Prohibited Trading Conduct

You may also refer to Statutes Online Database for more information.

SFA 197 False trading and market rigging transactions

Wash Sales

A wash sale is a transaction effected through the market which involves no change in the beneficial ownership of a security. For example, if A transfers title of his securities to B, but agrees with B that B holds the securities for A (such that, for example, when B sells the securities, the proceeds of that sale belong to A), there is no change in the beneficial ownership of those securities.

Since there is no real change in the ownership nor any real obligation to make payment, the transaction is thus essentially fictitious.

Matching Orders

A technique closely related to wash sales is matching orders (also referred to as pre-arranged trading). This essentially involves the entering in of an order for the purchase of securities with the knowledge that a sales order has been entered or will be entered into at substantially the same time, size and price.

SFA 198. Securities market manipulation

 Beside wash sales and matching orders, offenders can seek to use genuine transactions instead to manipulate the market. The idea is to create artificial market conditions.

Usually, such offenders will use the whole series of small but genuine transactions to massage the market.

SFA 199. False or misleading statements

Section 199 deals with the making of statements or dissemination of information that is false or misleading in a material particular.

The person making the statement either knows it is wrong / should have known it was wrong / did not care whether it is right or wrong.

The information must be information that is likely:

(1)   To induce other persons to subscribe for securities;

(2)   To induce the sale or purchase of securities by other persons;

(3)   To have the effect of raising, lowering, maintaining or stabilising the market price of securities.

SFA 200. Fraudulently inducing persons to deal in securities

It is an offence to induce or attempt to induce another person to deal in securities by:

(1)   Any dishonest concealment of material facts;

(2)   Recording or storing in, or by means of, any mechanical, electronic or other device information that is known to be false or misleading in a material particular.

SFA 201. Employment of manipulative and deceptive devices

Section 201 states that No person shall, directly or indirectly, in connection with the subscription, purchase or sale of any securities

(1)   employ any device, scheme or artifice to defraud;

(2)   engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person;

(3)   make any statement he knows to be false in a material particular; or

(4)   omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.

SFA 202. Dissemination of information about illegal transactions

The dissemination of information that illegal transactions are taking place or going to take place can equally create a fictitious effect to the market.

The person “in-the-know” about such transactions can seek to take advantage of the expected market movements to their advantage without themselves being involved in the carrying out of such transactions. Their entry into the market can then either exacerbate the artificial market conditions, or themselves create the desired artificial market conditions.

SFA 204. Penalties

 Any person who contravenes any of the provisions of this Division shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 7 years or to both.

No proceedings shall be instituted against a person for an offence in respect of a contravention of this Division after a court has made an order against him for the payment of a civil penalty under section 232 in respect of the contravention.

Electronic Trading Risks

Live Prices

  • Speed and quality of internet connection will affect the performance and accuracy of live prices in POEMS internet.
  • Broadband internet connection is recommended for online trading.


  • Internet Trading Password must be kept confidential at all times
  • Regularly change your Internet Trading Password
  • Password must be memorized and never write your password down
  • Always clear your browser’s cache and history after each session so that your account information is removed.
  • You are advised not to use the “Auto Complete” function of your browser to save your User ID and Password. This function stores and lists possible matches from entries that you have typed previously.

Virus, Spywares and Adwares

  • Always install your computer/ mobile devices with the latest anti-virus software and Spyware program.
  • Regularly scan your computer/ mobile devices to quarantine and delete any Virus / Spyware / Adware on your computer.
  • Avoid downloading programs and email attachments from suspicious unknown sources.


  • Phishing is an attempt to criminally and fraudulently acquire sensitive information, such as usernames, passwords and credit card details, by masquerading as a trustworthy entity in an electronic communication.
  • Phishing is typically carried out by email or instant messaging and often directs users to enter details at a website.
  • To prevent yourself from phishing, NEVER reveal your password to anyone. Be suspicious of any email or instant message asking you to provide sensitive account information.
  • If you receive such emails or instant message, do not reply or click on the links in the email or instant message.

Secure Your Wireless Network

  • Wireless networking works by sending information over radio waves, it can be more vulnerable to intruders. You need to take additional steps to keep your network secure.
  • Make your own unique and difficult-to-guess SSID (Service Set Identifier)
  • Enable WPA2 security protocol on your wireless router
  • Change the default administrator password and username for your wireless router

Other Internet Trading Risk

While trading online, you may encounter situations such as delays in order transmission and confirmation of order execution, or being unable to withdraw erroneous orders in time due to the speed of electronic trading. In such circumstances, you may contact the Dealing Desk for assistance.

Do not leave your Internet Trading Screen unattended and be aware of the danger of unauthorised access to a Customer's Internet Trading account. For preventive security measures in relation to password protection, you may refer to section 2.2. 

 Downtime Actions

In the case of POEMS Internet or POEMS Mobile downtime, kindly contact our Customer Experience Hotline at 6531 1555 or your Trading representative for more information.