49I. Application of fund

Amended

Last amended by an amending law of 1995.

(1)

Subject to this Part, a fidelity fund shall be held and applied for the purpose of compensating any person, other than an accredited investor, who suffers pecuniary loss because of a defalcation committed in the course of, or in connection with, the trading of a futures contract which is cleared or to be cleared by a clearing house or a Futures Exchange in Singapore by a member of a Futures Exchange or by any director, officer, futures broker’s representative or employee, as the case may be, of the member of a Futures Exchange in relation to any money or other property which, after 1st April 1995 —

(a)

was entrusted to or received by that member or by any of its directors, officers, futures broker’s representatives or employees for or on behalf of any other person; or

(b)

was entrusted to or received by that member either as the sole trustee or trustees or as trustee or trustees with any other person or persons, or by any of its directors, officers, futures broker’s representatives or employees as trustee or trustees or for or on behalf of the trustees of that money or property.

(2)

Except as otherwise provided in this section, the total amount that may be paid under this Part to all persons eligible to claim compensation and who suffer loss through defalcations by a member of a Futures Exchange or through defalcations by any of the member’s directors, officers, futures broker’s representatives or employees shall not, in any event, exceed in respect of that member the sum of $500,000, but, for the purposes of this subsection, any amount paid from a fidelity fund shall, to the extent to which the fund is subsequently reimbursed therefor, be disregarded.

(3)

For the purposes of this section, “director” or “officer”, in relation to a member of a Futures Exchange, includes a person who has been, but at the time of any defalcation in question has ceased to be, a director or an officer of the member if, at the time of the defalcation, the person claiming compensation has reasonable grounds for believing that person to be a director or an officer of the member.

(4)

Nothing in this Part shall be construed as to allow a person to claim compensation against the fidelity fund of a Futures Exchange if —

(a)

the person has suffered pecuniary loss because of a defalcation committed by a member of the Exchange or by any director, officer, futures broker’ representative or employee of the member; and

(b)

such defalcation is in respect of moneys deposited by that person with the futures broker or moneys belonging to that person held by that futures broker, in connection with the trading of a contract which is not a futures contract that is cleared or to be cleared by a clearing house or a Futures Exchange in Singapore.

Terms defined in s 2

accredited investor
Defined · s 2
“accredited investor” means —(a)an individual whose net personal assets exceed $5 million or its equivalent in value in foreign currencies; or(b)a corporation with net assets exceeding $10 million in value or its equivalent in value in foreign currencies as determined in accordance with the most recent audited balance-sheet of the corporation;
Open s 2
clearing house
Defined · s 2
“clearing house”, in relation to a futures market, means a body corporate, or an association or organisation forming part of a Futures Exchange, that —(a)clears and settles futures contracts; and(b)makes adjustments to the contractual obligations arising out of those futures contracts;
Open s 2
director
Defined · s 2
“director” has the same meaning as in the Companies Act;
Open s 2
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;
Open s 2
futures broker
Defined · s 2
“futures broker” means any person, whether as principal or agent, who —(a)carries on the business of soliciting or accepting orders, for the purchase or sale of any commodity under a futures contract on any Futures Exchange or futures market whether or not that person accepts any money, securities or property (or extends credit in lieu thereof) to margin, guarantee or secure any contract or transaction that may result therefrom; or(b)carries on the business of leveraged foreign exchange trading,whether the business is part of, or is carried on in conjunction with, any other business;
Open s 2
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;
Open s 2
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;
Open s 2
member
Defined · s 2
“member” means a person who holds membership of any class or description of a Futures Exchange whether or not he holds any share in the share capital of the Exchange;
Open s 2
officer
Defined · s 2
“officer” has the same meaning as in the Companies Act;
Open s 2

Report

Read on from s 49J