RES 3 – Rules, Ethics and Skills for Fund Management

Correct: In accordance with ICE Futures Singapore Rules and the broader regulatory requirements under the Securities and Futures Act (SFA) in Singapore, Trading Members are mandated to maintain comprehensive records of all transactions. This includes the full audit trail from order inception to execution and clearing. These records must be preserved for a minimum of five years and must be kept in a manner that allows the Exchange or the Monetary Authority of Singapore (MAS) to access and inspect them efficiently.

Incorrect: The suggestion to keep records for only three years is incorrect as it falls short of the five-year minimum requirement set by the Exchange and Singapore law. Retaining only final clearing reports is insufficient because the regulatory requirement covers the entire lifecycle of the order, including instructions and modifications. Purging records after two years based on an audit cycle is not permitted, as the five-year retention period is a fixed statutory and regulatory minimum regardless of audit status.

Takeaway: Trading Members of ICE Futures Singapore must ensure all transaction and order audit trail records are retained for at least five years to meet Singapore regulatory and Exchange standards.

Correct: Under ICE Futures Singapore rules, an EFRP must involve a bona fide exchange of a futures position for a corresponding related position (physical or OTC). Both parties are required to maintain records that prove the existence and value of this related position and must provide them to the Exchange upon request to ensure the trade was not a wash sale or fictitious transaction.

Incorrect: Record-keeping is required for all types of related positions, including OTC swaps, not just physical commodities. While MAS oversees the markets, the primary reporting and documentation requirement for EFRPs is to the Exchange, and it is not a 2-hour mandatory submission for every trade. While Clearing Members have oversight duties, the primary obligation to maintain proof of the related position lies with the parties involved in the transaction to demonstrate the trade’s legitimacy.

Takeaway: Participants in an EFRP must maintain verifiable documentation of the related position to prove the transaction is a legitimate, bona fide exchange.

Correct: Under the Securities and Futures Act (SFA), MAS has the statutory authority to issue written directions to an approved exchange, such as ICE Futures Singapore, if it is necessary or expedient in the interest of the public or for the protection of investors. These directions are mandatory and can include requirements to suspend trading, limit positions, or amend business rules to maintain market integrity.

Incorrect: The suggestion that a court order is required is incorrect because the SFA provides MAS with direct administrative power to issue directions without prior judicial intervention. Allowing a six-month self-regulation period is not a requirement and could jeopardize investor protection in urgent situations. Referring the matter to SGX is incorrect because SGX is a separate commercial entity and approved exchange; it does not have regulatory authority over ICE Futures Singapore, as MAS is the sole primary regulator.

Takeaway: MAS has the direct legal authority under the SFA to issue mandatory written directions to ICE Futures Singapore to protect investors and ensure market integrity.

Correct: Under the ICE Clear Singapore Rules, Clearing Members have a continuous obligation to maintain minimum financial requirements, such as a minimum Net Worth (typically USD 10 million). If at any time the financial resources fall below this threshold, the member is legally and contractually obligated to provide immediate written notice to the Clearing House (ICE Clear Singapore) to ensure market integrity and allow for appropriate risk mitigation measures as per the Securities and Futures Act framework.

Incorrect: Waiting for month-end statements is incorrect because capital breaches represent immediate systemic risk and require instant reporting to the Clearing House. Increasing margin deposits is a separate risk management tool and does not waive the fundamental requirement to maintain minimum base capital or net worth. Notifying the Singapore Exchange (SGX) is incorrect because ICE Clear Singapore is the specific clearing house for ICE Futures Singapore, and members must report directly to the clearing house they are a member of, as well as the Monetary Authority of Singapore (MAS) where required.

Takeaway: Clearing Members must provide immediate written notification to ICE Clear Singapore if their financial resources fall below the mandatory minimum thresholds.

Correct: According to the MAS Guidelines on Outsourcing, financial institutions (FIs) are required to maintain supervisory oversight. For material outsourcing, the FI must ensure that the contract includes clauses for audit rights for both the FI and MAS. Furthermore, a robust exit strategy is essential to ensure that the FI can transition the function back in-house or to another provider without disrupting its operations or the financial system.

Incorrect: Contractual indemnity does not absolve the financial institution of its regulatory responsibilities to MAS; the FI remains accountable for its outsourced activities. Avoiding material outsourcing does not eliminate the need for sound risk management, and MAS expects FIs to manage all outsourcing risks proportionately. Relying solely on a provider’s self-certification or general global standards is insufficient, as the FI must perform its own due diligence and ongoing monitoring tailored to Singapore’s specific regulatory environment.

Takeaway: Financial institutions in Singapore retain ultimate responsibility for outsourced functions and must ensure oversight through mandatory audit rights and comprehensive exit planning for material arrangements.

Correct: Front-running occurs when a person trades on their own account while in possession of non-public information regarding a pending client order that is likely to affect the price. Bucketing refers to the practice where a broker takes the opposite side of a customer’s order or matches orders internally (off-exchange) without executing them on the exchange’s platform or complying with specific exchange rules for crossing and pre-execution communications. Both practices are prohibited under the Securities and Futures Act (SFA) and the ICE Futures Singapore Rulebook to maintain market integrity and transparency.

Incorrect: Market rigging involves creating a false or misleading appearance of active trading, which is distinct from front-running. Internal matching without following exchange protocols is not a ‘permissible off-market transaction’ under the Companies Act; it is a violation of exchange rules. Insider trading typically involves non-public price-sensitive information about a listed entity, whereas front-running involves knowledge of order flow. Wash trading involves transactions where there is no change in beneficial ownership, which differs from matching two different clients’ orders (bucketing). The PDPA governs personal data, not the execution of trades, and pre-negotiated trades on ICE Futures Singapore must still follow strict reporting and execution requirements to avoid being classified as bucketing.

Takeaway: Front-running and bucketing are serious market misconduct offenses in Singapore that involve the misuse of client order information and the failure to provide clients with competitive exchange execution.

Correct: Under the Securities and Futures Act (SFA), an Approved Exchange such as ICE Futures Singapore has a legal obligation to ensure, as far as is reasonably practicable, a fair, orderly, and transparent market. This involves implementing effective surveillance systems to identify and prevent prohibited activities like wash trading or insider dealing, and ensuring that the price discovery process is transparent and accessible to all market participants on an equitable basis.

Incorrect: The other options are incorrect because: transparency in the Singapore context requires the public dissemination of trade data, not just private reporting to the regulator. An exchange cannot guarantee the absence of margin calls or eliminate volatility, as its duty is to provide an orderly process for price discovery, not to control market outcomes. Finally, the SFA establishes a co-regulatory model where the exchange has a primary duty to monitor its own market; it is not a responsibility held exclusively by MAS.

Takeaway: Approved Exchanges in Singapore are legally mandated under the SFA to proactively monitor their markets and ensure transparent price discovery to maintain market integrity.

Correct: In accordance with IFSG Rules and the Monetary Authority of Singapore (MAS) requirements for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), members must conduct enhanced due diligence (EDD) when a potential sanctions match is identified. If the match is confirmed, the firm must not deal with the person, must freeze their assets, and is required under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) and Terrorism (Suppression of Financing) Act (TSOFA) to file a Suspicious Transaction Report (STR) with the Suspicious Transaction Reporting Office (STRO).

Incorrect: Executing the trade while a match is suspected (option_b) would be a direct violation of Singapore’s sanctions laws and IFSG compliance rules. Relying solely on initial KYC when new red flags appear (option_c) fails the requirement for ongoing monitoring and the application of a risk-based approach. The IFSG Market Supervision department (option_d) is responsible for market integrity and oversight, but the legal and regulatory responsibility for client due diligence and sanctions screening rests solely with the member firm, not the exchange.

Takeaway: Under IFSG Rules and Singapore law, firms must perform enhanced due diligence on potential sanctions matches and strictly adhere to asset-freezing and STRO reporting requirements.

Correct: Under the Securities and Futures (Licensing and Conduct of Business) Regulations, trading members are strictly required to segregate customer moneys and assets from their own proprietary funds. Co-mingling is a serious regulatory breach that compromises customer protection. The immediate priority is to rectify the segregation by moving funds to a trust account and fulfilling the mandatory reporting obligations to the Monetary Authority of Singapore (MAS) regarding the breach of conduct of business rules.

Incorrect: Transferring funds to an operational account or waiting for an audit cycle is incorrect as it fails to address the immediate regulatory violation and risks further misappropriation. Offsetting customer funds against firm liabilities is a direct violation of the trust status of customer assets and constitutes a serious breach of the Securities and Futures Act. Requesting customer consent to continue co-mingling is invalid because the statutory requirement for segregation is a mandatory regulatory standard that cannot be waived by private agreement between the member and the client.

Takeaway: Trading members must maintain strict segregation of customer funds in designated trust accounts to comply with the Securities and Futures (Licensing and Conduct of Business) Regulations and ensure customer asset protection.

Correct: Under the Securities and Futures Act (SFA) and ICE Futures Singapore Rules, wash sales occur when there is no change in beneficial ownership of the contracts traded. Such actions are prohibited as they create a false or misleading appearance of active trading or market price. The correct regulatory response is to stop the activity and fulfill reporting obligations to the Monetary Authority of Singapore (MAS) and the Exchange.

Incorrect: Implementing a time delay does not change the fact that there is no change in beneficial ownership, which is the core element of a wash sale under Singapore law. Executing loss-generating trades with third parties is an attempt to mask previous misconduct and could be seen as further market manipulation. Reclassifying trades as internal entries after they have been executed on the exchange is a violation of reporting integrity and does not absolve the firm of the initial wash sale violation.

Takeaway: In Singapore, any trade that results in no change in beneficial ownership is strictly prohibited as a wash sale, and suspected violations must be reported to MAS and the relevant Exchange immediately to maintain market integrity.

Correct: Under the Securities and Futures Act (SFA), an Approved Exchange (AE) in Singapore is required to submit to the MAS, within 3 months after the end of its financial year, its audited financial statements, a report on its activities during that year, and a report on its compliance with the SFA and its own business rules. This comprehensive reporting ensures that the MAS can effectively supervise the exchange’s financial stability and regulatory adherence.

Incorrect: The suggestion that only trading volumes and member lists are required quarterly is incorrect because the annual requirement is much broader and includes audited financials. Reporting to the SGX is incorrect as the MAS is the statutory regulator for AEs, and the timeline for annual reporting is 3 months, not 6. Financial statements are a mandatory annual requirement under the SFA, not an ad-hoc request, and a report on activities and SFA compliance is also essential.

Takeaway: Approved Exchanges must submit audited financial statements and compliance reports to the MAS within three months of the financial year-end to maintain regulatory transparency.

Correct: Under ICE Futures Singapore Rules and the conduct of business standards aligned with the Securities and Futures Act (SFA), Trading Members are required to give priority to client orders. This means a Member cannot trade for its own account (proprietary/house account) if it has an unexecuted client order at the same price or a price that would be more favorable to the client. This rule is fundamental to maintaining market integrity and ensuring that the interests of the client are placed above those of the firm.

Incorrect: The approach suggesting notification within 24 hours is incorrect because disclosure does not waive the fundamental requirement of order priority. The approach regarding aggregation is incorrect because, while aggregation is sometimes permitted between clients, prioritizing a house order through aggregation without ensuring the client’s priority is a violation of conduct rules. The approach regarding automated systems is incorrect because the timing of a firm’s internal decision-making or system initiation does not override the legal obligation to prioritize a received client order.

Takeaway: Trading Members must always prioritize the execution of client orders over proprietary orders for the same contract to ensure fair dealing and compliance with ICE Futures Singapore Rules.

Correct: Under the Securities and Futures Act (SFA) and the associated Guidelines on Risk Management Practices, capital markets services licensees in Singapore are required to identify, manage, and disclose conflicts of interest. When MAS issues an information request, the firm has a statutory obligation to be transparent. Disclosing the executive’s dual role is essential for MAS to assess whether the conflict influenced market integrity or resulted in unfair advantages, which is a core concern of the SFA’s regulatory framework for derivatives trading on approved exchanges like ICE Futures Singapore.

Incorrect: The suggestion to prioritize exchange-level confidentiality over a MAS inquiry is incorrect because MAS’s statutory powers under the SFA override private or exchange-level confidentiality agreements. Seeking clearance from the exchange before responding to the regulator is inappropriate as it delays regulatory supervision and misinterprets the hierarchy of authority. Handling the conflict internally without disclosure is a failure of transparency and violates the firm’s duty to cooperate fully with the regulator in maintaining a fair and efficient market.

Takeaway: The SFA requires full transparency and the proactive management of conflicts of interest when dealing with MAS inquiries to ensure the integrity of derivatives trading on Singaporean exchanges.

Correct: Under ICE Futures Singapore Rules and MAS guidelines on algorithmic trading, Participants are responsible for ensuring that their trading systems do not engage in manipulative practices or create unfair advantages. This includes having rigorous controls to manage conflicts of interest, ensuring that proprietary trading does not disadvantage client orders (avoiding front-running), and maintaining a clear audit trail of the algorithm’s decision-making process.

Incorrect: Option b is incorrect because a one-time certification is insufficient; ongoing monitoring and specific conflict mitigation are required. Option c is incorrect because providing liquidity does not justify the unfair prioritization of house trades over client trades, which is a breach of conduct. Option d is incorrect because while third-party tools can be used, the ultimate regulatory responsibility for monitoring and compliance remains with the Participant and cannot be fully outsourced.

Takeaway: Participants must maintain direct oversight and implement specific controls within their algorithmic systems to prevent conflicts of interest and ensure fair treatment of client orders.

Correct: Under the Securities and Futures Act (SFA), an entity classified as an Approved Exchange (AE), such as ICE Futures Singapore, has a statutory obligation to manage its business in a way that prioritizes the public interest and the maintenance of a fair, efficient, and transparent market. If a conflict arises between these regulatory duties and the exchange’s own commercial or profit-driven interests, the SFA mandates that the public and market interests must prevail.

Incorrect: Prioritizing shareholder interests over the public interest is a violation of the regulatory standards set for an Approved Exchange under the SFA. Referring decisions to the Singapore Exchange (SGX) is incorrect because SGX is a separate commercial entity and competitor, not a superior regulatory body for ICE Futures Singapore; oversight is provided by the Monetary Authority of Singapore (MAS). Suspending all trading for any potential conflict is an extreme and impractical measure that would disrupt market stability; instead, the exchange must have robust governance frameworks to resolve such conflicts in favor of the market.

Takeaway: As an Approved Exchange under the SFA, ICE Futures Singapore is legally required to prioritize market integrity and the public interest over its own commercial goals.

Correct: Under the ICE Futures Singapore (IFSG) Rulebook, Trading Members are held strictly accountable for the conduct of their personnel. The rules specify that any act or omission by a director, officer, or employee of a Trading Member that would constitute a breach of the rules if committed by the Member itself will be treated as a breach by the Member. This ensures that firms maintain robust internal controls and oversight over all staff members to uphold market integrity.

Incorrect: Limiting liability to registered traders or active trading sessions is incorrect because the Rulebook governs the general conduct of the firm and its staff beyond just the execution of trades. The requirement for senior management authorization is a misconception; a firm is responsible for the actions of its employees regardless of whether management specifically sanctioned the breach. While firms may use external providers for support, they cannot delegate their ultimate regulatory responsibility or liability for compliance with the IFSG Rulebook to a third party.

Takeaway: Trading Members are fully responsible for the compliance of all their directors, officers, and employees with the IFSG Rulebook at all times.

Correct: In Singapore, the Monetary Authority of Singapore (MAS) Guidelines on Outsourcing and the Securities and Futures Act (SFA) emphasize that a regulated entity remains responsible for its regulatory obligations even when functions are outsourced. For ICE Futures Singapore (IFSG), specific rules like the 15-minute reporting window for Block Trades are mandatory. Therefore, the insurer must actively monitor the service provider to ensure these specific exchange rules are met to mitigate operational and regulatory risks.

Incorrect: Relying solely on a provider’s internal reports without independent verification is insufficient for high-risk functions like trade registration. Indemnity clauses do not absolve a regulated entity of its duty to comply with exchange rules or MAS regulations. Trade registration delays are not minor; they impact market transparency and integrity, and focusing only on cybersecurity ignores the critical operational requirement of timely reporting mandated by IFSG.

Takeaway: Regulated entities in Singapore must maintain active oversight of outsourced trade registration to ensure strict adherence to IFSG reporting timelines and regulatory standards.

Correct: In accordance with ICE Futures Singapore Rules and the regulatory environment governed by the Monetary Authority of Singapore (MAS), a Compliance Officer must have the necessary authority and independence from the front-office or trading functions. This independence is crucial to avoid conflicts of interest. Furthermore, the Exchange requires notification of such appointments to ensure the individual is fit and proper to carry out regulatory responsibilities.

Incorrect: The suggestion that a Compliance Officer can hold a concurrent senior trading role is incorrect as it creates a significant conflict of interest. The requirement for a Compliance Officer applies to all member firms to ensure adherence to the Securities and Futures Act (SFA), not just Clearing Members. While firms may use external advisors, the ultimate responsibility for compliance and the requirement for an internal point of accountability cannot be fully delegated to a third party.

Takeaway: A Compliance Officer at an ICE Futures Singapore member firm must maintain functional independence from trading activities and be formally recognized by the Exchange to ensure robust regulatory oversight.

Correct: In accordance with the Securities and Futures Act (SFA) and the ICE Futures Singapore Rules, Trading Members are required to maintain comprehensive records of all transactions and orders (including those that were not executed) for a minimum period of five years. These records must be kept in a way that allows for prompt retrieval and ensures that the data cannot be altered, providing a reliable audit trail for compliance and dispute resolution purposes.

Incorrect: The suggestion that only executed transactions need to be kept is incorrect because the audit trail must include all order instructions to monitor for market abuse or execution errors. A three-year retention period is insufficient as Singapore regulations generally mandate five years for financial records. While digital records are standard, requiring only physical formats is outdated and not a regulatory mandate. Order entry timestamps are a critical component of the audit trail and must be preserved for the full five-year period, not just the current financial year.

Takeaway: Trading Members must retain a complete and unalterable audit trail of all orders and transactions for at least five years to meet Singapore regulatory and Exchange requirements.

Correct: Under ICE Futures Singapore rules, all EFRP transactions must be supported by a bona fide related position. The Trading Participant is responsible for ensuring that a complete audit trail, including documentation that identifies the quantity and price of the related position, is maintained. If an issue is identified, the participant must act promptly to secure the required records to demonstrate the legitimacy of the transaction to the Exchange and relevant authorities.

Incorrect: Modifying the futures price to compensate for documentation issues is a violation of price transparency and exchange rules. Waiting for an MAS inspection is a failure of proactive compliance and record-keeping duties. Voiding a trade internally and re-executing without following Exchange protocols for trade cancellations or corrections undermines market integrity and violates reporting requirements.

Takeaway: Trading Participants must maintain contemporaneous and detailed documentation for the related position in an EFRP to satisfy ICE Futures Singapore audit trail and compliance requirements.

Correct: According to the MAS Guidelines on Outsourcing, the Board and Senior Management of a financial institution are ultimately responsible for any outsourced functions. The FI must perform rigorous due diligence and ensure that the outsourcing agreement includes clauses that allow the FI, its internal and external auditors, and MAS to have access to and audit the service provider’s operations and records related to the outsourced activity.

Incorrect: Approach X is incorrect because an FI cannot delegate its regulatory responsibility to a third party, regardless of the provider’s reputation. Approach C is incorrect because MAS generally does not require pre-approval for all outsourcing arrangements, though it does require notification for material ones and the maintenance of an outsourcing register. Approach D is incorrect because the MAS Guidelines apply to all financial institutions in Singapore regardless of whether the service provider is regulated by MAS; the focus is on the risk to the FI’s operations.

Takeaway: The Board and Senior Management of a Singapore financial institution retain ultimate responsibility for outsourced functions and must ensure contractual rights to audit and access information are secured.

Correct: According to the ICE Futures Singapore Rules, the Exchange has the power to summarily suspend a Member if they fail to meet membership criteria or financial requirements. This is executed through a written notice to the Member, and the suspension takes effect immediately upon delivery or at the specific time designated by the Exchange to protect the integrity of the market.

Incorrect: Providing a mandatory 14-day grace period is incorrect as summary suspensions are designed for immediate risk mitigation. Requiring a High Court order is not a procedural requirement under the Exchange Rules for membership suspension, as the Exchange operates as a self-regulatory organization under the Securities and Futures Act. A secret ballot among other members is not part of the disciplinary or administrative process for suspending a member for financial non-compliance.

Takeaway: ICE Futures Singapore can summarily suspend a Member via written notice with immediate effect to mitigate financial risks and maintain market integrity.

Correct: According to the Securities and Futures Act (SFA) and the rules governing ICE Futures Singapore and ICE Clear Singapore, Clearing Members are under a strict obligation to maintain minimum financial requirements. If a member’s financial resources fall below the prescribed minimum, they must immediately notify the Exchange and the Monetary Authority of Singapore (MAS) in writing. This immediate disclosure is critical for the clearing house to assess the systemic risk and take necessary protective measures, such as restricting the member’s positions or requiring additional collateral.

Incorrect: The suggestion of a three-business-day window is incorrect as regulatory capital breaches require immediate reporting to ensure market integrity. The idea that notification is only required if the deficiency exceeds a certain percentage or duration is a misconception; any breach of the absolute minimum threshold triggers an immediate reporting duty. Delaying notification until a quarterly filing is a violation of the continuous disclosure and reporting obligations mandated by Singapore’s financial regulations and Exchange rules.

Takeaway: Clearing Members must provide immediate written notification to both the Exchange and MAS if their financial resources fall below the mandatory minimum requirements set by Singapore regulations and Exchange rules.

Correct: Under Section 197 of the Securities and Futures Act (SFA), false trading and market rigging occur when a person creates, or does anything that is intended to create, a false or misleading appearance of active trading in any futures contract. Transactions that involve no change in beneficial ownership (often called wash sales) are specifically cited as examples of conduct that creates such a misleading appearance, regardless of whether a profit was made or the settlement price was affected.

Incorrect: The suggestion that intent to influence settlement price is the only factor is incorrect because the SFA focuses on the creation of a misleading appearance of market activity. The claim that only licensed representatives can commit market manipulation is false; the SFA provisions apply to any ‘person’. Finally, characterizing wash sales as a mere administrative reporting error is incorrect as these actions are serious market misconduct offenses under Singapore law.

Takeaway: Under the Securities and Futures Act, creating a misleading appearance of active trading through transactions with no change in beneficial ownership is a prohibited form of false trading.

Correct: Under the Securities and Futures Act (SFA), an Approved Exchange (AE) such as ICE Futures Singapore has a statutory obligation to ensure, as far as is reasonably practicable, that the market it operates is fair, orderly, and transparent. This includes maintaining robust surveillance and enforcement mechanisms to prevent market abuse, such as wash trading (trades with no change in beneficial ownership), which can create a false or misleading appearance of market depth or liquidity.

Incorrect: The suggestion that the exchange is only responsible for price manipulation is incorrect as the SFA mandates broader market integrity, including the prevention of misleading appearances of trading volume. There is no regulatory exemption for wash trading based on system testing; such activities must be conducted in non-production environments or via approved testing protocols that do not mislead the market. Transparency obligations are a core requirement of the SFA and are not waived for institutional participants to hide trading strategies, as this would undermine the ‘transparent’ requirement of the market.

Takeaway: Approved Exchanges in Singapore have a legal duty under the SFA to maintain market integrity by preventing manipulative practices like wash trading that distort market transparency.

Correct: According to the ICE Futures Singapore Rules and the regulatory framework in Singapore, an applicant for Trading Membership must be a body corporate. Additionally, since dealing in futures is a regulated activity under the Securities and Futures Act (SFA), the entity must generally hold a Capital Markets Services (CMS) License issued by the Monetary Authority of Singapore (MAS) for dealing in capital markets products that are futures contracts, unless they fall under a specific exemption provided in the SFA.

Incorrect: The requirement for membership is restricted to corporate entities, making partnerships or sole proprietorships ineligible. Membership in other exchanges like the Singapore Exchange (SGX) is not a prerequisite for admission to ICE Futures Singapore, as they are separate entities. While financial requirements exist, they do not waive the necessity of holding the appropriate MAS license or meeting the specific fitness and propriety standards required by the Exchange.

Takeaway: To become a Trading Member of ICE Futures Singapore, an entity must be a corporation and typically must hold a valid CMS License for dealing in futures contracts under the SFA.

Correct: According to IFSG Rule 208 (Notification of Changes), a Member is strictly required to provide prior written notice to the Exchange of any proposed change in the Control of the Member. This regulatory requirement ensures that the Exchange can evaluate the ongoing suitability and financial standing of the Member under the new control structure to maintain market integrity.

Incorrect: Restricting notification only to changes in the Board of Directors is incorrect because the rule specifically targets the ‘Control’ of the Member, which includes shareholding and voting power. Providing notice 14 days after the event is completed is a violation of the rule, which mandates ‘prior’ notice. Being a member of another exchange does not grant an exemption from the specific membership rules and notification requirements of ICE Futures Singapore.

Takeaway: Members of ICE Futures Singapore are legally obligated to provide prior written notice to the Exchange for any proposed change in control to ensure continuous compliance with membership criteria.

Correct: Automated trade surveillance is the most effective control because it provides proactive detection of wash sales (trades with no change in beneficial ownership) and pre-arranged trading. Under the Securities and Futures Act (SFA) and ICE Futures Singapore rules, these practices are prohibited because they create a false or misleading appearance of active trading or market price. Automated systems can detect matching buy and sell orders from the same entity in real-time or near real-time, which is essential for maintaining market integrity.

Incorrect: Manual disclosures are insufficient as they are reactive and rely on the self-reporting of the violator. Relying on the clearing house to net off trades is a post-trade administrative function and does not prevent the market distortion caused by the initial execution of a wash sale. Pre-negotiating all orders privately is a direct violation of the prohibition against pre-arranged trading, as trades must generally be exposed to the central limit order book to ensure fair price discovery, unless they qualify under specific, strictly regulated exceptions like Block Trades.

Takeaway: To comply with Singapore’s SFA and exchange rules, firms must use proactive automated surveillance to detect and prevent wash sales and pre-arranged trades that undermine market transparency.

Correct: Under Section 19 of the Securities and Futures Act (SFA), an Approved Exchange in Singapore is required to submit its audited financial statements (including the profit and loss account and balance sheet) and a report on how it has discharged its functions and duties during the financial year to the MAS. This must be done within three months of the end of the financial year, unless an extension is granted.

Incorrect: The requirement for cybersecurity logs and CISO certification, while important for internal risk management, is not the primary statutory annual report defined under the SFA for Approved Exchanges. Reporting retail investor lists and capital gains is a matter for tax authorities or specific AML/CFT reporting, not the annual regulatory report to MAS. Disciplinary action reporting is mandatory but the SFA requires a report on the discharge of all duties annually, not just a quarterly breakdown based on a revenue threshold.

Takeaway: Approved Exchanges in Singapore must submit audited financial statements and a regulatory compliance report to MAS within three months of their financial year-end.

Correct: Under the Securities and Futures (Licensing and Conduct of Business) Regulations, a Capital Markets Services licensee must ensure that customer moneys are deposited into a segregated trust account with a specified financial institution, such as a licensed bank in Singapore, no later than the business day following the receipt of the money. Additionally, the regulations require trading members to give priority to customer orders over their own house trades to ensure fair dealing and prevent conflicts of interest.

Incorrect: Maintaining customer funds in an operational account is a violation of the segregation requirements under the SF(LCB)R, which are designed to protect client assets from the firm’s insolvency. Prioritizing house trades over customer orders during volatility is a breach of the ‘customer priority’ rule. Transferring assets offshore to avoid local regulatory standards or using waivers to bypass the Securities and Futures Act is prohibited and undermines the regulatory framework established by the Monetary Authority of Singapore.

Takeaway: Trading members must strictly comply with the SF(LCB)R by segregating customer assets in trust accounts and ensuring customer orders always take precedence over house trades to maintain market integrity and investor protection in Singapore’s financial markets.