Electronic trading systems are one of the trading avenues we offer to our valued clients. While we strive to make your trading as rewarding as possible, we would also like to take this opportunity to provide you with some information and guidance that are associated with E-trading. One important aspect to be aware of is certain trading practices that would possibly be deemed as offences under the Securities and Futures Act (“SFA”) and Futures Trading Rules.

The relevant laws and rules are set out in Appendix 1 for your reference.

You will appreciate that in order to make best use of the trading system it is necessary to have a good understanding of the various features and functionalities available. The “Price and Quantity setting” feature, for example, protects you from erroneously executing trades through the setting of parameters in the trading system. Do refer to the user guide we have sent to you to help you better understand the system. If you need assistance, feel free to call our Helpdesk.

Electronic trading relies heavily on hardware and connectivity. Having a good understanding of the characteristics, limitations and risks associated with such mode of trading will enable you to better manage certain situations that may arise. You may refer to Appendix 2 or the section on electronic trading in our agreement.

You may wish to visit the various Exchanges’ website to familiarize yourself with the contracts specifications which offer crucial information pertaining to a contract, such as contract size, tick value and last trading day.

Appendix 1
Securities and Futures Act (“SFA”) and Futures Trading Rules

SFA s197 : False trading No person shall create, or do anything that is intended or likely to create, a false or misleading appearance of active trading in any futures contract on a futures market or in connection with leveraged foreign exchange trading, or a false or misleading appearance with respect to the market for, or the price of futures contracts on a futures market or foreign exchange in connection with leveraged foreign exchange trading.

SFA s208 : Manipulation of price of futures contract and cornering No person shall, directly or indirectly – (a) manipulate or attempt to manipulate the price of a futures contract that may be dealt in on a futures market, or of any commodity which is the subject of such futures contract; or (b) corner, or attempt to corner, any commodity which is the subject of a futures contract.

SFA s209 : Fraudulently inducing persons to trade in futures contracts

1. No person shall –
   (a) by making or publishing any statement, promise or forecast that he knows or ought reasonably to have known to be false, misleading or deceptive; (b) by any dishonest concealment of material facts; (c) by the reckless making or publishing of any statement, promise or forecast that is false, misleading or deceptive; or (d) by recording or storing in, or by means of, any mechanical, electronic or other device information that he knows to be false or misleading in a material particular, induce or attempt to induce another person to trade in a futures contract or engage in leveraged foreign exchange trading
2. In any proceedings against a person for a contravention of subsection (1) constituted by recording or storing information as mentioned in subsection (1) (d), it is a defence if it is established that, at the time when the defendant so recorded or stored the information, he had no reasonable grounds for expecting that the information would be available to any other person

SFA s210 : Employment of fraudulent or deceptive devices, etc. No person shall, directly or indirectly, in connection with any transaction involving trading in a futures contract or leveraged foreign exchange trading –
(a) employ any device, scheme or artifice to defraud; (b) engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person; (c) make any false statement of a material fact; or (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.

SFA s211: Dissemination of information about illegal transactions No person shall circulate, disseminate, or authorise, or be concerned in the circulation or dissemination of, any statement or information to the effect that the price of a class of futures contracts or foreign exchange in connection with leveraged foreign exchange trading will, or is likely to, rise or fall or be maintained because of the market operations of one or more persons which, to his knowledge, are conducted in contravention of section 206, 207, 208, 209 or 210 if –
(a) the person, or a person associated with the person, has conducted such market operations; or (b) the person, or a person associated with the person, has received, or expects to receive, directly or indirectly, any consideration or benefit for circulating or disseminating, or authorising or being concerned in the circulation or dissemination, the statement or information.

SGX-DT Rule 3.4.1: Market Manipulation A Member, Approved Trader or Registered Representative shall not manipulate or attempt to manipulate the price of a contract or of any underlying, or corner, or attempt to corner, any underlying.

SGX-DT Rule 3.4.2: Churning A Member, Approved Trader or Registered Representative is prohibited from churning or generating commissions through creating excessive transactions in a Customer’s Account.

SGX-DT Rule: 3.4.3 False Trading, Bucketing, Fraudulent Inducement to Trade and Employment of Fraudulent Device A Member, Approved Trader or Registered Representative shall not:

1. engage in, or knowingly act with any other Person in, any act or practice that will or is likely to create a false or misleading appearance of active trading in any contract or a false or misleading appearance with respect to the price of any contract;
2. knowingly execute, or hold out as having executed, an order for the purchase or sale of a contract, without having effected a bona fide purchase or sale of the contract in accordance with this Rules;
3. induce or attempt to induce another person to trade in a contract:
   (i) by making or publishing any statement, promise or forecast that it knows or ought reasonably to know to be false, misleading or deceptive; (ii) by any dishonest concealment of material facts; (iii) by the reckless making or publishing of any statement, promise or forecast that is false, misleading or deceptive; or (iv) by recording or storing in any mechanical, electronic or other device information that is knowingly false or materially misleading; or
4. directly or indirectly in connection with any trading in a contract:
   (i) employ any device, scheme or artifice to defraud; (ii) engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception upon any Person; (iii) make any false statement of a material fact; or (iv) omit to state a material fact necessary in order to make any statements made, in the light of the circumstances under which they were made, not misleading. In the course of your trading, do be mindful of the said prohibited trading practices as any person who contravenes any of the above provisions shall be guilty of an offence and shall be liable to a fine not exceeding $250,000 or to imprisonment not exceeding 7 years, or to both.

Appendix 2

Potential limitations and risks of online trading, which includes but not limited to the following:

1. Possibility of delays in order transmission and confirmation of order execution, and what to do in case of such delays;
2. not being able to withdraw erroneous orders in time due to the speed of electronic trading; and
3. danger of unauthorised access to a Customer’s online account and non-compliance of recommended preventive security measures in relation to matters such as the protection of passwords and leaving an online screen unattended.
4. Exposed to risks associated with systems including the failure of hardware and software, resulting in orders either not executed according to instructions or not executed at all.