General Announcement::News Release: SGX proposes to refine members' Derivatives Clearing Fund requirements

Issuer & Securities

Issuer/ Manager
SINGAPORE EXCHANGE LIMITED
Securities
SINGAPORE EXCHANGE LIMITED - SG1J26887955 - S68
Stapled Security
No

Announcement Details

Announcement Title
General Announcement
Date &Time of Broadcast
13-Mar-2018 17:06:49
Status
New
Announcement Sub Title
News Release: SGX proposes to refine members' Derivatives Clearing Fund requirements
Announcement Reference
SG180313OTHRWN1U
Submitted By (Co./ Ind. Name)
Jo-Ann
Designation
Senior Associate
Description (Please provide a detailed description of the event in the box below)
Singapore Exchange (SGX) is proposing refinements to enhance the robustness of the SGX-Derivatives Clearing (SGX-DC) Clearing Fund. These will result in each member contributing to the Clearing Fund an amount that more accurately reflects the risk it poses to SGX-DC.

The proposed amendments include (i) a methodology change such that members' contribution requirements are directly determined by potential stress test losses that SGX-DC might suffer in the event of a default of a Clearing Member(s), and (ii) combining exchange-traded derivatives and over-the-counter (OTC) commodity derivatives into a single contract class for risk management purposes.

With these changes, SGX-DC members will have better capital efficiency and greater clarity of their contribution requirements. The proposed changes would also ensure that members' contributions for the combined contract class are managed in line with the margining for these contract classes.

"We are proposing several refinements which simplify the SGX-DC Clearing Fund for members and allow the Fund to be more nimble when responding to changes in stress test losses. The recalibration of the Clearing Fund requirement is a result of our constant review of our management of risk, and is in line with global practices," said Agnes Koh, Chief Risk Officer of SGX.

The public can submit feedback on the proposed amendments to the rules till 3 April 2018. Subject to regulatory clearance, SGX intends to introduce the refinements in the third quarter of 2018.

Full details of the public consultation including the questions SGX posed are found here. Feedback can be sent to:

Email: Rules@sgx.com

Mail: Singapore Exchange Regulation
11 North Buona Vista Drive
#06-07, The Metropolis Tower 2
Singapore 138589
(Attention: Regulatory Development & Policy)

Attachments

20180313_SGX_proposes_to_refine_members_Clearing_Fund_requirements.pdf
Total size =284K