Practice Note 4.6.7A(3) — Firm-Level Monitoring of Capital and Financial Requirements and Prudential Limits

Past version: Effective from 18 Sep 2012 to 14 Mar 2013

Issue Date Cross Reference Enquiries

Added on 18 September 201218 September 2012.

Rule 4.6.7A(3) Please contact Member Supervision:

Facsimile No : 6538 8273
E-Mail Address:

1. Introduction

1.1 This Practice Note explains the requirement for monitoring potential breaches of capital and financial requirements and prudential limits on exposures to a single customer and a single security set out in Rule 4.6.7A(3).

2. Firm-Level Monitoring of Capital Requirements and Prudential Limits

2.1 In an electronic trading environment where orders are processed and routed at speed, Trading Members should use appropriate measures to monitor if the firm is at risk of breaching its capital or financial requirements or any prudential limits, for example:—
(a) setting automated filters on firm-wide aggregated exposures;
(b) having processes to generate warnings; or
(c) having processes to route large value orders for review.

Added on 18 September 201218 September 2012.