In forceAmended2020 Revised Edition

Contents

Commodity Trading Act 1992 · 2020 Revised Edition · Part 5 · Conduct of Commodity Trading Business

30. Segregation of customer’s funds by broker

Amended

Last amended by an amending law of 2021.

(1)

The Board may, with the approval of the Minister, make regulations to provide that every commodity broker must treat and deal with all money, securities or property received by the commodity broker from a customer in such manner and in such separate accounts as may be prescribed.

(2)

Without limiting subsection (1), the regulations may provide —

(a)

for the circumstances in which funds, securities or property received from a customer may be segregated and deposited in the same account;

(b)

for the circumstances in and purposes for which funds may be withdrawn from separate trust accounts;

(c)

for the exemption by the Board of any commodity broker or class of commodity brokers, or any transaction or class of transactions relating to trading in commodity contracts, from any of the provisions of the regulations; and

(d)

that a contravention thereof shall be punishable with a fine not exceeding $30,000 or with imprisonment for a term not exceeding 3 years or with both.

(3)

Money, securities or property received from a customer and held by a commodity broker in a separate trust account under any regulations made under subsection (1) —

(a)

is not available for payment of the debts of the commodity broker to a creditor of the commodity broker; or

(b)

is not liable to be attached or taken under or pursuant to an enforcement order or process of any court at the instance of the creditor,unless the creditor is a customer of the commodity broker and the debt owed to the creditor was incurred in connection with trading in any commodity contract.

(4)

This section does not take away or affect a lawful claim or lien that a commodity broker has against, or on, any money, securities or property held in an account under any regulations made under subsection (1).

(5)

This Act or any written law does not prevent a commodity market or a clearing house, with the approval of the Board, from using the money, securities or property held in a trust account to meet the obligations of a commodity broker, being a member of the market or the clearing house, who defaults, if —

(a)

the default of the commodity broker is directly attributable to the failure of the commodity broker’s customer to meet the obligations under a commodity contract; and

(b)

the failure to use the money, securities or property held in a trust account may jeopardise the financial integrity of the market or the clearing house.

(6)

In this section, “customer” means a person on whose account a commodity broker carries on trading in any commodity contract, but does not include directors, employees and representatives and related corporations of the commodity broker.

Terms defined in s 2

Board
Defined · s 2
“Board” means the Enterprise Singapore Board established by section 3 of the Enterprise Singapore Board Act 2018;
Open s 2
clearing house
Defined · s 2
“clearing house”, in relation to a commodity market, means a body corporate that —(a)clears and settles commodity contracts; and(b)makes adjustments to the contractual obligations arising out of those commodity contracts;
Open s 2
commodity
Defined · s 2
“commodity” means any produce, item, goods or article that is the subject of any —(a)commodity forward contract;(b)leveraged commodity trading;(c)contract made pursuant to trading in differences; or(d)spot commodity trading,and includes an index, a right or an interest in such commodity, and such other index, right or interest of any nature as the Board may, by notification in the Gazette, prescribe to be a commodity; but does not include any produce, item, goods or article that is the subject of a commodity futures contract and any index, right or interest in such produce, item, goods or article;
Open s 2
commodity broker
Defined · s 2
“commodity broker” means a person who (whether as principal or agent) carries on the business of soliciting, or accepting orders, for the purchase or sale of any commodity by way of or relating to any commodity contract, whether or not the business is part of, or is carried on in conjunction with, any other business;
Open s 2
commodity contract
Defined · s 2
“commodity contract” means —(a)a commodity forward contract;(b)any contract made pursuant to trading in differences with respect to a commodity, not being a commodity futures contract; or(c)any contract made pursuant to a transaction in leveraged commodity trading;
Open s 2
commodity market
Defined · s 2
“commodity market” means —(a)a market, whether in Singapore or elsewhere, at which commodity contracts are regularly made; or(b)an electronic system, whether operating in Singapore or elsewhere, through which trading in commodity contracts is carried out, but excludes an electronic facility which merely provides price or other information relating to commodity contracts (whether that facility is part of or carried on in conjunction with the provision of any other information not related to commodity contracts) and which does not permit users of the facility to channel orders for, execute transactions in, or make markets in, commodity contracts;
Open s 2
customer
Defined · s 2
“customer” means a person on whose account a commodity broker carries on trading in commodity contracts;
Open s 2
member
Defined · s 2
“member” means a person who holds a membership of any class or description of a commodity market whether or not the person holds any share in the share capital of that commodity market;
Open s 2