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  • MAE-3 MAE-3 Rules of Licensed Exchanges

    • MAE-3.1 MAE-3.1 General Obligations

      • MAE-3.1.1

        The CBB may prescribe the matters that a licensed exchange or licensed market operator shall make provision for in the business rules or listing rules of the licensed exchange or licensed market operator and the licensed exchange or licensed market operator shall make provision for those matters in its business rules or listing rules, as the case may be.

      • MAE-3.1.2

        A licensed exchange or licensed market operator shall provide the business rules and listing rules in conformity with law and relevant CBB regulations or directives.

      • MAE-3.1.3

        Any reference to an amendment to a business rule or listing rule shall be construed as a reference to a change to the scope of or to any requirement, obligation or restriction under the business rule or listing rule, as the case may be, whether the change is made by an alteration to the text of the rule or by any other notice issued by or on behalf of the licensed exchange or licensed market operator.

    • MAE-3.2 MAE-3.2 Content of Rules of Licensed Exchanges

      • MAE-3.2.1

        For the purposes of MAE-3.1.2, a licensed exchange or licensed market operator shall in its business rules or in its listing rules as the case may be, make provision to the satisfaction of the CBB for:

        (a) The criteria that it would use to determine the admission, or denial of admission, of persons to or from membership;
        (b) Continuing requirements for each member, including requirements:
        (i) That prohibit or prevent the member from engaging in improper conduct when dealing as an agent for the customers of the member on any market operated by the licensed exchange or licensed market operator;
        (ii) That prohibit or prevent the member from engaging in improper conduct when participating in any market operated by the licensed exchange or licensed market operator;
        (iii) On the financial condition of the member such as to provide reasonable assurance that all obligations arising out of the activities of the member in any market operated by the licensed exchange or licensed market operator will be met;
        (iv) That facilitate the monitoring by the licensed exchange or licensed market operator of the compliance of the member with the business rules of the licensed exchange or licensed market operator; and
        (v) That provide for the expulsion, suspension or disciplining of members for conduct inconsistent with just and equitable principles in the transaction of business, or for a contravention of the business rules of the licensed exchange or licensed market operator;
        (c) The class or classes of securities or futures contracts that may be traded on any market operated by the licensed exchange or licensed market operator;
        (d) The terms and conditions under which securities may be listed for quotation by the licensed exchange;
        (e) The terms and conditions relating to the calculation of the final settlement price, the daily price limits and the accumulation of positions of futures contracts traded on any market operated by the licensed exchange or licensed market operator;
        (f) The manner in which trades in securities or futures contracts are effected on any market operated by the licensed exchange or licensed market operator;
        (g) Where the licensed exchange or licensed market operator operates a trading floor, fair and properly supervised floor trading practices;
        (h) The measures to prevent and deal with manipulation, market rigging and artificial market conditions in any market operated by the licensed exchange or licensed market operator;
        (i) The arrangements for the safe and efficient clearing and settlement of trades concluded on any market operated by the licensed exchange or licensed market operator;
        (j) The establishment of any compensation arrangement, or any other scheme or system accepted by the CBB, which would compensate any customer who suffers pecuniary loss through the defalcation of a member, or any of its directors, officers, employees or representatives, in respect of any money or other property:
        (i) That was entrusted to or received by a member, or any of its directors, officers, employees, or representatives, for or on behalf of the customer; or
        (ii) In respect of which the member was a trustee;
        (k) The dissemination of announcements by companies listed on any market operated by the licensed exchange or licensed market operator through a single and central facility; and
        (l) The carrying on of business of the licensed exchange or licensed market operator with due regard to the interests and protection of the investing public.
        Amended: April 2016
        Amended: April 2013

    • MAE-3.3 MAE-3.3 Amendment of Business Rules and Listing Rules

      • MAE-3.3.1

        A licensed exchange or licensed market operator which intends to amend its business rules or listing rules shall, prior to making the amendment, notify the CBB of:

        (a) The proposed amendment;
        (b) The purpose of the proposed amendment; and
        (c) The date on which the proposed amendment is intended to come into force.

      • MAE-3.3.2

        The licensed exchange shall, prior to notifying the CBB under MAE-3.3.1, consult its users and participants on the proposed amendment, unless the proposed amendment would have limited impact on its users and participants.

      • MAE-3.3.3

        Provided however that on receipt of the notification, if CBB is of the opinion that the users and the participants would be impacted by the amendments, it may require the licensed exchange to consult its users and participants.

      • MAE-3.3.4

        Subject to Paragraphs MAE-3.3.5 and MAE-3.3.7, an amendment shall not come into force unless the notification referred to in Paragraph MAE-3.3.1 is submitted at least 21 days before the date on which the amendment is proposed to come into force.

      • MAE-3.3.5

        The CBB may, on its own initiative or on the application of the licensed exchange or licensed market operator, by notice in writing to the licensed exchange or licensed market operator, make or allow an amendment to come into force before the expiry of the period of 21 days referred to in Paragraph MAE-3.3.2.

      • MAE-3.3.6

        The CBB may, subject to Paragraph MAE-3.3.7, within 21 days after the receipt of the notification referred to in Paragraph MAE-3.3.1, by notice in writing to the licensed exchange, disallow, alter or supplement the whole or any part of the proposed amendment and, thereupon such whole or part of the proposed amendment as the case may be:

        (a) Where it is disallowed, shall not come into force; or
        (b) Where it is altered or supplemented, shall come into force as altered or supplemented accordingly.

      • MAE-3.3.7

        The CBB, may on its own initiative, by notice in writing to the licensed exchange or licensed market operator, vary the period specified in Paragraph MAE-3.3.6, and where the period in that paragraph is extended, the amendment shall not come into force before the expiry of the extended period.

    • MAE-3.4 MAE-3.4 Business Rules of Licensed Exchanges and Licensed Market Operators have Effect as Contract

      • MAE-3.4.1

        The business rules of a licensed exchange or licensed market operator shall be deemed to be, and shall operate as, a binding contract:

        (a) Between the licensed exchange or licensed market operator and each member; and
        (b) Between each member and every other member.

      • MAE-3.4.2

        The licensed exchange or licensed market operator and each member shall be deemed to have agreed to observe and perform the provisions of the business rules that are in force for the time being, so far as those provisions are applicable to the licensed exchange or licensed market operator, or that member, as the case may be.

    • MAE-3.5 MAE-3.5 Determination of Position and Trading Limits

      • MAE-3.5.1

        The position and trading limits in respect of any security or contract including futures and options contracts traded by, through or with a member of a licensed exchange or licensed market operator which holds an appropriate license to trade such contracts, shall be determined from time-to-time by the licensed exchange or licensed market operator using such criteria or methodology as may be established by the licensed exchange or licensed market operator with the approval of the CBB.

      • MAE-3.5.2

        The position and trading limits under Paragraph MAE-3.5.1 may include limits on a person holding or controlling positions, separately or in combination, net long or net short, for the purchase or sale of any securities or contracts, including futures or options contracts.

      • MAE-3.5.3

        The licensed exchange or licensed market operator:

        (a) Shall require a person or any person acting for him pursuant to an express or implied agreement or understanding, who holds or controls net long or net short positions in any contract in excess of the position limits determined under Paragraph MAE-3.5.1, to trade under such conditions and restrictions as the licensed exchange or licensed market operator considers necessary to ensure compliance with the position limits determined under that Paragraph; and
        (b) May require the person referred to in MAE-3.5.3 (a) to do one or more of the following actions:
        (i) Cease any further increase in his position;
        (ii) Liquidate his position to comply with the position limits determined under Paragraph MAE-3.5.1 within such time as may be determined by the licensed exchange or licensed market operator; and
        (iii) Be subject to higher margin requirements in respect of his position.
        Amended: April 2013

    • MAE-3.6 MAE-3.6 Non-Compliance with Business Rules or Listing Rules not to Substantially Affect Rights of Person

      • MAE-3.6.1

        Any failure by a licensed exchange or licensed market operator to comply with:

        (a) This Module;
        (b) Its business rules; or
        (c) Where applicable, its listing rules;

        in relation to a matter shall not prevent the matter from being treated, for the purposes of this Module as done in accordance with the business rules or listing rules, so long as the failure does not substantially affect the rights of the person entitled to require compliance with the business rules or listing rules.

        Amended: April 2016

    • MAE-3.7 MAE-3.7 Requirements to Register Trading Personnel

      • MAE-3.7.1

        The exchange shall make provision for the registration with the CBB of personnel having access to trading facilities or trading terminals and restricting access only to such registered personnel of the members.

    • MAE-3.8 MAE-3.8 Compliance Officer

      • MAE-3.8.1

        Every licensed exchange or licensed market operator must appoint a Compliance Officer. The Compliance Officer is responsible for discharging the obligations of the licensed exchange or the licensed market operator.

      • MAE-3.8.2

        In accordance with MAE-3.8.1:

        (a) The Compliance Officer should be competent and knowledgeable regarding the CBB Laws, rules and regulations of the securities market and the various applicable modules;
        (b) The Compliance Officer shall:
        (i) Monitor the transactions undertaken by their members or participants;
        (ii) Identify disorderly trading conditions or conduct that may involve market abuse;
        (iii) Identify and monitor transactions undertaken by insiders;
        (iv) Identify any breach of CBB Law, rules and regulations;
        (c) The licensed exchange or the licensed market operator shall on the identification of any breach referred to in MAE-3.8.2 (b) report such breach to the CBB without delay for the investigation and prosecution of market abuse and shall provide full assistance to the latter in investigating and prosecuting market abuse occurring on or through the systems of the licensed exchange or licensed market operator.
        Amended: April 2013

    • MAE-3.9 MAE-3.9 Outsourcing

      • MAE-3.9.1

        The licensed exchange or the licensed market operator seeking to outsource functions or activities should have the following in place:

        (a) Comprehensive policy to guide the assessment of whether and how these functions or activities can be appropriately outsourced;
        (b) The Board shall have the responsibility for the outsourcing policy and related overall responsibility for activities undertaken under that policy;
        (c) The licensed exchange or the licensed market operator retains the ultimate responsibility for the functions or activities that are outsourced;
        (d) The licensed exchange or the licensed market operator must notify the CBB and seek its approval before committing to an outsourcing arrangement;
        (e) The licensed exchange or the licensed market operator must maintain and regularly review contingency plans to enable them to set-up alternative arrangements should the outsourcing provider fail;
        (f) The exchange must nominate a member of senior management with day-to-day responsibility for handling the relationship with the outsourcing provider and ensuring that relevant risks are addressed;
        (g) All the outsourcing contract must be legally enforceable;
        (h) A notice period of at least three months shall be required from the outsourcing party to terminate the contract; and
        (i) On termination all data pertaining to the licensed exchange or the licensed market operator shall be returned by the outsource provider to the licensed exchange or the licensed market operator.