Singapore legislation
Regulation 11
of Securities and Futures (Clearing Facilities) Regulations 2013
Regulation 11
Obligation to notify Authority of certain matters
Subregulation 1
For the purposes of section 58(1)(f)(i) of the Act, an approved clearing house shall, as soon as practicable after the occurrence of any of the following circumstances, give the Authority notice of the circumstance:
any civil or criminal legal proceeding instituted against the approved clearing house, whether in Singapore or elsewhere;
any disciplinary action taken against the approved clearing house by any regulatory authority, whether in Singapore or elsewhere, other than the Authority;
any change to the regulatory requirements imposed on the approved clearing house by any regulatory authority, whether in Singapore or elsewhere, other than the Authority, that will have an impact on the approved clearing house;
any admission or cessation of a bank to act as a settlement bank for the approved clearing house;
any failure by any party to debit or credit the relevant accounts for the purposes of the settlement of transactions, including the settlement of money, securities or physically delivered derivatives contracts;
the approved clearing house becomes aware of any development (including any development in relation to any associate of the approved clearing house, or any other entity treated as part of the approved clearing house’s group of companies according to the accounting standards applicable to the approved clearing house) that has occurred or is likely to occur which the approved clearing house has reasonable grounds to believe has materially and adversely affected, or is likely to materially and adversely affect —
the financial soundness or reputation of the approved clearing house; or
the approved clearing house’s ability to conduct its business;
the approved clearing house becomes aware that its chairperson, chief executive officer or director or a person who holds an appointment mentioned in section 71(2) of the Act is, in accordance with the Guidelines on Fit and Proper Criteria, no longer fit and proper to hold that office or appointment;
the approved clearing house becomes aware that a substantial shareholder, 12% controller or 20% controller of the approved clearing house is, in accordance with the Guidelines on Fit and Proper Criteria, no longer fit and proper to be a substantial shareholder, 12% controller or 20% controller (as the case may be) of the approved clearing house;
the approved clearing house becomes aware that it is not likely to be able to conduct its business prudently or to comply with the provisions of the Act and directions made thereunder, having regard to the likely influence over the approved clearing house of a substantial shareholder, 12% controller or 20% controller of the approved clearing house.
Subregulation 1A
In paragraph (1), “12% controller” and “20% controller” have the meanings given by section 70(3) of the Act.
Subregulation 1B
For the purposes of section 58(4) of the Act, an approved clearing house must notify the Authority of the following matters:
any disruption, suspension or termination of, or delay in, any clearing or settlement procedure of the approved clearing house (including any disruption, suspension, termination or delay resulting from any system failure) that —
has a severe and widespread impact on the approved clearing house’s operations; or
materially impacts the approved clearing house’s service to its participants;
any other disruption, suspension or termination of, or delay in, any clearing or settlement procedure of the approved clearing house (including any disruption, suspension, termination or delay resulting from any system failure);
any intention on the part of the approved clearing house to enter into a loan arrangement in the capacity of a debtor, guarantor or security provider, including an arrangement to issue debentures, but excluding a credit facility obtained for the purpose of managing its liquidity positions for its day‑to‑day activities or exposures.
Subregulation 1C
For the purposes of section 58(4) of the Act, an approved clearing house must notify the Authority —
of a matter mentioned in paragraph (1B)(a) no later than one hour after the discovery by the approved clearing house of the disruption, suspension, termination or delay; (b)of a matter mentioned in paragraph (1B)(b) no later than one day after the discovery by the approved clearing house of the disruption, suspension, termination or delay; and
of a matter mentioned in paragraph (1B)(c) no later than 14 days before the date on which the approved clearing house enters into the loan arrangement, or such shorter period before that date as the Authority may allow in any particular case where the Authority is satisfied that —
it is necessary for the approved clearing house to enter into the loan arrangement urgently because of any market or economic conditions, whether prevailing or anticipated, that affect or may affect any term of the loan arrangement; or
it is necessary for the approved clearing house to enter into the loan arrangement urgently to achieve any of its business or strategic objectives.
Subregulation 2
Where a circumstance under paragraph (1)(a), (b) or (e) or (1B)(a) or (b), or a development mentioned in paragraph (1)(f), has occurred, the approved clearing house shall, in addition to the notice required under paragraph (1) or (1B) (as the case may be), within 14 days after the occurrence of the circumstance or development, or such longer period as the Authority may permit, submit a report to the Authority of the circumstances relating to the occurrence, the remedial actions taken at the time of the occurrence, and the subsequent follow-up actions that the approved clearing house has taken or intends to take.
Subregulation 3
An approved clearing house shall, within a reasonable period of time prior to entering into negotiations to establish a linkage, arrangement or co-operative arrangement with a person (being a person establishing or operating any other clearing facility, any organised market or any trade repository), give the Authority notice of such intent to enter into negotiations.
Subregulation 4
An approved clearing house shall, if it intends to make a declaration that a member of the approved clearing house has defaulted or to commence default proceedings against any member of the approved clearing house, immediately give the Authority notice of such intent.
Subregulation 5
In paragraph (3), “co-operative arrangement” shall not include —
any joint development of products and services;
any joint marketing efforts between the approved clearing house and the person referred to in that paragraph in promoting the services of any clearing facility, organised market or trade repository established or operated by the approved clearing house or the person; or
any memorandum of understanding for the exchange of information.