Futures Stress Testand Concentration Rules

Account Beta Test

Please carefully read the below requirements for your futures account. Questions? Call a Client Services representative at +65 6823 2250.

Each day a broad market stress test is conducted on accounts based on the beta weight of the account’s equity and equity index futures positions, using the S&P 500 Index (SPX) as the benchmark. This is a tail risk liquidity test to prevent over leveraging of accounts in an extreme market event. The maximum theoretical loss based on a +/-20% move, +10% move or a -12% move in SPX is then compared to the liquidation value of the account. An account will be set to closing transactions only, meaning new securities and futures positions cannot be opened, if the resulting loss for Profit/Loss (P/L) Day in the portfolio exceeds one of the following:

• Two times the net liquidation value at the DOWN 20% level, • Three times the net liquidation value at the UP 20% level, • One time the net liquidation value at the DOWN 12% level, or • One time the net liquidation value at the UP 10% level

Note: A theoretical P/L Day loss that exceeds three times the Net Liquidation Value at the DOWN 20% level will result in the client having to take action the day of the breach to bring the DOWN 20% theoretical P/L Day loss under two times the net liquidation value. A theoretical P/L Day loss that exceeds four times the Net Liquidation Value at the UP 20% level will result in the client having to take action the day of the breach to bring the theoretical loss back under three times the net liquidation value.

You can perform this test any time on your account in the thinkorswim® trading software by going to the Analyze tab > Risk Profile.

Futures Stress Test and Concentration Rules

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1. Once there, enter “SPX” in the symbol box and click Enter on your keyboard. 2. Under Positions and Simulated Trades, select the box that states

“Single Symbol” and change it to Portfolio, Beta Weighted 3. Under the chart, select the menu to the right of Price Slices, choose Set

slices > SPX Beta Test 4. Expand Price Slices to view the P/L Day information for your account

The above example shows an account with $100,000.00 net liquidation value. The P/L Day for the portfolio based on a 20% downward move in SPX is ($366,750.00) causing the account to be in violation as the P/L Day is more than three times the net liquidation value. In this scenario, immediate action would be required to bring the theoretical loss below two times the net liquidation value. This can be done by bringing in additional funds, reducing risk through liquidation of positions, or market appreciation.

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Futures Tail Risk

Each day a stress test is conducted on futures accounts holding commodity futures options positions. This is a tail risk liquidity test to prevent over leveraging of accounts in a “Black Swan” event. The test will be based on a +/- 3 Expected Price Range (EPR) move in the underlying future. Emails will be sent to the affected accounts daily confirming the percent move that will be used to stress the position.

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Note: An account with a theoretical P/L Day loss that exceeds two times the Net Liquidation Value Up or Down 3 EPR will be restricted to closing transactions only for futures trading. A theoretical P/L Day loss that exceeds three times the net liq-uidation value Up or Down 3 EPR will result in the client having to take action the day of the breach to bring the theoretical P/L Day loss back under three times the net liquidation value.

You can perform this test any time on your account in the thinkorswim trading software by going to the Analyze tab > Risk Profile.

1. Once there, enter the symbol you are trading in the symbol box and click Enter on your keyboard.

2. Under Positions and Simulated Trades, select “Single Symbol” from the drop down box.

3. Under the chart, set price slices to up and down the percentages that are emailed or change “percent(%)” to “EPR” and choose 3.

4. Expand Price Slices to view the P/L Day information for your account.

Futures Tail Risk (cont.)

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Daily, a test is conducted on futures accounts holding short options positions. Accounts that are not capitalized to have at least $1,000 per net short equity index futures option OR $300 per net short commodity futures option will be restricted to closing transactions only for futures trading.

• Applies to accounts with large futures margin requirements, generally $1,000,000 or greater in a single product or multiple correlated products.

• If an account reaches ratio of 1.25 or higher when looking at regular futures margin requirement/net liquidating value, immediate liquidation may be required to cover deficiencies.

• No end of day deficiencies, accounts must finish every day above initial margin requirements (house requirement if applicable) based on official daily settlement prices and regulatory margin calls will not be permitted.

Short Option Liquidity:

Futures Outright Concentration Rules:

These rules may be subject to change anytime, based on market events or liquidity, without any notification.

Please note that TD Ameritrade Singapore Pte. Ltd. reserves the right to liquidate a futures position at any time, without notice.

Examples provided for illustrative and educational use only and are not a recommendation or solicitation to buy, sell or hold any specific security or utilize any specific strategy.

Greater leverage creates greater losses in the event of adverse market movements.

Futures trading is speculative, and is not suitable for all investors. Please read the Risk Disclosure for Futures and Options prior to trading futures products.

If you’re interested in learning more about futures, it’s important that you expand your investing education before you make investments.

Trading privileges subject to review and approval. Not all clients will qualify.

Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC).

TD Ameritrade Singapore Pte. Ltd. (Reg. No. 200902152D) is licensed by the Monetary Authority of Singapore and does not provide tax, legal or investment advice or recommendations. TD Ameritrade Futures & Forex LLC is a futures commission merchant and is the contracted custodian of TD Ameritrade Singapore Pte. Ltd. for U.S. Futures markets. Products and services offered in Singapore are provided by TD Ameritrade Singapore Pte. Ltd. and nothing in the published material is an offer or solicitation to conduct business in any other jurisdiction. TD Ameritrade Singapore Pte. Ltd. trading as TD Ameritrade.

TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.