For meeting the responsibility of the customer resulting from any dealing in shares, investing in futures contracts, or leveraged foreign exchange trading by the owners of the asset to the customer; passing the asset to any entity or account in compliance with the written orders of the customer; lending of securities; mortgaging, charging, to make a deposit in compliance with Regulation 30; or to make a payment approved by statute, he’s allowed to do so.

This implies that the provisions have extraterritorial scope. If the act is considered being wrongdoing in Singapore, and if the transactions take place outside Singapore, it will still be deemed to be misconduct. Similarly, regarding shares listed or cited on the securities exchange in Singapore, the rules extend to activities arising outside Singapore.

Instead of allowing normal market forces to prevail, we can define fraudulent selling and market rigging as the use of artificial means or strategies to manipulate the price of some shares or to trigger uncertainty without a factual basis in the market. Such behavior is illegal and strict sanctions, reputational consequences, and probably a suspension or revocation of the permit will be enforced on any CMS license holder or delegate who commits such offenses.

False Trading involves the attempt to produce an illusion of successful trade in any securities; the acquisition and selling of any securities that do not include a change in the beneficial ownership of such securities to cause volatility in the stock price of the securities on the market; and the creation of transactions designed to offer a false appearance regarding the securities.

The intended result is to establish the illusion of aggressive trade in the stock of Company D. A wash selling is a market-based deal that entails no alteration in the beneficial ownership of any shares. SFA Section 197(5)3 specifies that if an individual who had an interest in shares prior to the purchase or sale continues to have an interest in securities after the buying or selling, there is no shift in the beneficial ownership of the asset.

It is a violation to persuade another person to trade with securities by making or publishing any assertion, pledge, or prediction that he knows is dishonest; any fraudulent concealment of material facts; any dubious claim or forecast made or published; or capturing or storing information in or by electronic or another system that is known to be deceptive.

Use of Manipulative and Fraudulent Devices: Individual Y demonstrated that he has little intention of executing his order by withdrawing the purchasing orders. His true aim is to allow the opening price of the market at 9 am to be at a desirable amount for him to meet his purchase order at $3.35, resulting in a benefit for himself.

Much as they prohibit it to use coercive devices because they establish artificial market trends, they also prohibit it to disseminate knowledge about illegal transactions. This is to keep those who have some knowledge from taking advantage of the subsequent price fluctuations and gaining from them. To discourage unacceptable activities, this is really a “blackout law”.

SFA Section 202 makes it an offence to circulate, disseminate, or authorise, or be concerned in the circulation or dissemination of any statement or information to the effect that the price of any securities of a company or a business trust will, or is likely, to rise or fall or be maintained as a result of an illegal transaction.

Insider information is information that is not publicly accessible that is expected to have a material impact on the pricing or the valuation of shares if it is known. If the information is going to affect people who normally engage in securities in determining whether to purchase, subscribe or sell the securities, it would incline a rational person to expect information to have a material impact.

In the case of a non-connected person (‘tippee’), it must be shown that the person understood that the knowledge in his hands was not widely accessible and price sensitive. A tippee is distinguished from a related insider in that a tippee does not have to be linked to the business he knows price-sensitive information about.

A person is linked to a company if he/she is an agent of the company or in a related company; is a significant shareholder in that corporation or in a linked corporation; holds a role that can be presumed to allow them access to price-sensitive data because of some business arrangement with them and that particular corporation, or is an officer of a significant shareholder in that corporation.

First, a tippee does not have to be linked to the business about which he knows price-sensitive data; second, it is essential for a linked insider to prove that they should have fairly known that they had information that is not widely accessible and that is price-sensitive unlike a tippee; third, there is also a difference in the presumption of evidence against the connected insider in that if it is seen that he/she has classified price-sensitive information, it would be assumed that he/she understood that the information was not widely accessible and that it was price-sensitive unless proven otherwise.

A tippee must not be the one who collects information from an informant, directly or indirectly; have an agreement or connection with the insider; and be mindful that the insider himself is prohibited from dealing. Everything that is needed is that the price-sensitive information must be possessed by the tippee and that he/she must ensure that the data is not widely accessible and price-sensitive. Where the data comes from is not important.

Securities hawking refers to making a bid in an unsolicited meeting for securities. The worker is engaged in the hawking of securities if he has not received the approval of the client or has not asked if the customer is interested in listening to the sales pitch before addressing the customer.

This provision does not extend to offers made for shares which do not require a prospectus, such as offers made to investment firms and approved investors. The securities hawking ban attempts to avoid pressure on retail consumers to market financial goods.

Short Selling is the offering, at the time of the sale, of shares that the seller does not own. At the time of the offering, in ‘covered’ short selling, the trader has lent the securities or otherwise arranged to perform his responsibility to supply the securities. In ‘uncovered’ short selling, the trader is not in possession of shares at the time of the sale or has not otherwise made plans to perform his duty of supply.

The rationale for short selling is because the individual expects that the price of a security will drop, so it first sells the security, believing that after the price has decreased to make a profit from the sale, he or she will purchase the shares back at a cheaper price later. It ensures that price formation is more effective, improves market liquidity, and encourages the management of risk and the production of hedging activities.

Central Depository (Pte) Limited (CDP) buys securities on behalf of vendors that do not hold delivery securities on the day of settlement. When the CDP carries out the buy-in, the vendor who fails to supply the securities is mandated to pay the cost of purchase plus an extra penalty.

If the holder of the CMS license borrows from the owner of the shares, the holder of the CMS license must guarantee that up to 100% of the market value of the securities lent is insured. Similarly, whenever the issuer of the CMS license lends shares, including those belonging to its clients, the creditor must get collateral for up to 100% of the market value of the bonds lent.

The violations of market misconduct are criminal and bear substantial fines of up to S$250,000 or imprisonment of 7 years or both. A CMS license holder and its affiliates must disclose any suspicion of attempted market fraud, false selling, or insider trading promptly to SGX-ST.

Such civil penalties can be more than either an amount not greater than 3 times the amount of benefit the plaintiff has received or the amount of damages he has avoided as a result of the violation or an amount equal to $50,000 if he is not a company or $100,000 if he is a company.

The person who can bring such a civil suit is one who has entered into trades of the same nature simultaneously with the commission of the offense; and who has incurred market damages because of the consequences of the violation.

The Central Provident Fund (CPF) pension plan intended to be a retirement savings scheme. The government, however, made some compromises in May 1986 and amended the CPF Act to encourage CPF members to use part of their ordinary account (OA) investments to invest in permitted investment items in order to maximize the value of their assets by the time they retire.

For investments made under CPFIS-OA but not needed for CPFIS-SA, a CPF Investment Account is required. Under CPFIS-OA, deposits can only be taken with the Ordinary Account Savings funds of the participants, while Special Account Contributions can only be used with CPFIS-SA investments. The categories of goods approved under CPFIS-OA and CPFIS-SA for investment are also distinct.

Just the funds over $20,000/- will be deposited in the ordinary account and $40,000 in the special account. A participant may, however, continue to support his or her regular premium insurance policies (but not annual single premium insurance policies or regular unit trust savings plans).

A CPF Investment Account is an account established with a CPFIS agent bank to promote the settlement of the investment sales and acquisitions of a member and to keep a record of its investment portfolios and deposits through its CPF Investment Account.

The agent banks of the CPFIS are approved by the Board of the CPF and are one of three local banks, i.e. Oversea-Chinese Banking Corporation Ltd (‘OCBC’), United Overseas Bank Ltd (‘UOB’), and DBS Bank Ltd (‘DBS’). The agent banks are selected by the CPF Board to facilitate the investment and settlement of stocks and bonds issued on the Singapore Exchange through their comprehensive branch network and services.

A member of the CPF who is at least 18 years old, is not an undischarged bankrupt and has more than $20,000 in his or her ordinary account (for CPFIS-OA investment) and/or more than $40,000 in his/her special account (for CPFIS-SA investment) is permitted to join in the CPFIS.

Members can hold only one CPF Investment Account at a time. To check his/her CPF account number, a participant would need to carry his/her identification card and some of his/her CPF statements to the agent bank. Via mycpf Online Facilities, he or she can view his or her statement at http://www.cpf.gov.sg using his or her SingPass.