Securities and Futures Act 2001 · 2020 Revised Edition · Part 6B · Clearing of Derivatives Contracts
129C. Clearing of specified derivatives contracts
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Every specified person who is a party to a specified derivatives contract must, within such time as the Authority may prescribe by regulations made under section 129G, cause the specified derivatives contract to undergo clearing, by a clearing facility operated by an approved clearing house or a recognised clearing house, in accordance with the business rules of the approved clearing house or recognised clearing house, as the case may be.
derivatives contract
“derivatives contract” means —(a)any contract or arrangement under which —(i)a party to the contract or arrangement is required to, or may be required to, discharge all or any of its obligations under the contract or arrangement at some future time; and(ii)the value of the contract or arrangement is determined (whether directly or indirectly, or whether wholly or in part) by reference to, is derived from, or varies by reference to, either of the following:(A)the value or amount of one or more underlying things;(B)fluctuations in the values or amounts of one or more underlying things; or(b)any contract or arrangement that is, or that belongs to a class of contracts or arrangements that is, prescribed to be a derivatives contract,but does not include —(c)securities;(d)any unit in a collective investment scheme;(e)a spot contract;(f)a deposit as defined in section 4B of the Banking Act 1970, where the deposit is accepted by a bank or merchant bank licensed under that Act;(g)a deposit as defined in section 2 of the Finance Companies Act 1967, where the deposit is accepted by a finance company as defined in that section of that Act;(h)any contract of insurance in relation to any class of insurance business specified in section 3(1) of the Insurance Act 1966; or(i)any contract or arrangement that is, or that belongs to a class of contracts or arrangements that is, prescribed not to be a derivatives contract;
Any specified person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part of a day during which the offence continues after conviction.
Except where the parties to a specified derivatives contract have entered into an express agreement to the contrary, the specified derivatives contract is not, by reason only of a contravention of subsection (1) in relation to the specified derivatives contract, voidable or void.