Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), if a person based in Singapore commits insider trading by dealing in securities (both equity and debt) of a company listed on the Australian Securities Exchange (ASX), he commits an insider trading offense under the SFA.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), the SGX-ST Rules generally do not apply to a person licensed to provide advice on corporate finance under the SFA unless it is also a Trading Member that is approved by and registered with the SGX-ST in accordance with the SGX-ST Rules.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), the severity of the fines and imprisonment term reflects how serious the authorities are in deterring market misconduct and ensuring personal liability for any persons breaching the laws on market conduct.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), the Securities and Futures Act (SFA)and the Singapore Exchange Limited (SGX)spell out the prohibited market conduct as:-

(a) False Trading and Market Rigging Transactions.
(b) Securities Market Manipulation.
(c) Dissemination of False or Misleading Statements and Information.
(d) Fraudulently Inducing Persons to Deal in Securities.
(e) Employment of Manipulative and Deceptive Devices.
(f) Dissemination of Information about Illegal Transactions.
(g) Securities Hawking.
(h) Insider Trading.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), false trading and market rigging transactions include:-

(a) Creating or engaging in any course of conduct that creates a false or misleading appearance of active trading on any securities.
(b) Buying and selling any securities that do not involve a change in beneficial ownership of those securities in order to maintain, change or cause fluctuations in the market price of the securities.
(c) Doing anything that creates or is likely to create a false or misleading appearance of active trading or with respect to the market for or the price of securities if the person is reckless as to whether doing that act would so create or be so likely to create.
(d) Creating or engaging in any course of conduct that creates a false or misleading appearance with respect to the market for, or the price of, any securities.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), many devices have been used to rig trades and create a false market but the more common devices are:-

(a) Buying and selling without a change in beneficial ownership or commonly known as “wash sale” or “wash trade”.
(b) Matching orders which are specifically spelled out in SFA Section 197(3)(b) and (c).

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), there is no change in the beneficial ownership of equity or debt securities owned by a person when he transfers the title of his securities to a company that is solely owned and controlled by him.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), a “wash sale” or “wash trade” is a transaction effected through the market which involves no change in the beneficial ownership of any securities.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), matching orders involve the entering of an order for the purchase of securities through a broker with the knowledge that a sales order for the same amount or price has been entered or will be entered into at about the same time by another party known to him through a different broker. The purpose of such orders is to create a false or misleading impression of active trading in the securities or the market for, or the price of, the securities.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), matching orders involve the entering of an order for the purchase of securities through a broker with the knowledge that a sales order for the same amount or price has been entered or will be entered into at about the same time by another party known to him through a different broker. The purpose of such orders is to create a false or misleading impression of active trading in the securities or the market for, or the price of, the securities.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), any person who is guilty of an offense under the Securities and Futures Act (SFA) Division 1, Part XII will be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 7 years or to both.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), an offense under the Singapore Exchange Securities Trading Limited (SGX-ST)-ST Rule 13.8.3 may be compounded with a fine. The penalty will be dependent on factors such as the number of prior violations, and whether the offender is a Trading Member, Approved Executive Director or Trading Representative.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), under the Singapore Exchange Securities Trading Limited (SGX-ST) Rules, Trading Members and Trading Representatives are not allowed to enter a buy or sell order if there is an existing opposite order from the same Trading Member or Trading Representative in the same security, unless:-

(a) The orders are for different beneficial owners.
(b) The order is a type expressly permitted by SGX-ST as having a legitimate commercial reason and which is unlikely to create a false market.
(c) The Trading Member or Trading Representative can establish that the purpose for which the order was made was not to create a false market.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), market manipulation happens when a person executes trades using his account and the accounts of a number of his clients to trade at prices above the previous traded price which has the effect of artificially maintaining or increasing the price of the security.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), the dissemination of information or making of statements that are false or misleading in a material particular that is likely to:-

(a) Induce the subscription of securities by other persons.
(b) Induce the sale or purchase of securities by other persons.
(c) Raise, lower, maintain or stabilize the market price of securities.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), CMS license holders or their representatives should not make or publish any statement, forecast or promise that has the effect of changing, maintaining or stabilizing the market price of securities when they know that the information supporting their statement, forecast or promise is false or misleading. They may also be liable if they are reckless in making, publishing or disseminating the false or misleading statement, forecast or promise, for example, when they publish a false statement that was sent to them by an anonymous person, without verifying the source or veracity of the statement.

Under The Securities and Futures Act (SFA) Section 201, it is an offense for any person to directly or indirectly, in connection with the subscription, sale or purchase of any securities to:-

(a) Employ any device, scheme or artifice to defraud.
(b) Engage in any act, practice or course of business that operates as a fraud or deception, upon any person.
(c) Make any statement he knows to be false in a material particular.
(d) Omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), Securities hawking refers to making an offer of securities in an unsolicited meeting. The securities hawking prohibition aims to prevent pressure selling of financial products to retail clients (e.g. “boiler room” practices, badgering).

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), any person who is guilty of the securities hawking offense will be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 6 months or to both and, in the case of a second or subsequent offense, to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 12 months or to both.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), any person who is guilty of the securities hawking offense will be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 6 months or to both and, in the case of a second or subsequent offense, to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 12 months or to both.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), non-public price-sensitive information or “inside information” is information that is not generally available and if it were generally available, might have a material effect on the price or value of the securities.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), an employee of an entity advising on corporate finance deals in securities/bonds of a listed company which plans to list one of its subsidiaries on the SGX-ST. The employee commits an insider trading offense if he deals in the securities/bonds of the listed company before the information about the listing of the listed company’s subsidiaries is announced to the public.

Under the Securities and Futures Act (SFA), a person commits insider trading on the following conditions:-

(a) Subscribes for, purchases or sells, or enters into an agreement to subscribe for, purchase or sell any securities (“deals in securities”) or procures another person to deal in any securities.
(b) Whilst in possession of non-public price-sensitive information (“inside information”).
(c) If he is a “connected person”, he knows or ought reasonably to know that the information is non-public and price-sensitive.
(d) If he is an “unconnected person”, he knows that the information is non-public and price-sensitive.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), a financial institution has an internal “Chinese Wall” policy which ensures that its employees in various business units (like, the trading team, corporate finance team, investment management team, etc.) do not share information obtained in the course of their work and appreciate the importance of maintaining the confidentiality of such information.

Pursuant to the Market Conduct in the Capital Markets and Finance advisory services (CMFAS), the insider trading provisions do not prevent a person with inside information from:-

(a) Entering into an underwriting agreement or sub-underwriting agreement.
(b) Dealing in securities under an underwriting agreement or sub-underwriting agreement.
(c) Communicating information to another person solely for the purpose of procuring the latter to enter into an underwriting or a sub-underwriting agreement or dealing in such securities under the underwriting agreement.

Pursuant to the Prevention of Financial Crimes in the Capital Markets and Finance advisory services (CMFAS), when a person has contravened the market misconduct provisions in the SFA, he may be liable for:-

(a) Criminal sanctions.
(b) Civil penalties.
(c) Civil liabilities from claims by investors.

Pursuant to the Prevention of Financial Crimes in the Capital Markets and Finance advisory services (CMFAS), financial crime is a wide and complex term that involves a range of criminal offenses. The main financial crimes that impact financial institutions and systems most and are on regulators’ radar screens are:-

(a) Money Laundering.
(b) Terrorism Financing.
(c) Embargoes and Sanctions.
(d) Fraud.

Pursuant to the Prevention of Financial Crimes in the Capital Markets and Finance advisory services (CMFAS), there are generally three steps in the process of money laundering:-

(a) The Placement stage refers to the physical disposal of benefits for criminal conduct. These are placed with licensed deposit-taking companies like banks and finance companies.
(b) The Layering stage refers to the separation of benefits of criminal conduct from their sources by creating layers of financial transactions designed to disguise the audit trail. Criminals may buy luxury or high-value goods from genuine suppliers, resell them to unknowing customers and then place the legitimate funds back in the bank as payments by cheque or wire transfers.
(c) The Integration stage refers to the provision of apparent legitimacy to the benefits of criminal conduct. If the layering succeeds, the integration schemes place the laundered funds back into the financial system, making them appear as legitimate business funds.

Pursuant to the Prevention of Financial Crimes in the Capital Markets and Finance advisory services (CMFAS), there are generally three steps in the process of money laundering:-

(a) The Placement stage refers to the physical disposal of benefits for criminal conduct. These are placed with licensed deposit-taking companies like banks and finance companies.
(b) The Layering stage refers to the separation of benefits of criminal conduct from their sources by creating layers of financial transactions designed to disguise the audit trail. Criminals may buy luxury or high-value goods from genuine suppliers, resell them to unknowing customers and then place the legitimate funds back in the bank as payments by cheque or wire transfers.
(c) The Integration stage refers to the provision of apparent legitimacy to the benefits of criminal conduct. If the layering succeeds, the integration schemes place the laundered funds back into the financial system, making them appear as legitimate business funds.

Pursuant to the Prevention of Financial Crimes in the Capital Markets and Finance advisory services (CMFAS), there are generally three steps in the process of money laundering:-

(a) The Placement stage refers to the physical disposal of benefits for criminal conduct. These are placed with licensed deposit-taking companies like banks and finance companies.
(b) The Layering stage refers to the separation of benefits of criminal conduct from their sources by creating layers of financial transactions designed to disguise the audit trail. Criminals may buy luxury or high-value goods from genuine suppliers, resell them to unknowing customers and then place the legitimate funds back in the bank as payments by cheque or wire transfers.
(c) The Integration stage refers to the provision of apparent legitimacy to the benefits of criminal conduct. If the layering succeeds, the integration schemes place the laundered funds back into the financial system, making them appear as legitimate business funds.