The Securities and Futures Act (“SFA”) is a broad-ranging statute which governs Singapore’s capital markets and financial investments sector. The SFA puts in place rules and regulations concerning, inter alia, markets, market operators, clearing facilities, intermediaries and representatives. The scope of the SFA includes the following:
(a) Part II: Markets
(b) Part IIA: Trade Repositories
(c) Part III: Clearing Facilities
(d) Part IIIAA: Central Depository System
(e) Part IIIA: Approved Holding Companies
(f) Part IV: Holders of Capital Markets Services Licence and Representatives
(g) Part VIA Reporting of Derivatives Contracts
(h) Part VIB: Clearing of Derivatives Contracts
(i) Part VII: Disclosure of Interests
(j) Part VIII: Securities Industry Council and Take-over Offers
(k) Part IX: Supervision and Investigation
(l) Part X: Assistance to Foreign Regulatory Authorities
(m) Part XI: Investor Compensation Scheme
(n) Part XII: Market Conduct
(o) Part XIII: Offers of Investments
Part IV of the SFA establishes a Capital Markets Services License (CMSL) regime. Subject to certain licensing exemptions, persons who wish to carry out regulated activities must be holders of a CMSL. Activities which are regulated and require licensing under the SFA include the following:
(a) Dealing in securities;
(b) Trading in futures contracts;
(c) Leveraged foreign exchange trading;
(d) Advising on corporate finance;
(e) Fund management;
(f) Real estate investment trust management;
(g) Securities financing; and
(h) Providing custodial services for securities.
Part XII of the SFA addresses prohibited market conduct including, inter alia, false trading and market rigging, market manipulation, and insider trading.
Part XIII of the SFA governs the offering of financial products including shares and debentures, business trusts, collective investment schemes.
In January 2017, Parliament passed the Securities and Futures (Amendment) Bill 2016 which introduced significant changes to the SFA. Some of the key amendments include the extension of the scope of the SFA to over-the-counter derivatives, enhanced regulatory safeguards for retail investors, and the implementation of a stronger enforcement regime against market misconduct.