Tuesday, July 24, 2012

SGX Enhances Default Management Framework for Derivatives

The Singapore Exchange (SGX) Monday unveiled enhancements to its default management framework for derivatives products.
The enhanced rules, which will take effect August 7 this year, seek to protect the bourse’s derivatives market against systemically destabilising events. This also followed a public consultation issued in September 2011.
“SGX is making a timely change in anticipation of expansion in the scope of its clearing business and to address the needs of its members,” the exchange said in a statement.
The rule enhancements include establishing the Clearing Member’s liabilities in circumstances of multiple defaults if the Clearing Member resigns.
The new rules also allow SGX-Derivatives Clearing (SGX-DC) to apply the Clearing Fund continually to meet the losses arising from all defaults which occur within a fixed period of 90 days.

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