1) The first consultation paper concerns the imposition of a penalty for failed contracts in structured warrants. This aims to discourage incidences which may potentially disrupt the fair and orderly operation and development of the structured warrants market.
Under this consultation, SGX proposes to impose a penalty on a Clearing Member who fails to deliver a structured warrant contract on Settlement Day. This penalty shall be 25% of the short contract value, subject to a minimum of $5,000 for each failed contract.
2) The second consultation paper introduces a new error trade policy for the structured warrants market, with consequential revisions to the error trade policy for the securities market. These proposed changes enhance the efficiency and transparency in the management of error trades.
SGX's key proposals for erroneous trades referred to it, are:
(a) the erroneous price of a structured warrant will be adjusted, when it falls outside a specified narrow range; and
(b) time limits will be imposed within which error trades must be reported and referred to SGX . -Singapore Exchange
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