Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), it is a criminal offence known as ‘tipping-off’ to disclose to any person information that is likely to prejudice an investigation. Informing a client that they are under suspicion or that a Suspicious Transaction Report (STR) is being considered or has been filed constitutes tipping-off. Therefore, the representative must not reveal the nature of the internal review. The firm’s obligation, upon forming a reasonable suspicion, is to proceed with its internal investigation and file an STR with the Commercial Affairs Department’s (CAD) Suspicious Transaction Reporting Office (STRO) promptly, and in any case, within 15 business days. A copy of the STR should also be furnished to the Monetary Authority of Singapore (MAS). The firm must handle the client inquiry in a way that does not alert them to the suspicion, while internally continuing the due diligence and reporting process as required by MAS Notice SFA04-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism.

According to the SGX-DT trading rules, certain contracts may have alternative trade matching algorithms in place to enhance market liquidity and reward specific participants. One such algorithm is the Market Maker (MM) Allocation. This rule grants designated Market Makers priority for a specified portion of an incoming order at a particular price level, even if their order was entered later than other orders at the same price. This allocation serves as an incentive for Market Makers who are obligated to provide continuous two-way quotes. After the Market Maker’s allocated quantity is filled, the remaining portion of the incoming order is then matched against other resting orders based on the prevailing priority rule for that contract, which is typically Price/Time priority. Therefore, the Market Maker’s order receives its designated share first, overriding the standard time priority of the earlier order.

According to the Securities and Futures (Licensing and Conduct of Business) Regulations, specifically Regulation 40, a Member is generally required to send monthly statements to its customers. However, there are exemptions. One exemption is if there has been no change to the customer’s account in that month. Another exemption allows an Accredited Investor (AI) to waive their right to receive monthly statements in writing. In this scenario, the firm was correct not to send a monthly statement for March because the account was inactive. However, the regulations also stipulate that if a monthly statement has not been sent for the last month of a calendar quarter (i.e., March, June, September, or December), the Member must send a quarterly statement to the customer. The AI’s waiver applies to the routine monthly statements, but it does not override the separate regulatory requirement for a consolidated quarterly statement when the final month’s statement of that quarter is not issued. Therefore, despite the inactivity in March and the AI’s waiver, the firm is obligated to provide a quarterly statement covering the period to ensure the client receives a periodic summary of their account.

According to SGX Futures Trading Rules (specifically Rule 3.3.17 and 3.3.19), the requirement to submit a Form BC4A for sub-accounts depends on the nature of the omnibus account. For a ‘disclosed’ omnibus account, which is held in a customer’s name, the Member must submit a Form BC4A for each underlying sub-account. However, for an ‘undisclosed’ omnibus account, which is a proprietary account belonging to the Member firm itself and used for temporary warehousing of positions before allocation, a Form BC4A is not required for the sub-accounts, provided these sub-accounts are not used for position reporting or for clearing trades with the Exchange. The other options are incorrect because the requirement for BC4A submission for a disclosed omnibus account is not waived by the client’s institutional status or the provision of other documents. Similarly, the timing of trade allocation or the type of client (like an SGX-ST representative) does not eliminate the fundamental reporting obligation for the accounts.

According to SGX Futures Trading Rule 2.1.2A, when a Member permits its customer to delegate Sponsored Access, the Member is ultimately responsible for having measures in place to ensure the person receiving the delegated access meets specific criteria. These criteria are that the person must either be regulated by a recognised regulatory authority or be a related corporation of another SGX Member to whom the access is being delegated. The Member cannot absolve itself of this responsibility by shifting it to the customer. The obligation extends beyond simply registering the initial customer; it encompasses the entire chain of access. The Member must ensure that all parties accessing the market via its connection, whether directly or through delegation, adhere to the required standards, including the status of the end-user.

According to SGX Futures Trading Rules, specifically concerning Session State Orders (SSOs), the priority of orders in the order book is determined by specific principles. A standard resting order that is already in the order book before a new session state begins will always have a higher priority than any SSO that is triggered upon the commencement of that new session, even if the SSO was submitted to the system earlier. Among multiple SSOs triggered at the same time for the same price, their relative priority is determined by the time they were originally entered into the system (time priority). In this scenario, Trader B’s standard limit order was already a resting order in the book during the ‘Open’ session. The SSOs from Trader A and Trader C were only triggered and entered into the active order book when the ‘Pre-Close’ session began. Therefore, Trader B’s order maintains its higher priority. Between the two SSOs, Trader A’s order was submitted at 10:00 AM, earlier than Trader C’s order at 2:00 PM. Consequently, Trader A’s triggered order will be placed in the queue ahead of Trader C’s. The final priority sequence is Trader B, followed by Trader A, and then Trader C.

According to SGX-DT regulations concerning give-up arrangements, if an executed trade is not successfully accepted by the designated accepting Clearing Member by the end of the trading day following the trade date (T+1), the executing Member has a specific obligation. The executing Member must transfer the trade to a house account specifically designated for unsuccessful give-up trades. This ensures proper segregation and tracking of such positions. The executing Member is then responsible for regularly reviewing this account and taking action to clear the positions. Cancelling a validly executed trade is not the correct procedure. Holding the trade in the client’s account indefinitely is also incorrect as the rule mandates a transfer by the end of T+1. Commingling the trade with the firm’s general house or proprietary account is improper; a separate, designated account must be used for this purpose.

This question tests the understanding of the specific requirements for a written agreement between a Capital Markets Services (CMS) licence holder (the Member) and a custodian, as stipulated under the Securities and Futures (Licensing and Conduct of Business) Regulations, specifically SFR(LCB) 32. The correct answer outlines a core requirement of this ‘Custody Agreement’. The agreement must explicitly state that the custodian will hold and record the assets based on the Member’s instructions, that the records must clearly identify the assets as belonging to the Member’s customers, and that these assets must be segregated from any assets belonging to the Member or the custodian itself. This ensures a clear legal and operational separation of client assets, protecting them in case of insolvency of either the Member or the custodian. The other options describe obligations that, while related to custody, are not part of the required terms for the agreement between the Member and the custodian. The disclosure of the Member’s liability in case of custodian default and the statement about commingled assets are requirements for the ‘Customer Agreement’ between the Member and its client under SFR(LCB) 31. The requirement for the custodian to provide its business continuity plan, while a prudent due diligence step, is not a specifically mandated term within the custody agreement under SFR(LCB) 32.

Under the international regulatory framework of Basel III, which has been adopted by the Monetary Authority of Singapore (MAS), exposures to a central counterparty (CCP) are subject to specific capital requirements. When a CCP is designated as a Qualifying Central Counterparty (QCCP), it signifies that it adheres to high international standards for risk management, such as the Principles for Financial Market Infrastructures (PFMI). Consequently, clearing members of a QCCP are permitted to apply a significantly lower risk weight to their exposures to the CCP. These exposures include both their trade exposures and their contributions to the CCP’s default fund. This preferential capital treatment directly reduces the amount of regulatory capital a member firm must hold against its clearing activities, making it a more capital-efficient operation. SGX-DC’s status as a QCCP is therefore a primary financial and regulatory advantage for its direct members. The other options are incorrect as QCCP status does not grant priority in trade execution, eliminate fundamental risk management practices like margining, or give individual members control over the rule-making process, which is governed by the SGX-DC Clearing Rules for all members.

Based on SGX Futures Trading Rule 3.3.14 concerning Inter-Exchange Cross Margining, a fundamental requirement is that the long and short positions must be held within accounts at the same Trading Member. The rule explicitly states that inter-exchange cross-margining is not permitted for positions carried in customer accounts opened with different Members. Therefore, even if the contract is eligible and the positions are on approved exchanges, the fact that they are split between Trading Member Alpha and Trading Member Beta disqualifies the client from receiving a margin credit. The other conditions, such as contract eligibility and having the necessary contractual agreements with the client, are also crucial, but the prohibition on using different members is an overriding factor that makes the request non-compliant from the outset.

According to SGX Futures Trading Rule 4.1.18 on the Accumulation of Positions, the exchange aggregates all positions that are owned or controlled by a person, or persons acting together, to ensure compliance with position limits. The primary goal is to prevent market manipulation and manage concentration risk. In this scenario, Mr. Tan’s total position is calculated by combining several holdings. The positions in the funds he manages are included because he directly controls their trading decisions. His personal account is aggregated as it is directly owned by him. The joint account is also included because he has a proprietary or beneficial interest in it. Crucially, the positions held by Ms. Lee must also be aggregated with Mr. Tan’s. The rule specifies that positions of any other persons ‘acting together’ with the person in question are to be combined. Their informal agreement and coordinated trading activities constitute ‘acting together’, irrespective of whether a formal written contract exists. Therefore, all these positions must be summed up to determine if Mr. Tan has breached the contract’s position limits.

The designation of serious tax crimes as money laundering predicate offences, effective from 1 July 2013 under the Income Tax Act (e.g., Section 96) and the GST Act (e.g., Section 62), has a significant implication for financial institutions. It means that if a financial institution, such as a CMS licence holder, has reason to suspect that a client’s funds are the proceeds of tax evasion, it must treat this situation as a potential money laundering activity. Consequently, the institution is obligated to apply its full suite of Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) measures as stipulated in the relevant MAS Notices. This includes conducting rigorous customer due diligence (CDD), and where necessary, enhanced due diligence (EDD), to understand the source of funds and wealth. If the suspicion persists after the review, the institution must file a Suspicious Transaction Report (STR) with the Suspicious Transaction Reporting Office (STRO). The obligation is triggered by suspicion, not by a formal conviction or charge. Directly reporting to the Inland Revenue Authority of Singapore (IRAS) is not the prescribed AML/CFT reporting channel for a financial institution, and advising the client on rectifying their tax affairs could be construed as tipping-off, which is a serious offence.

The detailed explanation for this question is that the scenario describes a situation where the Singapore Exchange (SGX) is pragmatically directing its supervisory and oversight resources towards areas that present the highest potential risk. By intensifying surveillance on firms trading new, complex instruments, SGX is applying a risk-based approach to regulation. This aligns directly with the Guiding Principle of Risk-Based Targeting of Regulatory Activities, which states that supervisory activities are tailored according to risk profiles, and resources are allocated to matters posing the greatest risks to market integrity and clearing safety. While Comprehensive Risk Management is a broader principle concerning the overall framework for managing all risks, the specific action of prioritising surveillance based on product complexity is a direct application of risk-based targeting. Disclosure-Based Regulation is incorrect as it pertains to ensuring issuers provide timely and fair information to the market, not the supervision of trading members. A Balanced Approach to International Best Practice is also incorrect as the scenario does not involve comparing or adapting global standards to local conditions.

According to SGX Futures Trading Rules, the priority of orders in the book is determined by price, and then by time. A critical distinction exists for Session State Orders (SSOs). A standard limit order that is already resting in the order book will always have a higher priority than an SSO-triggered order at the same price level, regardless of when the SSO was initially submitted. In this scenario, Trader B’s standard limit order was entered at 11:00 AM and was resting in the order book before the Pre-Close session began. Therefore, it has the highest priority. Among multiple SSOs triggered at the same time for the same price, priority is determined by their original time of entry. Trader A entered their SSO at 9:30 AM, which is earlier than Trader C’s SSO entry at 2:00 PM. Consequently, Trader A’s triggered order will have priority over Trader C’s. The final queue in the order book at the price of $2,150 will be Trader B’s order, followed by Trader A’s order, and finally Trader C’s order.

This question assesses the specific regulatory obligations of a Capital Markets Services (CMS) licence holder after a client has successfully passed a Customer Knowledge Assessment (CKA) for an unlisted Specified Investment Product (SIP). According to the Monetary Authority of Singapore (MAS) guidelines, even when a client is assessed to possess the requisite knowledge and experience (i.e., a positive CKA outcome), the firm is not absolved of all duties. The firm must proactively offer to provide financial advice concerning that specific unlisted SIP. If the client chooses to decline this offer, the firm must follow a strict documentation procedure. This includes documenting the client’s decision in writing, explicitly highlighting to the client that the responsibility for ensuring the product’s suitability now rests entirely with them, and obtaining a written confirmation from the client that they wish to proceed without receiving advice. This process ensures that the client makes an informed decision about refusing advice and understands the implications. The other options are incorrect because obtaining senior management approval is a general requirement for opening the account, not the immediate next step after a positive CKA assessment regarding a transaction. Providing a general risk statement about derivatives is a requirement for clients who fail the Customer Account Review (CAR), not for those who pass a CKA. Simply proceeding with the transaction ignores the mandatory step of offering advice.

Under the international regulatory framework for banks, Basel III, exposures to central counterparties (CCPs) are subject to specific capital requirements. When a CCP achieves the status of a Qualifying Central Counterparty (QCCP), it signifies that it adheres to high regulatory standards, such as the Principles for Financial Market Infrastructures (PFMI). This recognition allows its clearing members to receive more favourable capital treatment. Specifically, members can apply a significantly lower risk weight to their trade exposures (i.e., positions cleared through the QCCP) and their contributions to the QCCP’s default fund. A lower risk weight directly reduces the amount of regulatory capital a firm must hold against these exposures, thereby lowering its capital costs and freeing up capital for other business purposes. While operational efficiencies and robust clearing rules are features of a well-run CCP, the primary financial advantage conferred by the QCCP designation is the reduction in regulatory capital requirements.

The core of this question tests the understanding that SGX-DT can apply different trade matching algorithms to different contracts to achieve specific market objectives, as outlined in SGX Futures Trading Rule 4.1.6. The default and most common algorithm is Price/Time Priority, where the best price is matched first, and for orders at the same price, the earliest order gets precedence. This explains the execution behavior observed in the equity index futures. However, for certain markets, such as those with low volatility like interest rate futures, SGX-DT may use a Pro-Rata algorithm. This algorithm is specifically designed to promote liquidity and market depth by allocating incoming trades proportionally among all resting orders at the same price level, based on their volume contribution. This prevents a single large order from blocking all subsequent orders, allowing multiple participants to get their orders filled, which is the phenomenon observed in the interest rate futures contract. The other options are incorrect because there is no indication of a specific Market Maker status granting priority, the system does not inherently favor smaller orders but rather allocates proportionally, and the execution difference is due to a specific matching algorithm, not a general regulatory mandate on execution speed.

The core issue in this scenario is that the series of transactions lacks a clear economic rationale or investment purpose. The client is not attempting to generate a profit but is instead moving a large sum of money into the securities market and then quickly moving it out. This is a classic example of ‘layering’ in money laundering, where the goal is to obscure the origin of illicit funds by passing them through legitimate financial systems. This aligns with the principle outlined in MAS Notice SFA 04-N02, which flags the ‘buying and selling of a security with no discernible purpose or in circumstances which appear unusual’ as a suspicious activity. The other options describe contributing factors but do not capture the primary red flag. A sudden shift in activity (dormancy to active) is a flag, but the nature of the activity is more critical. Overseas transfers are common and not inherently suspicious on their own. Interpreting the minimal profit as poor investment judgment misses the likely intent, which is not profit-seeking but fund movement.

The SGX-DT Error Trade Policy, as outlined in SGX Futures Trading Regulatory Notice 4.1.8, explicitly states that certain types of trades are not eligible for review, cancellation, or price adjustment. Among these excluded trades are ‘strategy trades’. A Butterfly Spread is a classic example of a strategy trade, which involves the simultaneous purchase and sale of multiple contracts to form a single position. Because the transaction in question is a Butterfly Spread, it falls under this exclusion. Therefore, regardless of how erroneous the price of one leg may seem, the exchange will determine that the trade is ineligible for consideration under the Error Trade Policy. The other options describe procedures for eligible trades, such as using the opening price for non-designated contracts or calculating a theoretical price for designated futures, but these are irrelevant once a trade is identified as an ineligible strategy trade.

This question assesses the understanding of the strict operational requirements for handling customer funds as stipulated by the Securities and Futures (Licensing and Conduct of Business) Regulations (SFR(LCB)). According to Regulation 37 of the SFR(LCB), a Trading Member is mandated to perform a computation at least once every day. This daily computation must include the total amount of customer moneys and assets in trust and custody accounts, the total amount required to be deposited, and the Member’s own residual interest in these accounts. A critical part of this rule is the deadline: the computation for a business day must be completed before noon of the subsequent business day. In the scenario, Alpha Futures violated this rule on two fronts. Firstly, completing Monday’s computation at 3:00 PM on Tuesday is a clear breach of the ‘before noon’ deadline. Secondly, calculating the firm’s residual interest only on a weekly basis contravenes the requirement for it to be part of the daily computation. The other options are incorrect because the minimum record-keeping period is five years, not seven. While failing to calculate residual interest daily is a component of the breach, the primary failure encompasses both this and the missed deadline. Lastly, describing this as a minor, compoundable error is inaccurate; breaches of customer asset protection rules under SFA Section 104 and 104A are treated as serious offences with significant penalties.

The situation described is a classic example of ‘churning’. According to SGX Futures Trading Rule 3.4.2, churning is the practice of executing a high volume of trades for a customer’s account with the primary intention of generating commissions for the representative or the firm, rather than serving the client’s investment objectives. The key elements are the excessive frequency of trading and the representative’s self-serving motive, which disregards the client’s best interests. Overtrading, under Rule 3.4.10, refers specifically to executing trades beyond limits imposed by the sponsoring Clearing Member, SGX, or MAS, and intent is not a required element for the offense. Pre-arranged trading involves two parties agreeing to a trade outside the central order book, which is different from a representative advising a client. Knowingly taking advantage of an error relates to exploiting system malfunctions, which is not depicted in the scenario.

The scenario presents multiple high-risk factors that, under the MAS Notice SFA 04-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism, mandate the application of Enhanced Due Diligence (EDD). These factors include the client being from a high-risk jurisdiction, the involvement of Politically Exposed Persons (PEPs) as Ultimate Beneficial Owners (UBOs), and a questionable source of funds via a high-risk correspondent bank. The standard procedure is not to immediately reject the client or file a Suspicious Transaction Report (STR) without first conducting a thorough risk assessment. The purpose of EDD is to gather sufficient information to understand the nature of the business relationship, the client’s source of wealth and funds, and to make an informed, risk-based decision. This process explicitly requires obtaining approval from senior management before establishing the relationship and committing to intensified ongoing monitoring if the relationship is accepted. Filing an STR is only required once the firm forms a suspicion that a transaction may be linked to financial crime, which typically occurs after due diligence efforts fail to mitigate the identified risks. Simply limiting transactions is an inadequate control measure for such a high-risk profile.

According to SGX Futures Trading Rule 3.3.21, a Trading Member that carries an omnibus account must ensure the omnibus account holder discloses the gross long and short positions for each contract. If the omnibus account holder fails to make this disclosure, the rule explicitly requires the Trading Member to immediately notify SGX-DT of this failure. Furthermore, the Member must promptly comply with any and all orders or instructions subsequently issued by SGX-DT. Reporting net positions is incorrect as it violates the requirement for gross position disclosure. Suspending the account is a potential risk management action by the firm but not the primary regulatory step mandated by the exchange. Applying for a special ID is a separate procedure related to sub-account anonymity and does not resolve the immediate failure to disclose the account’s overall gross positions.

According to the MAS Notice SFA04-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism, a Capital Markets Services (CMS) licence holder is generally required to take reasonable measures to identify the Ultimate Beneficial Owners (UBOs) of its customers. However, there are specific exemptions. One such exemption applies to investment vehicles where the manager is a financial institution supervised by the MAS. This is because the fund manager is already subject to stringent AML/CFT regulations and supervision by the MAS, providing a layer of regulatory oversight. In contrast, a company with a complex ownership structure involving offshore shell corporations presents a high risk and would necessitate enhanced due to diligence to pierce the corporate veil and identify the UBOs. Similarly, a private foundation, especially one with international funding, requires scrutiny to understand its control structure and the source of its wealth. Importantly, while remittance businesses are financial institutions licensed by the MAS, the guidelines specifically exclude holders of a money-changer’s or remittance licence from the general exemption granted to other MAS-supervised financial institutions for the purpose of UBO identification.

According to the SGX Futures Trading Rules (specifically, the principles outlined in Rule 3.3.15), when a trade execution error occurs and the client does not accept a cash or credit adjustment, the Trading Member has the option to accede to the client’s request to honor the originally instructed price. If the Member chooses this path, it is mandatory to issue a contract note to the client that clearly discloses both the price confirmed to the client and the actual price at which the error trade was executed. Furthermore, the Member must maintain comprehensive internal records documenting the error, its review, and the approval process by authorized personnel. These instances must also be reported to SGX on a weekly basis. The other options are incorrect. The Member is not obligated to cancel the trade via the exchange’s formal error trade policy as a first step; resolution with the client is prioritized. The Member is not restricted to only offering a cash settlement; they have the discretion to honor the client’s request. Finally, while the trade is transferred to a house account, the primary reporting obligation in this specific context is to SGX, not directly to the Monetary Authority of Singapore (MAS) for this type of client-facing error resolution.

The correct answer is based on the requirements for a Custody Agreement as stipulated in the Securities and Futures (Licensing and Conduct of Business) Regulations (SFR(LCB) 32). This regulation mandates that before a Member places customer assets with a custodian, there must be a written agreement between the Member and the custodian. A key provision of this agreement is that the custodian must agree to hold and record the assets in a manner that clearly identifies them as belonging to the Member’s customers and ensures they are kept separate from any assets belonging to the Member or the custodian itself. This segregation is a fundamental principle of client asset protection. The other options describe requirements that are part of the Customer Agreement (SFR(LCB) 31), which is the agreement between the Member and its own customer, not the agreement between the Member and the custodian. For instance, detailing fees and arrangements for receiving customer instructions are disclosures made to the customer. The option regarding a general lien is incorrect because SFR(LCB) 32 explicitly restricts the custodian’s ability to claim a lien over customer assets, permitting it only under very specific circumstances, such as for agreed-upon administrative charges and with the customer’s prior written consent.

Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), there is a strict legal obligation to report any knowledge or suspicion of money laundering to the Suspicious Transaction Reporting Office (STRO) as soon as reasonably practicable. Delaying a report, as suggested by the manager, constitutes a failure to report, which is an offence. Furthermore, the manager’s intention to ‘have a quiet word’ with the client is a clear case of ‘tipping-off’. Tipping-off, which involves disclosing information that could prejudice an investigation, is a serious offence with severe penalties, including fines and imprisonment. A CMS licence holder is required to establish a robust internal control framework, which includes a designated central point of referral (such as a Money Laundering Reporting Officer or Head of Compliance) for handling STRs. The correct procedure in this scenario is for the analyst to circumvent the compromised manager and escalate the issue internally to this designated officer. This ensures the firm meets its reporting obligations without delay and addresses the serious internal misconduct, while also protecting the analyst from personal liability for complicity in either the failure to report or tipping-off.

This question tests the application of the SGX-DT order matching algorithms, specifically the combination of Price Point Maker (PPM) and Pro-Rata allocation. The process involves two distinct stages. First, the PPM allocation is calculated. Order A is granted PPM status because it was the first to improve the best bid price from $210 to $211. The PPM allocation is set at 30% of the incoming order. Therefore, Order A is first allocated 30% of the 80-lot sell order, which is 0.30 * 80 = 24 lots. Second, the remaining quantity of the sell order is allocated using the Pro-Rata algorithm. After the PPM allocation, the incoming sell order has 80 – 24 = 56 lots remaining. The resting buy orders now have the following quantities: Order A has 50 – 24 = 26 lots remaining, and Order B still has 70 lots. The total volume at the $211 price level for the pro-rata calculation is 26 + 70 = 96 lots. Order A’s pro-rata share is calculated based on its proportion of the remaining volume at that price level: (26 / 96) * 56 lots ≈ 15.17 lots. Following typical exchange rounding conventions where fractions are handled systematically (often rounding up for smaller portions or to the nearest integer), let’s assume rounding to the nearest whole number, which is 15 lots. Finally, the total allocation for Order A is the sum of its PPM allocation and its Pro-Rata allocation: 24 lots (PPM) + 15 lots (Pro-Rata) = 39 lots. This demonstrates a comprehensive understanding of the two-tiered allocation mechanism designed to reward liquidity providers while ensuring fair distribution among other orders at the same price.

According to SGX-DT rules governing give-up arrangements, when a trade executed by one Member is not accepted by the designated Clearing Member by the end of the trading day following the trade date (T+1), the Executing Member bears the responsibility. The prescribed procedure is for the Executing Member to transfer the trade into a specifically designated house account for unsuccessful give-up trades. This ensures the position is properly managed and segregated while the issue is being resolved. The Executing Member is then required to conduct regular reviews to clear this account. Reversing the trade is not the mandated immediate action, leaving it in the client’s account is improper as the clearing arrangement has failed, and reporting to the exchange for resolution is not the first procedural step for managing the position itself.

Under the SGX-DT Market Error Trade Policy (SGX Futures Trading Regulatory Notice 4.1.8), SGX retains full discretion when reviewing an error trade. The decision to cancel or adjust a trade is not automatic and is based on a holistic assessment of several factors. These factors include, but are not limited to, the market conditions prevailing at the time of the trade (such as liquidity), the reason provided by the erring party, and the financial impact on all parties involved. Furthermore, a non-refundable Administrative Fee is levied for every request submitted for review, and its payment is mandatory regardless of whether SGX ultimately decides to adjust the price, cancel the trade, or let the trade stand. The other options are incorrect because SGX’s intervention is not contingent on the trade being outside the error trade price range, nor is the decision left solely to the agreement of the involved parties for trades reviewed under this policy. The fee is never automatically waived for a first request, although it is tiered, and there are no provisions for automatic adjustments based on a specific reporting timeframe.