RES 3 – Rules, Ethics and Skills for Fund Management Set Two

Correct: According to the ICE Futures Singapore (IFSG) Rules regarding the Electronic Trading System, specifically Rule 404 on the Security of User IDs, a Member must ensure that User IDs are used only by the individual to whom they are issued. Sharing a User ID or password with another person, even for monitoring purposes and even if no trades are executed, is a direct violation of the security protocols intended to maintain the integrity and audit trail of the trading system.

Incorrect: The claim that no violation occurred because no trades were executed is incorrect because the breach lies in the unauthorized access and the sharing of personal security credentials, not just the act of trading. The suggestion that remaining in the building or being available by phone mitigates the breach is incorrect as User IDs are strictly non-transferable. Characterizing the sharing of credentials as a minor administrative lapse is incorrect because the Exchange views the security of the electronic trading system as a fundamental requirement for market integrity.

Takeaway: User IDs for the ICE Futures Singapore electronic trading system are strictly personal and must never be shared with any other individual, regardless of the duration or the intent of the access.

Correct: Under ICE Futures Singapore Rules, Participants are responsible for all orders submitted through their systems, including those generated by algorithms. They are required to conduct thorough testing in non-production environments to ensure the system does not interfere with fair and orderly market operation. Furthermore, each order must be identifiable via a unique ID (such as a Tag 50) to allow the firm to monitor, manage, and immediately ‘kill’ or cancel the algorithm’s orders if it malfunctions or causes market disruption.

Incorrect: Waiting for exchange notification is incorrect because the Participant has a proactive duty to monitor and control their own automated systems. There is no ‘de minimis’ threshold for self-matching or disruptive trading patterns that makes them acceptable. While MAS oversees the broader regulatory framework under the Securities and Futures Act (SFA), the specific operational rules for ICE Futures Singapore require the Participant to maintain control and testing standards rather than submitting source code for prior MAS approval for every deployment.

Takeaway: Participants on ICE Futures Singapore are strictly responsible for the testing, identification, and real-time control of their automated trading systems to maintain market integrity.

Correct: Under the Securities and Futures Act (SFA), an Approved Clearing House (ACH) is typically a corporation incorporated in Singapore. This status subjects the entity to the most stringent level of regulatory oversight by the Monetary Authority of Singapore (MAS). This includes the requirement to maintain robust risk management systems and ensures that their margin models and stress testing frameworks are subject to rigorous validation and ongoing supervision by MAS to ensure financial stability.

Incorrect: The suggestion that an ACH is a foreign-based entity with limited MAS intervention is incorrect; that description more closely aligns with a Recognized Clearing House (RCH). ICE Clear Singapore is a commercial subsidiary of Intercontinental Exchange, not a statutory body or government agency. Furthermore, the SFA does not permit a self-certification regime for ACHs; MAS maintains active oversight and requires clearing houses to meet specific regulatory standards for risk modeling and capital adequacy.

Takeaway: An Approved Clearing House (ACH) under the SFA is a locally incorporated entity subject to the highest level of direct regulatory supervision by MAS, particularly concerning its risk management and margin models.

Correct: Under the Securities and Futures Act (SFA) and the relevant MAS regulations for approved exchanges, the appointment of a Chief Executive Officer and directors of an approved exchange like ICE Futures Singapore requires the prior written approval of the Monetary Authority of Singapore (MAS). MAS assesses these individuals against the Fit and Proper Guidelines to ensure they possess the necessary integrity, competence, and financial soundness to manage the exchange’s operations.

Incorrect: The suggestion that only notification is required after the appointment is incorrect because the SFA mandates prior approval for these critical roles. Attributing approval authority to the Singapore Exchange (SGX) is incorrect as SGX is a separate commercial entity and not the regulator for ICE Futures Singapore. The claim that only the CEO requires approval is false, as the regulatory requirement for prior MAS approval extends to all directors of an approved exchange to ensure robust governance.

Takeaway: The appointment of the CEO and directors of an approved exchange in Singapore requires prior written approval from MAS to ensure they meet fit and proper standards.

Correct: Under the Securities and Futures Act (SFA) and ICE Futures Singapore Rules, Trading Members are required to maintain comprehensive records that allow for the reconstruction of every trade. This includes the original order, any modifications, and the final execution, all with precise timestamps. These records must be retained for a minimum of five years and be readily accessible for regulatory inspection to ensure market integrity and facilitate investigations into potential market abuse.

Incorrect: Relying solely on exchange logs is insufficient as members must maintain their own independent audit trails to verify their internal compliance and client instructions. Purging amendment data after reconciliation violates the requirement to maintain a complete history of the order lifecycle, which is essential for detecting spoofing or layering. While accessibility is key, Singapore regulations do not strictly require exclusive on-site physical storage; electronic and cloud-based storage are permitted provided they meet MAS guidelines for data security and retrieval.

Takeaway: Trading Members must maintain a detailed, time-stamped audit trail of the entire order lifecycle for at least five years to ensure full transaction transparency and regulatory compliance.

Correct: Under Part IX of the Securities and Futures Act (SFA), specifically Sections 218 and 219, the core of an insider trading offense lies in the possession of ‘inside information.’ This is defined as information that is not generally available and, if it were, a reasonable person would expect it to have a material effect on the price or value of the investment. The prosecution must show that the person in possession of such information knew, or ought reasonably to have known, that the information was not generally available and was material. If these conditions are met, trading or procuring others to trade constitutes an offense.

Incorrect: The absence of personal profit is not a valid defense; the SFA prohibits the act of trading or procuring trades while in possession of inside information regardless of who benefits. While Section 218 deals with ‘connected persons,’ Section 219 (the ‘outsider’ provision) ensures that any person in possession of inside information is prohibited from trading, making the specific status of the informant secondary to the nature of the information itself. Using a discretionary account or a junior trader does not provide immunity if the person with the inside information ‘procured’ the trade by giving the instruction to liquidate.

Takeaway: Insider trading liability under the SFA is based on the possession of price-sensitive, non-public information and the awareness of its nature, irrespective of personal gain or official connection to the issuer/exchange.

Correct: According to ICE Futures Singapore (IFSG) rules, Block Trades are negotiated privately outside the central limit order book but must be reported to the Exchange via the ICE Block electronic entry facility. The standard reporting timeframe is within 15 minutes of the trade’s execution. Furthermore, the trade is not officially registered until the Clearing Member(s) for both the buyer and seller have accepted the trade in the system, as they are responsible for the financial performance of the contract.

Incorrect: Reporting via the central limit order book is incorrect because Block Trades are by definition executed off-exchange and then registered. A 30-minute window exceeds the 15-minute requirement for most IFSG products. Manual submission to the Monetary Authority of Singapore (MAS) is incorrect as MAS is the regulator, not the exchange operator, and trade registration occurs through the Exchange’s proprietary systems. Waiting for an end-of-day cycle is incorrect because the Exchange requires prompt reporting to manage market risk and ensure timely clearing.

Takeaway: Block Trades on IFSG must be reported via the ICE Block facility within 15 minutes and require Clearing Member acceptance to be formally registered.

Correct: Under the regulatory framework for ICE Futures Singapore and general MAS guidelines on risk management, a member firm must ensure that its compliance function is independent of the business units it monitors. Appointing the Head of Trading as the Compliance Officer creates a significant conflict of interest, as the individual would be responsible for overseeing their own trading activities and revenue targets. Independence ensures that the Compliance Officer can objectively assess risks and enforce Exchange Rules without commercial pressure.

Incorrect: While seniority is important, there is no specific requirement for a Compliance Officer to be a member of the Board of Directors or to have the power to veto every individual trade. Requiring ten years of CMS licensing is an arbitrary threshold not specified in the ICE Futures Singapore rules, which focus more on fitness, propriety, and competence. There is no requirement for a Compliance Officer to be physically located at the Exchange’s premises; they must be accessible and effective within the member firm’s own structure.

Takeaway: To maintain regulatory integrity at ICE Futures Singapore, the Compliance Officer must remain independent from the firm’s trading and settlement functions to avoid conflicts of interest.

Correct: Under the Securities and Futures Act (SFA), the Monetary Authority of Singapore (MAS) classifies market operators as either Approved Exchanges (AE) or Recognized Market Operators (RMO). ICE Futures Singapore is an AE, which represents the higher tier of regulation. This classification is applied to exchanges that are deemed systemically important to Singapore’s financial system or those that serve retail investors, requiring them to adhere to the highest standards of transparency, governance, and risk management.

Incorrect: The suggestion that an AE has lower capital requirements is incorrect, as AEs generally face more rigorous financial and resource requirements than RMOs. The claim that an AE is exempt from submitting business rules to MAS is false; AEs must ensure their rules are approved or notified to MAS to maintain market integrity. The idea that AE status is used to bypass clearing mandates for OTC derivatives is incorrect, as AE status pertains to the operation of organized markets and actually involves stricter adherence to SFA clearing and trading obligations.

Takeaway: Classification as an Approved Exchange (AE) under the SFA indicates that ICE Futures Singapore operates under the highest level of MAS regulatory supervision due to its systemic importance in Singapore.

Correct: Under the Securities and Futures Act (SFA), MAS has the authority to issue written directions to an approved exchange like ICE Futures Singapore. This power can be exercised if MAS deems it necessary or expedient for the protection of investors, the public interest, or to ensure the proper functioning of the market. This includes directing the exchange on how to maintain, store, and provide access to its records to ensure regulatory oversight is not compromised.

Incorrect: The suggestion that MAS can only act after a proven breach is incorrect because the power is intended to be preventive and supervisory to maintain market integrity. The claim that MAS needs approval from SGX is false as ICE Futures Singapore is an independent approved exchange regulated directly by MAS. The assertion that MAS’s powers are limited only to financial solvency ignores the broad regulatory mandate under the SFA to ensure market integrity and investor protection through operational oversight.

Takeaway: MAS possesses broad statutory powers under the SFA to issue binding directions to ICE Futures Singapore to ensure record-keeping practices support investor protection and market transparency.

Correct: Under the Securities and Futures Act (SFA) and the ICE Futures Singapore Rules, front-running (trading ahead of a client) and bucketing are prohibited practices that undermine market integrity. The best practice and regulatory requirement for an employee who identifies such misconduct is to immediately report it to their firm’s Compliance Officer. This allows the firm to fulfill its legal obligations to investigate and, if necessary, report the breach to the Monetary Authority of Singapore (MAS) and the exchange to maintain a fair and transparent marketplace.

Incorrect: Monitoring the activity for another thirty days is incorrect as it allows the prohibited activity to continue, potentially causing further harm to clients and increasing the firm’s regulatory risk. Advising clients to move their business without reporting the internal breach fails to address the regulatory violation and does not fulfill the firm’s duty to the exchange. Requesting a private justification from the trader is insufficient and inappropriate, as it bypasses formal compliance channels and may lead to the concealment of a regulatory offense.

Takeaway: Suspected market misconduct such as front-running on ICE Futures Singapore must be immediately escalated through formal compliance channels to ensure adherence to the Securities and Futures Act.

Correct: According to ICE Futures Singapore Rules, a Member must maintain the minimum Net Worth as prescribed. If the Net Worth falls below this level, the Member is obligated to provide immediate written notice to the Exchange. Furthermore, the Member is prohibited from entering into new contracts (except to close out existing positions) unless the Exchange grants specific permission to continue.

Incorrect: Notifying the Monetary Authority of Singapore (MAS) within 48 hours is incorrect because the Exchange Rules specifically require immediate notification to the Exchange itself. A five-business-day window is too long for a prudential breach of financial requirements. Automatically suspending all existing positions and transferring them is not the standard regulatory requirement; the primary obligation is notification and the cessation of new contract entries until authorized.

Takeaway: Trading Members must provide immediate written notification to ICE Futures Singapore if their Net Worth falls below the minimum requirement and must cease entering new contracts unless authorized.

Correct: Under the ICE Futures Singapore Rules and the regulatory framework of the Securities and Futures Act (SFA), a Trading Member must demonstrate financial resilience. The most effective control is the combination of maintaining a minimum Net Worth (capital adequacy) and having a formal clearing arrangement with an ICE Clear Singapore Clearing Member. This ensures that every trade executed by the Trading Member is backed by a Clearing Member who is responsible for the settlement and margining process with the clearing house.

Incorrect: Requiring a Board of Singapore citizens is not a standard financial requirement for membership and does not directly mitigate settlement risk. Non-binding letters of intent do not provide the legal or financial certainty required for exchange operations. Relying on historical performance in foreign jurisdictions or mere physical presence (representative office) does not satisfy the specific financial and clearing requirements mandated by ICE Futures Singapore to protect the integrity of the local market.

Takeaway: Admission as a Trading Member of ICE Futures Singapore is contingent upon meeting strict financial net worth standards and securing a robust clearing link to ICE Clear Singapore to manage settlement risk effectively.

Correct: Under the Securities and Futures Act (SFA), market participants are strictly prohibited from engaging in conduct that creates a false or misleading appearance of active trading or the price of derivatives contracts. This is a core component of maintaining a fair, orderly, and transparent market in Singapore. Practices such as entering orders with the intent to cancel them before execution (spoofing) undermine market integrity and are punishable under the SFA.

Incorrect: Circuit breakers are technical safeguards for market stability but do not provide a safe harbor for manipulative trading intent. Internal committee approvals cannot override statutory prohibitions against market manipulation set by Singapore law. While maintaining sufficient margin is a regulatory requirement for financial soundness, it does not satisfy the separate legal obligation to avoid deceptive trading practices that distort market transparency.

Takeaway: The Securities and Futures Act (SFA) prohibits any trading behavior that creates a false or misleading appearance of market activity to ensure market fairness and transparency.

Correct: Section 197 of the Securities and Futures Act (SFA) in Singapore prohibits any person from creating, or doing anything that is intended or likely to create, a false or misleading appearance of active trading in any capital markets products. Transactions involving no change in beneficial ownership (wash trades) are specifically cited as a means of creating such a false appearance, as they mislead other market participants regarding the genuine liquidity and demand for the contract.

Incorrect: The assertion that manipulation only occurs if the settlement price is influenced is incorrect because the SFA also covers the ‘appearance’ of active trading and misleading price signals, not just the final outcome. The claim that false trading is limited to information dissemination is wrong because the SFA explicitly includes trade-based manipulation like wash trades and matched orders. The suggestion that testing execution speed justifies wash trades is incorrect; market participants must use non-trading test environments or methods that do not create misleading market signals to avoid violating market integrity regulations.

Takeaway: Under Singapore’s Securities and Futures Act, creating a misleading appearance of market activity through wash trades is a prohibited form of false trading, even if the price remains stable.

Correct: According to Regulation 21 of the Securities and Futures (Licensing and Conduct of Business) Regulations, a holder of a capital markets services license (such as a trading member) is prohibited from trading for its own account or for an associated person’s account when it has a pending customer order for the same product that could be executed at the same or better price. This ensures that the interests of the customer are prioritized over the firm’s own interests, directly addressing a core conflict of interest in trade execution.

Incorrect: Executing proprietary trades first with a 24-hour notification is a violation of the priority rules. Hedging needs do not grant an exemption to trade ahead of a customer order under the SF(LCB)R. Average price allocation is generally used for aggregating multiple customer orders, but it cannot be used to justify placing a proprietary trade on equal footing with an unexecuted customer order that arrived first.

Takeaway: Under Singapore’s SF(LCB)R, trading members must strictly prioritize customer orders over proprietary or associated accounts to ensure fair dealing and manage conflicts of interest.

Correct: Under the ICE Futures Singapore (IFSG) Rules, Members are required to have internal procedures for the prompt and fair handling of complaints. If a complaint involves a potential breach of the Exchange Rules, the Member has a specific obligation to notify the Exchange in writing without delay. This ensures that the Exchange can investigate potential market misconduct and maintain the integrity of the trading platform.

Incorrect: Waiting for a 30-day resolution period is incorrect because potential rule breaches require immediate notification to the Exchange to protect market integrity. While reporting to MAS is a regulatory requirement under the Securities and Futures Act (SFA), it does not replace the specific obligation to notify the IFSG Exchange under its own Rulebook. While FIDReC handles dispute resolution for retail clients in Singapore, it does not exempt a Member from its reporting obligations to the Exchange regarding rule violations.

Takeaway: IFSG Members must promptly notify the Exchange in writing of any complaint that alleges a potential breach of the Exchange Rules.

Correct: Under ICE Futures Singapore (IFSG) Rules, Participants are strictly responsible for all activity conducted through their connection to the Electronic Trading System. Each individual must be assigned a unique User ID to ensure accountability and a robust audit trail. Sharing User IDs is a violation of security protocols as it prevents the accurate attribution of trades to specific individuals, which is a core requirement for regulatory compliance and market integrity.

Incorrect: The approach of sharing User IDs is incorrect because it compromises the audit trail and violates the requirement for individual accountability. Delegating all security oversight to the Exchange is incorrect because the Participant bears the primary responsibility for controlling access and monitoring their own users’ compliance with IFSG rules. Allowing simultaneous logins on multiple devices without specific authorization typically violates security policies regarding session management and individual user control.

Takeaway: Participants must ensure unique User ID assignment and maintain strict accountability for all orders entered into the IFSG electronic trading system to preserve the audit trail.

Correct: Under ICE Futures Singapore Rules and the Securities and Futures Act (SFA) framework, members are required to give priority to customer orders over their own proprietary trades. Orders must be entered into the trading system in the order they are received (time priority). A member is prohibited from trading for its own account while holding an unexecuted customer order that is executable at the same or better price, as this would constitute front-running.

Incorrect: Prioritizing a house order to test market depth is a violation of the fundamental principle of customer priority. Bundling customer and house orders into a single block trade without specific client consent and adherence to strict block trade rules is generally prohibited and violates the requirement for sequential entry. Internal firm thresholds or discretionary policies cannot override the regulatory mandate that customer orders must take precedence over proprietary trading.

Takeaway: Customer orders must always be executed in the order they are received and must take priority over a firm’s proprietary orders to ensure fair market conduct.

Correct: In accordance with ICE Futures Singapore Rule E.4 (Priority of Orders), a Trading Member is strictly prohibited from buying or selling for its own account, or any account in which it has a direct or indirect interest, if it holds an unexecuted client order that can be executed at the same or a better price. This ensures that the client’s interests are always placed above the firm’s proprietary interests in the marketplace.

Incorrect: Internal compliance waivers cannot override the exchange’s statutory and regulatory rules regarding order priority. Average price allocation is a mechanism for distributing fills among multiple clients fairly but does not permit a firm to compete with a client order for its own house account. Even if a client is an Institutional Investor, the fundamental exchange rules regarding the priority of orders in the central order book must be upheld to maintain market integrity.

Takeaway: Trading Members must always give precedence to client orders over proprietary trades when they can be executed at the same or a more favorable price under ICE Futures Singapore rules.

Correct: According to the MAS Guidelines on Outsourcing, a financial institution (FI) remains fully responsible for its outsourced activities. The board and senior management are expected to retain ultimate accountability. The FI must perform rigorous due diligence and ensure that the outsourcing agreement includes a ‘right to audit’ clause, allowing the FI and MAS to access the provider’s systems and data. Relying solely on a provider’s reputation or self-certification (as in Approach X) is insufficient to meet Singapore’s regulatory standards for risk management.

Incorrect: Approach X is incorrect because an FI cannot delegate its regulatory accountability to a third party, regardless of the provider’s global standing. Approach C is incorrect because material outsourcing actually requires higher levels of scrutiny and risk management, and regulatory liability cannot be transferred to a provider. Approach D is incorrect because MAS does not recognize a ‘substituted compliance’ model for outsourcing; the FI remains under the supervision of MAS for all its regulated activities, including those that are outsourced.

Takeaway: In Singapore, financial institutions remain ultimately accountable for outsourced functions and must maintain direct oversight and audit rights to ensure regulatory compliance.

Correct: ICE Clear Singapore is incorporated in Singapore and has been granted the status of an Approved Clearing House (ACH) by the Monetary Authority of Singapore (MAS) under the Securities and Futures Act (SFA). As an ACH, it is subject to direct and comprehensive supervision by MAS, ensuring it maintains robust risk management frameworks, adequate financial resources, and operational resilience to safeguard the stability of the financial system.

Incorrect: The classification as a Recognised Clearing House (RCH) is incorrect because RCH status is typically reserved for foreign-incorporated clearing houses that are recognized by MAS but primarily regulated by their home country authorities. The suggestion that it is an Exempt Clearing House (ECH) is wrong because ICE Clear Singapore is a central counterparty for a major exchange and must be fully regulated to ensure systemic safety. The classification as a Designated Clearing House under the Payment Systems (Oversight) Act is incorrect as that legislation pertains to payment systems, whereas clearing houses for derivatives are governed by the SFA.

Takeaway: ICE Clear Singapore is classified as an Approved Clearing House (ACH) under the SFA, which subjects it to direct and stringent oversight by the Monetary Authority of Singapore (MAS).

Correct: Under ICE Futures Singapore Rules, Block Trades are privately negotiated transactions that must meet minimum volume thresholds and be reported to the Exchange within a specific timeframe, typically 15 minutes after the trade is concluded. This ensures market transparency. Intentional delays or systemic failures to meet this 15-minute window constitute a breach of Exchange rules and must be addressed and reported to the Exchange’s regulatory oversight body.

Incorrect: The suggestion that the window is 60 minutes is incorrect as the standard requirement is much tighter to maintain price discovery integrity. Delaying reporting until the end of the session for large trades is prohibited as it undermines the transparency of the futures market. Internal logging does not satisfy the regulatory requirement for external reporting to the Exchange’s designated trade reporting system within the 15-minute mandate.

Takeaway: Block trades on ICE Futures Singapore must be reported within 15 minutes of execution to comply with transparency requirements and Exchange regulations.

Correct: Under the ICE Futures Singapore Rulebook, the Exchange has the authority to cancel trades or adjust prices for trades executed outside the No-Cancellation Range (NCR) to maintain market integrity. However, such requests must be made within a very strict timeframe, often within 8 minutes of the trade execution. If the request is made outside this window, the Exchange generally will not intervene unless it is necessary to maintain a fair and orderly market.

Incorrect: The Monetary Authority of Singapore (MAS) does not personally intervene to void individual trade errors; this is the responsibility of the Exchange’s market supervision. Unilateral reversal by a participant is not permitted as it would undermine the finality of clearing and settlement. There is no rule stating that intervention is based on a fixed SGD 100,000 loss threshold or that trades are moved to suspense accounts for weekly settlement; the NCR and timely reporting are the primary mechanisms.

Takeaway: Trade cancellations on ICE Futures Singapore are governed by the No-Cancellation Range (NCR) and require immediate reporting within strict timeframes to ensure market certainty.

Correct: In Singapore, the Rulebook of an approved exchange like ICE Futures Singapore is legally regarded as a contract. Under the Securities and Futures Act (SFA), the rules of an exchange constitute a binding agreement between the exchange and each member, and between each member and every other member. This statutory contract ensures that all participants are bound by the same standards of conduct, clearing obligations, and dispute resolution mechanisms, providing a robust legal basis for the exchange’s operations.

Incorrect: The approach suggesting the Rulebook is a non-binding guideline is incorrect because the SFA specifically gives exchange rules the force of a contract. The approach classifying it as subsidiary legislation is incorrect because, while the SFA provides the regulatory framework, the Rulebook itself functions as a private law contract between market participants. The approach interpreting it as a unilateral declaration is incorrect because the Rulebook is a multilateral contract, and any amendments must follow the procedures set out in the Rulebook and comply with MAS regulatory requirements.

Takeaway: The ICE Futures Singapore Rulebook operates as a legally binding contract between the exchange and its members under the Securities and Futures Act, ensuring enforceable standards for all participants.

Correct: According to Section 12 of the Securities and Futures Act (SFA), an approved exchange (which includes ICE Futures Singapore) is prohibited from appointing a person as its chairman, chief executive officer, or director unless it has obtained the prior written approval of the Monetary Authority of Singapore (MAS). This ensures that individuals in key leadership positions of critical market infrastructure meet the highest standards of integrity and competence.

Incorrect: Post-appointment notification is incorrect because the SFA mandates ‘prior’ written approval for these specific high-level roles in an approved exchange. While internal committees or exchange boards have their own vetting processes, they do not supersede the statutory requirement for MAS approval. The requirement for MAS approval applies to all CEO and Director appointments regardless of the candidate’s nationality or previous registration status under other acts like the Financial Advisers Act.

Takeaway: The appointment of a Chief Executive Officer or Director for an approved exchange in Singapore requires the prior written approval of the Monetary Authority of Singapore (MAS) under the Securities and Futures Act.

Correct: In accordance with the principles of effective risk management and the rules of ICE Futures Singapore, the compliance function must be independent of the business units it is tasked with monitoring. Appointing a Head of Proprietary Trading as a Compliance Officer creates a fundamental conflict of interest, as the individual would be responsible for overseeing their own activities and those of their subordinates, which undermines the integrity of market conduct oversight and the Securities and Futures Act (SFA) requirements.

Incorrect: While professional qualifications and CMFAS modules are necessary, they do not mitigate the structural conflict of interest inherent in a dual-role appointment. Notification or waivers from MAS do not typically allow for the consolidation of front-office and compliance roles in a way that eliminates independence. Time management is a secondary operational concern compared to the primary regulatory requirement for an independent and objective second line of defense.

Takeaway: To ensure effective market conduct oversight, a Compliance Officer at an ICE Futures Singapore member firm must be independent of revenue-generating business units to avoid conflicts of interest.

Correct: Under IFSG rules and standard exchange practices in Singapore, price limits are designed to manage volatility without completely stopping trade. When a price limit is reached, a cooling-off period (often a few minutes) is implemented. If the market pressure persists, the exchange has the authority to widen the price limits in pre-defined increments. This allows the market to continue functioning and discovering the true price while preventing instantaneous, irrational price spikes.

Incorrect: Suspending trading for the entire day is an extreme measure that is generally avoided as it traps liquidity and prevents participants from managing risk. Removing limits entirely during a session would be contrary to the purpose of having circuit breakers and price limits, which is to maintain an orderly market. Restricting trading to liquidation only is a measure typically reserved for emergency situations or contract expiries rather than the standard procedure for managing daily price limit hits.

Takeaway: IFSG utilizes a structured process of cooling-off periods and incremental limit widening to balance market stability with the need for continuous price discovery during volatile periods.

Correct: According to the IFSG Rules, the Exchange has the authority to summarily suspend a Member’s rights. This action can be made effective immediately upon the Exchange providing notice to the Member, especially in circumstances where the Exchange deems it necessary to protect the integrity of the market or the interests of the Exchange itself, such as when a Member fails to meet financial requirements.

Incorrect: Requiring a 14-day consultation period with the Monetary Authority of Singapore would hinder the Exchange’s ability to act swiftly in a crisis. Granting a 30-day grace period is inconsistent with the concept of a ‘summary’ suspension, which is designed for immediate risk mitigation. The decision to suspend a member rests with the Exchange’s governance and regulatory framework rather than a majority vote from other competing Clearing Members.

Takeaway: ICE Futures Singapore retains the right to implement immediate summary suspensions of membership to protect market integrity when a Member fails to comply with critical financial or regulatory standards.

Correct: Under the ICE Futures Singapore (IFSG) Rulebook, Trading Members are under a continuous obligation to comply with all rules and maintain high standards of integrity and professional conduct. If a risk assessment identifies a conflict of interest or a potential breach of conduct rules, the Member must take proactive steps to remediate the issue. Furthermore, the Rulebook requires Members to notify the Exchange of any significant events that impact their fitness, propriety, or ability to comply with the rules at all times.

Incorrect: Deferring reporting until an annual MAS audit is incorrect because IFSG Rulebook obligations are continuous and often require immediate notification to the Exchange for material issues. Setting an arbitrary financial threshold like SGD 2,000 is insufficient because the Rulebook focuses on the principle of market integrity rather than specific dollar amounts. Delegating the compliance decision to an external auditor is not permitted as the Trading Member retains ultimate responsibility for its own compliance with the IFSG Rulebook and cannot outsource its regulatory accountability.

Takeaway: Trading Members must maintain continuous compliance with the IFSG Rulebook and are responsible for taking immediate action and notifying the Exchange of any material threats to their integrity or regulatory standing.