42. Fixing of position and trading limits in futures contracts

(1)

For the purpose of diminishing or eliminating, or preventing excessive speculation in any commodity under a futures contract, the Authority or a Futures Exchange, with the approval of the Authority, may, by notice in writing from time to time, establish and fix such limits as it considers necessary on the amount of trading which may be done or positions which may be held by any person, generally or specifically, under a futures contract on or subject to the business rules of a futures market.

(2)

In determining whether a person has exceeded such limits, the positions held and trading done by any person, directly or indirectly, controlled by such a person shall be included with the positions held and trading done by that person.

(3)

Such limits upon positions and trading shall apply to positions held by, and trading done by, 2 or more persons acting pursuant to an express or implied agreement or understanding, as if the positions were held by, or the trading done by, a single person.

(4)

This section shall not apply to transactions or positions which are bona fide hedging transactions or positions as defined by a futures market in accordance with such regulations as may be prescribed.

(5)

No person shall, directly or indirectly —

(a)

buy or sell or agree to buy or sell, under a futures contract on or subject to the business rules of the futures market, any number of such futures contract in excess of the trading limits fixed for one business day, or other stated period set by the Authority or a Futures Exchange with the approval of the Authority; or

(b)

hold or control a net buy or sell position under a futures contract on or subject to the business rules of the futures market in excess of any position limit fixed by the Authority or a Futures Exchange, with the approval of the Authority, with respect to that futures contract.

(6)

Nothing in this section shall preclude the Authority or a Futures Exchange, with the approval of the Authority, from fixing different trading or position limits for different futures contracts or delivery months or for different days remaining until the last day of trading in a contract or different trading limits for the purposes of subsection (5), or from exempting transactions under this section.

Terms defined in s 2

Authority
Defined · s 2
“Authority” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act;
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business rules
Defined · s 2
“business rules”, in relation to a body corporate that maintains or proposes to maintain a futures market, means the rules, regulations and by-laws, by whatever name called, governing the activities and conduct of —(a)the body corporate and its members;(b)its clearing house; and(c)other persons in relation to the futures market,whether those rules, regulations or by-laws are made by the body corporate or are contained in the Memorandum and Articles of Association of the body corporate or altered or supplemented by the Authority pursuant to section 6(4);
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commodity
Defined · s 2
“commodity”, in relation to a futures contract, means —(a)a financial instrument; and(b)gold and such other items, goods, articles, services, rights and interests, which are the subject of futures contracts, as the Authority may by order prescribe;
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futures contract
Defined · s 2
“futures contract” means a contract the effect of which is that —(a)one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time pursuant to terms and conditions set forth in the business rules or practices of a Futures Exchange or a futures market; or(b)the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity at the time of the making of the contract and at a specified future time, such difference being determined in accordance with the business rules or practices of the Exchange or futures market at which the contract is made,and includes a futures option transaction;
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Futures Exchange
Defined · s 2
“Exchange” or “Futures Exchange” means —(a)the Singapore International Monetary Exchange Ltd.; or(b)a body corporate —(i)that provides or proposes to provide the physical facilities necessary for trading in futures contracts; and(ii)that maintains or proposes to maintain a futures market that is approved by the Authority under section 4;
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futures market
Defined · s 2
“futures market” means —(a)a market, a Futures Exchange or other place, whether in Singapore or elsewhere, at which trading in futures contracts regularly takes place; or(b)an electronic system, whether operating in Singapore or elsewhere, through which trading in futures contracts is carried out; but excludes an electronic facility which merely provides price or other information on futures contracts (whether the facility is part of or carried on in conjunction with the provision of any other information not related to futures contracts) and which does not permit users of the facility to channel orders for, execute transactions in, or make a market in, futures contracts;
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Report

Read on from s 43