20% controller, who alone or together with his associates —| (a) | holds not less than 12% of the shares in the approved clearing house; or | | (b) | is in a position to control not less than 12% of the votes in the approved clearing house; |
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“20% controller”, in relation to an approved clearing house, means a person who, alone or together with his associates —| (a) | holds not less than 20% of the shares in the approved clearing house; or | | (b) | is in a position to control not less than 20% of the votes in the approved clearing house. |
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(4) In this section —| (a) | a person holds a share if —| (i) | he is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act (Cap. 50); or | | (ii) | he otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act; |
| | (b) | a reference to the control of a percentage of the votes in an approved clearing house shall be construed as a reference to the control, whether direct or indirect, of that percentage of the total number of votes that might be cast in a general meeting of the approved clearing house; and | | (c) | a person, A, is an associate of another person, B, if —| (i) | A is the spouse, a parent, remoter lineal ancestor or step-parent, a son, daughter, remoter issue, step-son or step-daughter or a brother or sister of B; | | (ii) | A is a corporation the directors of which are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, where B is a corporation, of the directors of B; | | (iii) | B is a corporation the directors of which are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, where A is a corporation, of the directors of A; | | (iv) | A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B; | | (v) | B is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A; | | (vi) | A is a related corporation of B; | | (vii) | A is a corporation in which B, whether alone or together with other associates of B as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in A; | | (viii) | B is a corporation in which A, whether alone or together with other associates of A as described in sub-paragraphs (ii) to (vi), is in a position to control not less than 20% of the votes in B; or | | (ix) | A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their votes in relation to, the approved clearing house. |
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| (5) The Authority may grant its approval referred to in subsection (1) or (2) subject to such conditions or restrictions as the Authority may think fit. |
| (6) Without prejudice to subsection (13), the Authority may, for the purposes of securing compliance with subsection (1) or (2) or any condition or restriction imposed under subsection (5), by notice in writing, direct the transfer or disposal of all or any of the shares of an approved clearing house in which a substantial shareholder, 12% controller or 20% controller of the approved clearing house has an interest. |
(7) Until a person to whom a direction has been issued under subsection (6) transfers or disposes of the shares which are the subject of the direction, and notwithstanding anything to the contrary in the Companies Act or the memorandum or articles of association or other constituent document or documents of the approved clearing house —| (a) | no voting rights shall be exercisable in respect of the shares which are the subject of the direction; | | (b) | the approved clearing house shall not offer or issue any shares (whether by way of rights, bonus, share dividend or otherwise) in respect of the shares which are the subject of the direction; and | | (c) | except in a liquidation of the approved clearing house, the approved clearing house shall not make any payment (whether by way of cash dividend, dividend in kind or otherwise) in respect of the shares which are the subject of the direction. |
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| (8) Any issue of shares by an approved clearing house in contravention of subsection (7)(b) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return those shares to the approved clearing house, upon which the approved clearing house shall return to the person any payment received from the person in respect of those shares. |
| (9) Any payment made by an approved clearing house in contravention of subsection (7)(c) shall be deemed to be null and void, and a person to whom a direction has been issued under subsection (6) shall immediately return the payment he has received to the approved clearing house. |
(10) Without prejudice to sections 81SB(1) and 337(1), the Authority may, by regulations made under section 81Q, exempt all or any of the following from subsection (1) or (2), subject to such conditions or restrictions as the Authority may prescribe in those regulations:| (a) | any person or class of persons; | | (b) | any class or description of shares or interests in shares. |
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| (11) Without prejudice to sections 81SB(2) and 337(3) and (4), the Authority may, by notice in writing, exempt any person, shares or interests in shares from subsection (1) or (2), subject to such conditions or restrictions as the Authority may specify by notice in writing. |
| (12) It shall not be necessary to publish any exemption granted under subsection (11) in the Gazette. |
| (13) Any person who contravenes subsection (1) or (2), or any condition or restriction imposed by the Authority under subsection (5), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction. |
| (14) Any person who contravenes subsection (7)(b) or (c), (8) or (9) or any direction issued by the Authority under subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
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| Approval of chairman, chief executive officer, director and key persons |
71.—(1) No approved clearing house shall appoint a person as its chairman, chief executive officer or director unless the approved clearing house has obtained the approval of the Authority.| (2) The Authority may, by notice in writing, require an approved clearing house to obtain the approval of the Authority for the appointment of any person to any key management position or committee of the approved clearing house, and the approved clearing house shall comply with the notice. |
| (3) An application for approval under subsection (1) or (2) shall be made in such form and manner as the Authority may prescribe. |
| (4) Without prejudice to the generality of section 81Q and to any other matter that the Authority may consider relevant, the Authority may, in determining whether to grant its approval under subsection (1) or (2), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing. |
| (5) Subject to subsection (6), the Authority shall not refuse an application for approval under this section without giving the approved clearing house an opportunity to be heard. |
(6) The Authority may refuse an application for approval on any of the following grounds without giving the approved clearing house an opportunity to be heard:| (a) | the person is an undischarged bankrupt, whether in Singapore or elsewhere; | | (b) | the person has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012 —| (i) | involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and | | (ii) | punishable with imprisonment for a term of 3 months or more. |
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| (7) Where the Authority refuses an application for approval under this section, the Authority need not give the person who was proposed to be appointed an opportunity to be heard. |
| (8) An approved clearing house shall, as soon as practicable, give written notice to the Authority of the resignation or removal of its chairman, chief executive officer or director or of any person referred to in any notice issued by the Authority to the approved clearing house under subsection (2). |
| (9) The Authority may make regulations under section 81Q relating to the composition and duties of the board of directors or any committee of an approved clearing house. |
| (10) In this section, “committee” includes any committee of directors, disciplinary committee or appeals committee of an approved clearing house, and any body responsible for disciplinary action against a member of an approved clearing house. |
| (11) Without prejudice to sections 81SB(1) and 337(1), the Authority may, by regulations made under section 81Q, exempt any approved clearing house or class of approved clearing houses from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may prescribe in those regulations. |
| (12) Without prejudice to sections 81SB(2) and 337(3) and (4), the Authority may, by notice in writing, exempt any approved clearing house from complying with subsection (1) or (8), subject to such conditions or restrictions as the Authority may specify by notice in writing. |
| (13) It shall not be necessary to publish any exemption granted under subsection (12) in the Gazette. |
| (14) Subject to subsections (11) and (12), any approved clearing house which contravenes subsection (1), (2) or (8) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction. |
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| Listing of approved clearing houses on securities market |
72.—(1) The securities of an approved clearing house shall not be listed for quotation on a securities market that is operated by any of its related corporations, unless the approved clearing house and the operator of the securities market have entered into such arrangements as the Authority may require —| (a) | for dealing with possible conflicts of interest that may arise from such listing; and | | (b) | for the purpose of ensuring the integrity of the trading of the securities of the approved clearing house. |
(2) Where the securities of an approved clearing house are listed for quotation on a securities market operated by any of its related corporations, the listing rules of the securities market shall be deemed to allow the Authority to act in place of the operator of the securities market in making decisions and taking action, or to require the operator of the securities market to make decisions and to take action on behalf of the Authority, on —| (a) | the admission or removal of the approved clearing house to or from the official list of the securities market; and | | (b) | the granting of approval for the securities of the approved clearing house to be, or the stopping or suspending of the securities of the approved clearing house from being, listed for quotation or quoted on the securities market. |
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(3) The Authority may, by notice in writing to the operator of the securities market —| (a) | modify the listing rules of the securities market for the purpose of their application to the listing of the securities of the approved clearing house for quotation or trading; or | | (b) | waive the application of any listing rule of the securities market to the approved clearing house. |
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| (4) Any approved clearing house which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part thereof during which the offence continues after conviction. |
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| Additional powers of Authority in respect of auditors |
73.—(1) If an auditor of an approved clearing house, in the course of the performance of his duties, becomes aware of any matter or irregularity referred to in the following paragraphs, he shall immediately send to the Authority a written report of that matter or irregularity:| (a) | any matter which, in his opinion, adversely affects or may adversely affect the financial position of the approved clearing house to a material extent; | | (b) | any matter which, in his opinion, constitutes or may constitute a breach of any provision of this Act or an offence involving fraud or dishonesty; | | (c) | any irregularity that has or may have a material effect upon the accounts of the approved clearing house, including any irregularity that affects or jeopardises, or may affect or jeopardise, the funds or property of investors. |
| (2) An auditor of an approved clearing house shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement made in his report under subsection (1). |
| (3) Subsection (2) shall not restrict or affect any right, privilege or immunity that the auditor of an approved clearing house may have, apart from this section, as a defendant in an action for defamation. |
(4) The Authority may impose all or any of the following duties on an auditor of an approved clearing house, and the auditor shall carry out the duties so imposed:| (a) | a duty to submit such additional information and reports in relation to his audit as the Authority considers necessary; | | (b) | a duty to enlarge, extend or alter the scope of his audit of the business and affairs of the approved clearing house; | | (c) | a duty to carry out any other examination or establish any procedure in any particular case; | | (d) | a duty to submit a report on any matter arising out of his audit, examination or establishment of procedure referred to in paragraph (b) or (c). |
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| (5) The approved clearing house shall remunerate the auditor in respect of the discharge by him of all or any of the duties referred to in subsection (4). |
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| Subdivision (4) — Immunity |
| Immunity from criminal or civil liability |
74.—(1) No criminal or civil liability shall be incurred by an approved clearing house, or by any person specified in subsection (2), for any thing done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of the obligations of the approved clearing house under this Act or under the business rules of the approved clearing house (including the default rules of the approved clearing house).(2) For the purposes of subsection (1), the specified person is any person acting on behalf of the approved clearing house, including —| (a) | any director of the approved clearing house; or | | (b) | any member of any committee established by the approved clearing house. |
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| Division 3 — Regulation of Recognised Clearing Houses |
75.—(1) A recognised clearing house —| (a) | shall operate a safe and efficient clearing facility; | | (b) | shall manage any risks associated with its business and operations prudently; | | (c) | in discharging its obligations under this Act, shall not act contrary to the interests of the public, having particular regard to the interests of the investing public; | | (d) | shall ensure that access for participation in its clearing facility is subject to criteria that are fair and objective, and that are designed to ensure the safe and efficient functioning of its facility and to protect the interests of the investing public; | | (e) | shall maintain business rules that make satisfactory provision for —| (i) | the clearing facility to be operated in a safe and efficient manner; and | | (ii) | the proper regulation and supervision of its members; |
| | (f) | shall enforce compliance by its members with its business rules; | | (g) | shall have sufficient financial, human and system resources —| (i) | to operate a safe and efficient clearing facility; | | (ii) | to meet contingencies or disasters; and | | (iii) | to provide adequate security arrangements; |
| | (h) | shall maintain governance arrangements that are adequate for the clearing facility to be operated in a safe and efficient manner; and | | (i) | shall ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers. |
| (2) The obligations imposed on a recognised clearing house under this Act shall apply to all facilities for clearing or settlement operated by the recognised clearing house. |
| (3) Notwithstanding subsection (2), the Authority may by notice in writing exempt any clearing facility operated by a recognised clearing house from all or any of the provisions of this Act, if the Authority is satisfied that such exemption would not detract from the objectives specified in section 47. |
| (4) It shall not be necessary to publish any exemption granted under subsection (3) in the Gazette. |
| (5) In subsection (1)(g), “contingencies or disasters” includes technical disruptions occurring within automated systems. |
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| Obligation to notify Authority of certain matters |
76.—(1) A recognised clearing house shall, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:| (a) | any material change to the information provided by the recognised clearing house in its application under section 50(1) or (2) or 54(1); | | (b) | the recognised clearing house becoming aware of any financial irregularity or other matter which in its opinion —| (i) | may affect its ability to discharge its financial obligations; or | | (ii) | may affect the ability of a member of the recognised clearing house to meet its financial obligations to the recognised clearing house; |
| | (c) | any other matter that the Authority may —| (i) | prescribe by regulations made under section 81Q for the purposes of this paragraph; or | | (ii) | specify by notice in writing to the recognised clearing house in any particular case. |
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| (2) A recognised clearing house shall notify the Authority of any matter that the Authority may prescribe by regulations made under section 81Q for the purposes of this subsection, no later than such time as the Authority may prescribe by those regulations. |
| (3) A recognised clearing house shall notify the Authority of any matter that the Authority may specify by notice in writing to the recognised clearing house, no later than such time as the Authority may specify in that notice. |
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| Obligation in relation to customers’ money and assets held by recognised clearing house |
77.—(1) Without prejudice to sections 81Q and 341, the Authority may make regulations —| (a) | relating to how any money or assets deposited with or paid to a recognised clearing house by its members, for or in relation to any contracts of the customers of those members, are to be held by the recognised clearing house and, in particular, requiring any such money or assets to be deposited in trust accounts or custody accounts; | | (b) | relating to the circumstances under which, and the purposes for which, the money or assets referred to in paragraph (a) may be used by the recognised clearing house; | | (c) | relating to how the recognised clearing house may invest the money or assets referred to in paragraph (a); and | | (d) | for any other purpose relating to the handling of the money or assets referred to in paragraph (a). |
(2) Regulations made under this section may provide —| (a) | that a contravention of any specified provision thereof shall be an offence; and | | (b) | for a penalty not exceeding a fine of $150,000 and, in the case of a continuing offence, for a further penalty not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
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| Obligation to maintain proper records |
78.—(1) A recognised clearing house shall maintain a record of all transactions effected through its clearing facility.(2) The Authority may prescribe by regulations made under section 81Q —| (a) | the form and manner in which the record referred to in subsection (1) shall be maintained; | | (b) | the extent to which the record includes details of each transaction; and | | (c) | the period of time that the record is to be maintained. |
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| Obligation to submit periodic reports |
| 79. A recognised clearing house shall submit to the Authority such reports in such form and manner, and at such frequency, as the Authority may prescribe. |
| Obligation to assist Authority |
80. A recognised clearing house shall provide such assistance to the Authority as the Authority may require for the performance of the functions and duties of the Authority, including —| (a) | the furnishing of such returns as the Authority may require for the proper administration of this Act; and | | (b) | the provision of —| (i) | such books and information as the Authority may require for the proper administration of this Act, being books and information —| (A) | relating to the business of the recognised clearing house; or | | (B) | in respect of any transaction or class of transactions cleared or settled by the recognised clearing house; and |
| | (ii) | such other information as the Authority may require for the proper administration of this Act. |
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| Obligation to maintain confidentiality |
81.—(1) Subject to subsection (2), a recognised clearing house and its officers and employees shall maintain, and aid in maintaining, confidentiality of all user information that —| (a) | comes to the knowledge of the recognised clearing house or any of its officers or employees; or | | (b) | is in the possession of the recognised clearing house or any of its officers or employees. |
(2) Subsection (1) shall not apply to —| (a) | the disclosure of user information for such purposes, or in such circumstances, as the Authority may prescribe; | | (b) | any disclosure of user information which is authorised by the Authority to be disclosed or furnished; or | | (c) | the disclosure of user information pursuant to any requirement imposed under any written law or order of court in Singapore. |
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| (3) For the avoidance of doubt, nothing in this section shall be construed as preventing a recognised clearing house from entering into a written agreement with a user which obliges the recognised clearing house to maintain a higher degree of confidentiality than that specified in this section. |
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| Penalties under this Division |
| 81A. Any recognised clearing house which contravenes section 75(1), 76, 78(1), 79, 80 or 81(1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
| Application of this Division |
| 81B. This Division shall apply to such transaction or class of transactions cleared or settled by any approved clearing house or recognised clearing house, or by any class of approved clearing houses or recognised clearing houses, and to such extent, as may be prescribed by the Authority. |
| Proceedings of approved clearing house or recognised clearing house shall take precedence over law of insolvency |
81C.—(1) The following shall not be invalid to any extent at law by reason only of inconsistency with any written law or rule of law relating to the distribution of the assets of a person on insolvency, bankruptcy or winding up, or on the appointment of a receiver, a receiver and manager or a person in an equivalent capacity over any of the assets of a person:| (a) | a market contract; | | (b) | a disposition of property pursuant to a market contract; | | (c) | the provision of market collateral; | | (d) | a contract effected by an approved clearing house or a recognised clearing house for the purpose of realising property provided as market collateral, or any disposition of property pursuant to such a contract; | | (e) | a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral; | | (f) | a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made; | | (g) | a disposition of property for the purpose of enforcing a market charge; | | (h) | a market charge; | | (i) | any default proceedings. |
(2) A relevant office holder, or a court applying the law relating to insolvency in Singapore, shall not exercise his or its power to prevent, or interfere with —| (a) | the settlement of a market contract in accordance with the business rules of an approved clearing house or a recognised clearing house, or any proceedings or other action taken under those business rules; or | | (b) | any default proceedings. |
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| (3) Subsection (2) shall not operate to prevent a relevant office holder from recovering an amount under section 81I after the completion of a specified event referred to in section 81I(3). |
| (4) Where a participant which is also a bank licensed under the Banking Act (Cap. 19) becomes insolvent, the liabilities of the bank accorded priority under sections 61 and 62 of that Act and the Payment and Settlement Systems (Finality and Netting) Act (Cap. 231) shall have priority over any unsecured liabilities of the bank arising from and after the settlement of market contracts. |
| (5) For the avoidance of doubt, subsection (4) shall not affect the settlement of market contracts in accordance with the business rules of an approved clearing house or a recognised clearing house. |
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| Supplementary provisions as to default proceedings |
81D.—(1) A court may, on the application of a relevant office holder, make an order to alter, or to release the relevant office holder from complying with, the functions of his office that are affected by default proceedings, if default proceedings have been, could be, or could have been, taken.| (2) The functions of the relevant office holder shall be construed subject to an order made under subsection (1). |
| (3) Sections 45, 74 and 76 of the Bankruptcy Act (Cap. 20) and sections 210, 258, 260, 262(3), 299(1) and 309 of the Companies Act (Cap. 50) shall not prevent, or interfere with, any default proceedings. |
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| Duty to report on completion of default proceedings |
81E.—(1) An approved clearing house or a recognised clearing house —| (a) | shall, upon the conclusion of any default proceedings commenced by it, make a report on those proceedings stating, as the case may be, in respect of each defaulter who is a subject of those proceedings —| (i) | the net sum, if any, certified by it to be payable by or to the defaulter; or | | (ii) | the fact that no sum is so payable; and |
| | (b) | may include in that report such other particulars in respect of those proceedings as it thinks fit. |
(2) An approved clearing house, or a recognised clearing house, which has made a report under subsection (1) shall supply the report to —| (a) | the Authority; | | (b) | any relevant office holder acting in relation to —| (i) | the defaulter to whom the report relates; or | | (ii) | the estate of that defaulter; and |
| | (c) | where there is no relevant office holder referred to in paragraph (b), the defaulter to whom the report relates. |
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| (3) The approved clearing house or recognised clearing house shall publish a notice of the fact that a report has been made under subsection (1) in such manner as it thinks appropriate to bring that fact to the attention of the creditors of the defaulter to whom the report relates. |
(4) Where a relevant office holder or defaulter receives under subsection (2) a report made under subsection (1), he shall, at the request of a creditor of the defaulter to whom the report relates —| (a) | make the report available for inspection by the creditor; and | | (b) | on payment of such reasonable fee as the relevant office holder or defaulter, as the case may be, determines, supply to the creditor the whole or any part of that report. |
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| (5) In subsections (2), (3) and (4), “report” includes a copy of a report. |
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| Net sum payable on completion of default proceedings |
81F.—(1) This section shall apply to any net sum certified under section 81E(1)(a)(i) by an approved clearing house or a recognised clearing house, upon the completion by it of any default proceedings, to be payable by or to a defaulter.(2) Notwithstanding sections 87 and 88 of the Bankruptcy Act (Cap. 20) and section 327 of the Companies Act (Cap. 50), where, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, a receiving order or winding up order has been made, or a resolution for voluntary winding up has been passed, any net sum as certified under section 81E(1)(a)(i) shall —| (a) | be provable in the bankruptcy or winding up or payable to the relevant office holder, as the case may be; and | | (b) | be taken into account, where appropriate, under section 88 of the Bankruptcy Act or section 327 of the Companies Act. |
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| Disclaimer of onerous property, rescission of contracts, etc. |
81G.—(1) Section 110 of the Bankruptcy Act (Cap. 20) and section 332 of the Companies Act (Cap. 50) shall not apply to —| (a) | a market contract; | | (b) | a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral; | | (c) | a market charge; or | | (d) | any default proceedings. |
(2) Section 77 of the Bankruptcy Act and sections 259 and 299(1) of the Companies Act shall not apply to any act, matter or thing which has been done under —| (a) | a market contract; | | (b) | a disposition of property pursuant to a market contract; | | (c) | the provision of market collateral; | | (d) | a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral, or any disposition of property pursuant to such a contract; | | (e) | a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral; | | (f) | a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made; | | (g) | a disposition of property for the purpose of enforcing a market charge; | | (h) | a market charge; or | | (i) | any default proceedings. |
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| Adjustment of prior transactions |
81H.—(1) No order shall be made, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, in relation to any matter to which this section applies, by a court under any of the following provisions in any proceedings, whether instituted before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012:| (a) | section 98 or 99 of the Bankruptcy Act (Cap. 20); | | (b) | section 227T, 329 or 331 of the Companies Act (Cap. 50); | | (c) | section 73B of the Conveyancing and Law of Property Act (Cap. 61). |
(2) The matters to which this section applies are as follows:| (a) | a market contract; | | (b) | a disposition of property pursuant to a market contract; | | (c) | the provision of market collateral; | | (d) | a contract effected by an approved clearing house, or a recognised clearing house, for the purpose of realising property provided as market collateral; | | (e) | a disposition of property in accordance with the business rules of an approved clearing house, or a recognised clearing house, relating to the application of property provided as market collateral; | | (f) | a disposition of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposition is made; | | (g) | a disposition of property for the purpose of enforcing a market charge; | | (h) | a market charge; | | (i) | any default proceedings. |
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| Right of relevant office holder to recover certain amounts arising from certain transactions |
81I.—(1) Where a participant (referred to in this section as the first participant) sells securities at an over-value to, or purchases securities at an under-value from, another participant (referred to in this section as the second participant) in the circumstances referred to in subsection (3), and thereafter a relevant office holder acts for —| (a) | the second participant; | | (b) | the principal of the second participant in the sale or purchase; or | | (c) | the estate of the second participant or person referred to in paragraph (b), |
| then, unless a court otherwise orders, the relevant office holder may recover from the first participant, or the principal of the first participant, an amount equal to the specified gain obtained under the sale or purchase by the first participant, or the principal of the first participant. |
| (2) The amount equal to the specified gain is recoverable even if the sale or purchase may have been discharged according to the business rules of an approved clearing house, or a recognised clearing house, and replaced by a market contract. |
(3) The circumstances referred to in subsection (1) are that —| (a) | a specified event has occurred in relation to the second participant, or the principal of the second participant, within the period of 6 months immediately following the date on which the sale or purchase was entered into; and | | (b) | at the time the sale or purchase was entered into, the first participant, or the principal of the first participant, knew, or ought reasonably to have known, that a specified event was likely to occur in relation to the second participant, or the principal of the second participant. |
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(4) In this section —“specified event”, in relation to the second participant or a person who is or was, in respect of a sale or purchase referred to in subsection (1), the principal of the second participant, means —| (a) | the making of a bankruptcy order against the second participant or that person, as the case may be; | | (b) | the making of a statutory declaration in respect of the second participant or that person, as the case may be, under section 291(1) of the Companies Act (Cap. 50); | | (c) | the summoning of a meeting of creditors in relation to the second participant or that person, as the case may be, under section 296 of the Companies Act; | | (d) | the making of an application for the winding up of the second participant or that person, as the case may be, before a court; or | | (e) | the making of a judicial management order by a court under Part VIIIA of the Companies Act in respect of the second participant or that person, as the case may be; |
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“specified gain”, in relation to a sale or purchase referred to in subsection (1), means the difference, as at the time the sale or purchase was entered into, between —| (a) | the market value of the securities which are the subject of the sale or purchase; and | | (b) | the value of the consideration for the sale or purchase. |
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| Application of market collateral not affected by certain other interest, etc. |
81J.—(1) This section shall have effect with respect to the application by an approved clearing house, or a recognised clearing house, of property provided as market collateral (referred to in this section as the property).(2) The property may be applied in accordance with the business rules or default rules of the approved clearing house or recognised clearing house, so far as it is necessary for it to be so applied, notwithstanding —| (a) | any prior equitable interest or right, or any right or remedy arising from a breach of fiduciary duty, unless the approved clearing house or recognised clearing house had actual notice of the interest, right or breach of duty (other than any interest or right arising from the situation referred to in paragraph (b)), as the case may be, at the time the property was provided as market collateral; or | | (b) | that the property is deposited by the approved clearing house or recognised clearing house in a trust account held for the benefit of a participant. |
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| (3) No right or remedy arising subsequent to the provision of the property as market collateral may be enforced to prevent, or interfere with, the application of the property by the approved clearing house or recognised clearing house in accordance with its business rules or default rules. |
| (4) Where an approved clearing house, or a recognised clearing house, has power under this section to apply the property notwithstanding an interest, a right or a remedy, a person to whom the approved clearing house or recognised clearing house disposes of the property in accordance with its business rules or default rules shall take free from that interest, right or remedy. |
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| Enforcement of judgments over property subject to market charge, etc. |
81K.—(1) Where, whether before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, any property is subject to a market charge or has been provided as market collateral, no execution or other legal process for the enforcement of any judgment or order may be commenced or continued, and no distress may be levied, against the property by a person not seeking to enforce any interest in, or security over, the property, except with the consent of the approved clearing house or recognised clearing house in favour of which the market charge was granted.| (2) Where by virtue of this section a person would not be entitled to enforce a judgment or an order against any property, any injunction or other remedy granted by any court with a view to facilitating the enforcement of any such judgment or order shall not extend to that property. |
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| Law of insolvency in other jurisdictions |
81L.—(1) Notwithstanding any other written law or rule of law, a court shall not recognise or give effect to —| (a) | an order of a court exercising jurisdiction under the law of insolvency in any place outside Singapore; or | | (b) | an act of a person appointed in any place outside Singapore to perform a function under the law of insolvency in that place, |
| insofar as the making of the order by a court in Singapore, or the doing of the act by a relevant office holder, would be prohibited under this Act. |
| (2) In this section, “law of insolvency”, in relation to a place outside Singapore, means any law of that place which is similar to, or serves the same purposes as, any part of the law of insolvency in Singapore. |
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| Participant to be party to certain transactions as principal |
81M.—(1) Where —| (a) | a participant, in his capacity as such, enters into any transaction (including a market contract) with an approved clearing house or a recognised clearing house; and | | (b) | but for this subsection or any provision in the business rules or default rules of the approved clearing house or recognised clearing house, the participant would be a party to that transaction as agent, |
| then, notwithstanding any other written law or rule of law, as between, and only as between, the approved clearing house or recognised clearing house and the participant or the person who is his principal in respect of that transaction, the participant shall, for all purposes (including any action, claim or demand, whether civil or criminal), be deemed to be a party to that transaction as principal, and not as agent. |
(2) Where —| (a) | 2 or more participants, in their capacities as such, enter into any transaction; and | | (b) | but for this subsection, any of the participants would be a party to that transaction as agent, |
| then, notwithstanding any other written law or rule of law, except as between, and only as between, a participant to whom paragraph (b) applies and the person who is his principal in respect of that transaction, the participant shall, for all purposes (including any action, claim or demand, whether civil or criminal), be deemed to be a party to that transaction as principal, and not as agent. |
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| Preservation of rights, etc. |
81N. Except to the extent that it expressly provides, this Division shall not operate to limit, restrict or otherwise affect —| (a) | any right, title, interest, privilege, obligation or liability of a person; or | | (b) | any investigation, legal proceedings or remedy in respect of any such right, title, interest, privilege, obligation or liability. |
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| Immunity from criminal or civil liability |
81O.—(1) No criminal or civil liability shall be incurred by —| (a) | a person discharging, by virtue of a delegation under the default rules of an approved clearing house or a recognised clearing house, an obligation of the approved clearing house or recognised clearing house in connection with any default proceedings; or | | (b) | any person acting on behalf of a person referred to in paragraph (a), including —| (i) | any member of the board of directors of the person referred to in paragraph (a); and | | (ii) | any member of any committee established by the person referred to in paragraph (a), |
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| for any thing done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of that obligation. |
| (2) Where a relevant office holder takes action in relation to any property of a defaulter which is liable to be dealt with in accordance with the default rules of an approved clearing house or a recognised clearing house, and the relevant office holder reasonably believes or has reasonable grounds for believing that he is entitled to take that action, the relevant office holder shall not be liable to any person in respect of any loss or damage resulting from any action of the relevant office holder, except insofar as the loss or damage, as the case may be, is caused by the negligence of the relevant office holder. |
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| Division 5 — General Powers of Authority |
| Power of Authority to remove officers |
81P.—(1) Where the Authority is satisfied that any of the following applies to an officer of an approved clearing house or a recognised clearing house (such approved clearing house or recognised clearing house being a Singapore corporation), the Authority may, if it thinks it necessary in the interests of the public or a section of the public or for the protection of investors, by notice in writing direct the approved clearing house or recognised clearing house to remove the officer from his office or employment, and the approved clearing house or recognised clearing house shall comply with such notice, notwithstanding the provisions of section 152 of the Companies Act (Cap. 50) or anything in any other law or in the memorandum or articles of association or other constituent document or documents of the approved clearing house or recognised clearing house:| (a) | the officer has wilfully contravened, or wilfully caused the approved clearing house or recognised clearing house to contravene, this Act or the business rules of the approved clearing house or recognised clearing house; | | (b) | the officer has, without reasonable excuse, failed to ensure compliance with this Act, or with the business rules of the approved clearing house or recognised clearing house, by the approved clearing house or recognised clearing house, by a member of the approved clearing house or recognised clearing house or by a person associated with that member; | | (c) | the officer has failed to discharge the duties or functions of his office or employment; | | (d) | the officer is an undischarged bankrupt, whether in Singapore or elsewhere; | | (e) | the officer has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part; | | (f) | the officer has, whether in Singapore or elsewhere, made a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation; | | (g) | the officer has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012, involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly. |
| (2) Without prejudice to any other matter that the Authority may consider relevant, the Authority may, in determining whether an officer of an approved clearing house, or a recognised clearing house, has failed to discharge the duties or functions of his office or employment for the purposes of subsection (1)(c), have regard to such criteria as the Authority may prescribe or specify in directions issued by notice in writing. |
| (3) Subject to subsection (4), the Authority shall not direct an approved clearing house, or a recognised clearing house, to remove an officer from his office or employment without giving the approved clearing house or recognised clearing house an opportunity to be heard. |
(4) The Authority may direct an approved clearing house, or a recognised clearing house, to remove an officer from his office or employment under subsection (1) on any of the following grounds without giving the approved clearing house or recognised clearing house an opportunity to be heard:| (a) | the officer is an undischarged bankrupt, whether in Singapore or elsewhere; | | (b) | the officer has been convicted, whether in Singapore or elsewhere, of an offence committed before, on or after the date of commencement of section 7 of the Securities and Futures (Amendment) Act 2012 —| (i) | involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and | | (ii) | punishable with imprisonment for a term of 3 months or more. |
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| (5) Where the Authority directs an approved clearing house, or a recognised clearing house, to remove an officer from his office or employment under subsection (1), the Authority need not give that officer an opportunity to be heard. |
| (6) Any approved clearing house or recognised clearing house that is aggrieved by a direction of the Authority made in relation to the approved clearing house or recognised clearing house under subsection (1) may, within 30 days after the approved clearing house or recognised clearing house is notified of the direction, appeal to the Minister, whose decision shall be final. |
| (7) Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority under this section shall continue to have effect pending the decision of the Minister. |
| (8) The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority under this section, and such modified action shall have effect from the date of the decision of the Minister. |
| (9) Subject to subsection (10), no criminal or civil liability shall be incurred by an approved clearing house, or a recognised clearing house, in respect of any thing done or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of its obligations under this section. |
| (10) Any approved clearing house or recognised clearing house which, without reasonable excuse, contravenes a written notice issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
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| Power of Authority to make regulations |
81Q.—(1) Without prejudice to section 341, the Authority may make regulations for the purposes of this Part, including regulations —| (a) | relating to the approval of approved clearing houses and the recognition of recognised clearing houses; | | (b) | relating to the requirements applicable to any person who establishes, operates or assists in establishing or operating a clearing facility, whether or not the person is approved as an approved clearing house under section 51(1)(a) or recognised as a recognised clearing house under section 51(1)(b) or (2); and | | (c) | for the purposes of section 59 and, in particular —| (i) | requiring an approved clearing house to take into account specified positions for the purposes of determining if any limits established or varied under section 59(1) have been exceeded; | | (ii) | requiring an approved clearing house to take specified steps to ensure compliance with those limits; and | | (iii) | specifying measures to manage any risks assumed by an approved clearing house. |
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(2) Regulations made under this section may provide —| (a) | that a contravention of any specified provision thereof shall be an offence; and | | (b) | for a penalty not exceeding a fine of $150,000 or imprisonment for a term not exceeding 12 months or both for each offence and, in the case of a continuing offence, for a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part thereof during which the offence continues after conviction. |
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| Power of Authority to issue directions |
81R.—(1) The Authority may issue directions, whether of a general or specific nature, by notice in writing, to an approved clearing house or a recognised clearing house, if the Authority thinks it necessary or expedient —| (a) | for ensuring the safe and efficient operation of any clearing facility operated by the approved clearing house or recognised clearing house, or of clearing facilities, operated by approved clearing houses or recognised clearing houses, in general; | | (b) | for ensuring the integrity and stability of the capital markets or the financial system; | | (c) | in the interests of the public or a section of the public or for the protection of investors; | | (d) | for the effective administration of this Act; or | | (e) | for ensuring compliance with any condition or restriction as may be imposed by the Authority under section 58(2), 70(5) or (10), 71(11) or (12) or 81SB(1) or (2), or such other obligations or requirements under this Act or as may be prescribed by the Authority. |
| (2) An approved clearing house or a recognised clearing house shall comply with every direction issued to it under subsection (1). |
| (3) Any approved clearing house or recognised clearing house which, without reasonable excuse, contravenes a direction issued to it under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
| (4) It shall not be necessary to publish any direction issued under subsection (1) in the Gazette. |
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| Emergency powers of Authority |
81S.—(1) Where the Authority has reason to believe that an emergency exists, or thinks that it is necessary or expedient in the interests of the public or a section of the public or for the protection of investors, the Authority may direct by notice in writing an approved clearing house or a recognised clearing house to take such action as the Authority considers necessary to maintain or restore the safe and efficient operation of the clearing facilities operated by the approved clearing house or recognised clearing house.(2) Without prejudice to subsection (1), the actions which the Authority may direct an approved clearing house or a recognised clearing house to take include —| (a) | ordering the liquidation of all positions or any part thereof, or the reduction of such positions; | | (b) | altering the conditions of delivery of transactions cleared or settled, or to be cleared or settled, through the clearing facility; | | (c) | fixing the settlement price at which transactions are to be liquidated; | | (d) | requiring margins or additional margins for transactions cleared or settled, or to be cleared or settled, through the clearing facility; and | | (e) | modifying or suspending any of the business rules of the approved clearing house or recognised clearing house. |
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(3) Where an approved clearing house or a recognised clearing house fails to comply with any direction of the Authority under subsection (1) within such time as is specified by the Authority, the Authority may —| (a) | set margin levels for transactions cleared or settled, or to be cleared or settled, through the clearing facility to cater for the emergency; | | (b) | set limits that may apply to positions acquired in good faith prior to the date of the notice issued by the Authority; or | | (c) | take such other action as the Authority thinks fit to maintain or restore the safe and efficient operation of the clearing facilities operated by the approved clearing house or recognised clearing house. |
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(4) In this section, “emergency” means any threatened or actual market manipulation or cornering, and includes —| (a) | any act of any government affecting any commodity or securities; | | (b) | any major market disturbance which prevents a market from accurately reflecting the forces of supply and demand for any commodity or securities; or | | (c) | any undesirable situation or practice which, in the opinion of the Authority, constitutes an emergency. |
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| (5) The Authority may modify any action taken by an approved clearing house or a recognised clearing house under subsection (1), including the setting aside of that action. |
| (6) Any person who is aggrieved by any action taken by the Authority, or by an approved clearing house or a recognised clearing house, under this section may, within 30 days after the person is notified of the action, appeal to the Minister, whose decision shall be final. |
| (7) Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority, or by an approved clearing house or recognised clearing house, under this section shall continue to have effect pending the decision of the Minister. |
| (8) The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority, or by an approved clearing house or a recognised clearing house, under this section, and any such modified action shall have effect from the date of the decision of the Minister. |
| (9) Any approved clearing house or recognised clearing house which fails to comply with a direction issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. |
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| Power of Authority to appoint adviser |
81SA.—(1) The Authority may appoint one or more persons as statutory advisers, on such terms and conditions as the Authority may specify, to advise an approved clearing house or a recognised clearing house on the proper management of such business of the approved clearing house or recognised clearing house as the Authority may determine, where —| (a) | the approved clearing house or recognised clearing house informs the Authority that it is or is likely to become insolvent, that it is or is likely to become unable to meet its obligations, or that it has suspended or is about to suspend payments; | | (b) | the approved clearing house or recognised clearing house becomes unable to meet its obligations, or is insolvent, or suspends payments; | | (c) | the Authority is of the opinion that the approved clearing house or recognised clearing house —| (i) | is carrying on its business in a manner likely to be detrimental to the objectives specified in section 47; | | (ii) | is or is likely to become insolvent, is or is likely to become unable to meet its obligations, or is about to suspend payments; | | (iii) | has contravened any of the provisions of this Act; or | | (iv) | has failed to comply with any condition attached to its approval as an approved clearing house or its recognition as a recognised clearing house; or |
| | (d) | the Authority thinks that it is necessary or expedient in the interests of the public or a section of the public or for the protection of investors to do so. |
(2) Where the Authority has exercised its power under subsection (1), the Authority may at any time do one or more of the following:| (a) | vary or revoke any appointment made by the Authority under subsection (1), on such terms and conditions as the Authority may specify; | | (b) | appoint another statutory adviser in accordance with subsection (1) in place of or in addition to the statutory adviser earlier appointed; | | (c) | add to, vary or revoke any term or condition specified by the Authority under this section. |
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(3) No liability shall be incurred by a statutory adviser for anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of or in connection with —| (a) | the exercise or purported exercise of any power under this Act; | | (b) | the performance or purported performance of any function or duty under this Act; or | | (c) | the compliance or purported compliance with this Act. |
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| (4) The Authority may at any time fix the remuneration and expenses to be paid by an approved clearing house or a recognised clearing house to a statutory adviser appointed in relation to the approved clearing house or recognised clearing house, whether or not the appointment has been terminated. |
| (5) An approved clearing house or a recognised clearing house shall reimburse the Authority for any remuneration and expenses paid by the Authority to a statutory adviser that is payable by the approved clearing house or recognised clearing house to the statutory adviser. |
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| Power of Authority to exempt approved clearing house or recognised clearing house from provisions of this Part |
81SB.—(1) Without prejudice to section 337(1), the Authority may, by regulations made under section 81Q, exempt any approved clearing house, recognised clearing house, or class of approved clearing houses or recognised clearing houses from any provision of this Part, subject to such conditions or restrictions as the Authority may prescribe in those regulations.| (2) Without prejudice to section 337(3) and (4), the Authority may, by notice in writing, exempt any approved clearing house or recognised clearing house from any provision of this Part, subject to such conditions or restrictions as the Authority may specify by notice in writing, if the Authority is satisfied that the non-compliance by that approved clearing house or recognised clearing house with that provision will not detract from the objectives specified in section 47. |
| (3) It shall not be necessary to publish any exemption granted under subsection (2) in the Gazette.”. |
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