6.7 Buying-In, Procurement and Cash Settlement
For clarity under Rules 6.7 and 6.7A:—
"short Clearing Member" refers to the Clearing Member who fails to comply with the obligation set out in Rule 6.5.2A; and
"selling Clearing Member" refers to the Clearing Member who has sold securities in the buying-in market.
6.7.2 Buying in(1) If a short Clearing Member fails, on the Intended Settlement Day of a Novated Contract, to make securities available in accordance with Rule 6.5.2A, CDP shall have the discretion but not the obligation to commence buying-in, on the buying-in market, of those securities, on the Clearing Member's behalf, without prior notice to the short Clearing Member.(1A) Subject to Rule 6.7.12(1), such buying-in will commence on the Intended Settlement Day of the Novated Contract.(2) [Deleted](3) [Deleted](4) The costs of the buying-in shall be paid by the short Clearing Member.
6.7.3 Notification of Buying-in(1) CDP shall inform each short Clearing Member of each and every security that will be bought in on behalf of the short Clearing Member.(2) Buying-in against the short Clearing Member may proceed according to this information and in accordance with Rule 6.7.4.
6.7.4 Buying-In Procedures(1) CDP shall schedule a time for commencement of buying-in and inform Clearing Members of the scheduled time via circular. On the day of buying-in, CDP shall, as far as practicable, by the scheduled time for commencement of buying-in, notify Clearing Members of the securities for buying-in via the SGX website or through such other medium as CDP may consider appropriate. CDP shall, at least 3 working days before changing the scheduled time for commencement of buying-in, inform Clearing Members of the details of such change via circular.(1A) If CDP is of the opinion that, due to an emergency on a particular day, buying-in is unlikely to commence at the scheduled time, CDP shall, via circulars or such other medium as CDP may consider appropriate, inform Clearing Members of the following matters:(a) that buying-in will not commence at the scheduled time; and(b) when it can be determined, the estimated time at which the delayed buying-in will commence.In any case where the commencement of buying-in is delayed, the delayed buying-in shall only commence at least 15 minutes after the original scheduled time.(2) [Rule has been deleted.](3) [Rule has been deleted.](4) [Rule has been deleted.](5) The buying-in bid price, as determined by CDP, will be 2 minimum bids above the highest of the following:(a) the closing price of the previous day;(b) the reference transacted price,(c) the reference bid price; and(d) in respect of a trade in the buying-in market on the previous Market Day for which delivery failed, the transacted price of that trade.For the purpose of this Rule, the reference transacted price and the reference bid price will be any of the last transacted prices and bid prices within the 1 hour preceding the commencement of buying-in, as determined by CDP.(5A) Where necessary, CDP shall have the discretion to make adjustments to any of the prices described in 6.7.4(5) to cater for corporate actions on the particular security.(6) [Rule has been deleted.](7) If the securities are not obtained after the commencement of buying-in, CDP shall have absolute discretion to raise the buying-in price bid by 2 minimum bids, as determined by SGX-ST, from the following, in order to facilitate the successful buying-in of the securities:(a) the prevailing buying-in bid price;(b) the transacted price in the ready market; or(c) the bid price in the ready market,at such time as determined by CDP, from time to time throughout the buying-in session until the securities are bought-in.(8) Subject to Rule 6.7.12(1), if the securities to be bought-in are not bought-in on the first day scheduled for buying-in and unless the securities are withdrawn from buying-in or the short Clearing Member makes the securities available for delivery to CDP by such time as specified by CDP on the following Market Day, the buying-in shall continue on the following Market Day with the buying-in bid price at the commencement of buying-in determined in accordance with 6.7.4(5) and 6.7.4(5A), and CDP shall have absolute discretion to raise the buying-in bid price after the commencement of buying-in in accordance with 6.7.4(7).
See Practice Note 6.7.2(1A), 6.7.4(8), 6.7.7A and 6.7.11.(8A) [deleted](9) [Rule has been deleted.](10) [Rule has been deleted.](11) [Rule has been deleted.](12) [Rule has been deleted.]
6.7.6 Suspension of Buying-In(1) Buying-in shall not apply whenever SGX-ST suspends trading of a security. CDP may then require the short Clearing Member to procure the securities within the time stipulated by CDP.(1A) Buying-in shall not apply whenever trading of a security is halted. CDP may:(a) commence buying-in when trading in that security resumes. The buying-in bid price of that security will be determined as described in 6.7.4(5), 6.7.4(5A) and 6.7.4(7); or(b) require the short Clearing Member to procure the securities within the time stipulated by CDP.(2) Notwithstanding Rule 6.7.6(1), CDP may suspend either indefinitely or for such time as it thinks fit the buying-in of any securities when circumstances appear to make such suspension desirable. CDP may from time to time, either during the continuance or after the termination of any such suspension, remove, renew or re-impose such suspension.
6.7.7 Commission for Buying-In Trades
Buying-in commission, at a rate to be advised by CDP from time to time, shall be charged and borne by the short Clearing Member.
Subject to Rule 6.7.12(1), if securities to be bought-in are not bought-in by the second day scheduled for buying-in, the short Clearing Member shall procure the securities, whether by transacting on the ready market or otherwise, to discharge its delivery obligation.
CDP shall have the discretion to require a short Clearing Member to furnish reports and confirmations that the delivery requirements have been complied with in respect of all sale contracts.
CDP reserves the right to institute buying-in against or require procurement in respect of open sale positions although the net delivery position of the short Clearing Member with CDP is not a short position.
6.7.11 Cash Settlement
If a Clearing Member's obligation to deliver securities in respect of a Novated Contract remains outstanding on the fifth (5th) Settlement Day (or such other number of Settlement Days as CDP may specify) after the Intended Settlement Day of the Novated Contract, CDP shall, on the next Settlement Day, cash settle the Clearing Member's delivery obligation.
CDP reserves the right to:(1) dispense with, or vary the commencement, duration, or any other timelines specified for, any buying-in or procurement to be conducted under this Rule 6.7; and/or(2) cash settle an outstanding delivery obligation notwithstanding that buying-in and/or procurement has not been conducted.