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.