Singapore legislation
Regulation 44
of Securities and Futures (Clearing Facilities) Regulations 2013
Regulation 44
Segregation of customers’ money held by recognised clearing house
Subregulation 1
A recognised clearing house which accepts any money or assets deposited with or paid to it by its members, for or in relation to any contracts of the customers of those members, shall, in respect of each contract which is cleared or settled by it, and for or in relation to which any money or assets are deposited with or paid to it, require the member to notify it in such manner as it may determine —
whether that contract is a contract of a customer of the member;
whether the money or assets deposited or paid for or in relation to that contract are deposited or paid for or in relation to a contract of a customer of the member; and
if that contract is a specified transaction of a customer of the member, whether the books for the money or assets that are deposited or paid for or in relation to that contract are, in accordance with the instructions given to the member by that customer, to be separated from the books for any money or assets deposited with or paid to the recognised clearing house for or in relation to the contracts of other customers of the member.
Subregulation 2
Where a member of a recognised clearing house has notified the recognised clearing houses under paragraph (1) that any money (referred to in this paragraph as the relevant money) or assets (referred to in this paragraph as the relevant assets) are deposited or paid for or in relation to a contract which is a specified transaction of a customer of the member, and that the books for the relevant money or relevant assets are to be separated from the books for any money or assets deposited or paid for or in relation to the contracts of other customers of the member, the recognised clearing house shall —
subject to regulations 45 and 46, ensure that the relevant money is deposited in a trust account, or the relevant assets are deposited in a custody account, to be held for the benefit of the customers of the member;
ensure that the relevant money or relevant assets are kept separate from all other money and assets received by the recognised clearing house which are deposited or paid for or in relation to the contracts of the members of the recognised clearing house;
ensure that the relevant money or relevant assets are kept separate from the money and assets of the recognised clearing house; and
keep the books for the relevant money or relevant assets separate from the books for the money or assets deposited or paid for or in relation to the contracts of any other customer of any member of the recognised clearing house.
Subregulation 3
Where any money (referred to in this paragraph as the relevant money) or assets (referred to in this paragraph as the relevant assets) are deposited or paid for or in relation to a contract of a customer of a member of a recognised clearing house, and the books for the relevant money or relevant assets are not required to be separated from the books for the money or assets deposited or paid for or in relation to the contracts of other customers of the member, the recognised clearing house shall —
subject to regulations 45 and 46, ensure that the relevant money is deposited in a trust account, or the relevant assets are deposited in a custody account, to be held for the benefit of the customers of the member;
ensure that the relevant money or relevant assets are kept separate from all other money and assets received by the recognised clearing house which are deposited or paid for or in relation to the contracts of the members of the recognised clearing house;
ensure that the relevant money or relevant assets are kept separate from the money and assets of the recognised clearing house; and
keep the books for the money or assets deposited or paid for or in relation to the contracts of the customers of the member separate from the books for the money or assets deposited or paid for or in relation to the contracts of the customers of any other member of the recognised clearing house.
Subregulation 4
Notwithstanding paragraphs (2)(a) and (3)(a), where a member of a recognised clearing house has notified the recognised clearing house under paragraph (1) that any money (referred to in this paragraph as the relevant money) or assets (referred to in this paragraph as the relevant assets) are deposited or paid for or in relation to a contract of a customer of the member, and the member is a bank used by the recognised clearing house for the purpose of depositing money or assets, the recognised clearing house shall ensure that the relevant money is deposited, or the relevant assets are deposited, in an account which is not operated by the member in its role as a bank or custodian, as the case may be.
Subregulation 5
Nothing in paragraphs (2)(a) and (3)(a) shall prevent a recognised clearing house from commingling all money or assets deposited pursuant to paragraphs (2)(a) and (3)(a) in the same trust account or custody account, as the case may be.
Subregulation 6
Where a recognised clearing house has been convicted of an offence under regulation 52 of contravening paragraph (2)(a) or (b) or (3)(a) or (b), in so far as any money which has been deposited in a trust account referred to in paragraph (2)(a) or (3)(a), or any asset which has been deposited in a custody account referred to in paragraph (2)(a) or (3)(a), is used for any purpose other than —
for or in relation to a contract of a customer of a member of the recognised clearing house; or
in accordance with regulations 45 and 46,the recognised clearing house shall —
if the contravention involved any money, repay the money to the trust account; or
if the contravention involved any asset —
return the asset to the custody account; or
if the asset cannot be returned to the custody account, deposit in the trust account, for the benefit of the customers of the member, an amount of money equivalent to the monetary value of the asset at the time of the contravention.
Subregulation 7
In this regulation, “bank” has the same meaning as in section 2(1) of the Banking Act (Cap. 19).