PART I | 1. This Act may be cited as the Futures Trading Act. |
2. In this Act, unless the context otherwise requires —“accredited investor” means —| (a) | an individual whose net personal assets exceed $5 million or its equivalent in value in foreign currencies; or | | (b) | a corporation with net assets exceeding $10 million in value or its equivalent in value in foreign currencies as determined in accordance with the most recent audited balance-sheet of the corporation; |
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| “auditor” means an approved company auditor as defined in section 4 of the Companies Act [Cap. 50]; |
| “Authority” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act [Cap. 186]; |
“business rules”, in relation to a body corporate that maintains or proposes to maintain a futures market, means the rules, regulations and by-laws, by whatever name called, governing the activities and conduct of —| (a) | the body corporate and its members; | | (b) | its clearing house; and | | (c) | other persons in relation to the futures market, |
| whether those rules, regulations or by-laws are made by the body corporate or are contained in the Memorandum and Articles of Association of the body corporate or altered or supplemented by the Authority pursuant to section 6(4); |
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“clearing house”, in relation to a futures market, means a body corporate, or an association or organisation forming part of a Futures Exchange, that —| (a) | clears and settles futures contracts; and | | (b) | makes adjustments to the contractual obligations arising out of those futures contracts; |
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“commodity”, in relation to a futures contract, means —| (a) | a financial instrument; and | | (b) | gold and such other items, goods, articles, services, rights and interests, which are the subject of futures contracts, as the Authority may by order prescribe; |
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“connected person”, in relation to —| (a) | an individual, means —| (i) | the individual’s spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, mother, brother or sister; and | | (ii) | a firm or a corporation in which the individual or any of the persons mentioned in sub-paragraph (i) has control of not less than 20% of the voting power in the firm or corporation, whether such control is exercised individually or jointly; |
| | (b) | a firm or a corporation, means another firm or corporation in which the first-mentioned firm or corporation has control of not less than 20% of the voting power in that other firm or corporation; |
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| “corporation” has the same meaning as in the Companies Act [Cap. 50]; |
| “customer” means a person on whose account a futures broker carries on trading in futures contracts or leveraged foreign exchange trading; |
| “director” has the same meaning as in the Companies Act; |
“Exchange” or “Futures Exchange” means —| (a) | the Singapore International Monetary Exchange Ltd.; or | | (b) | a body corporate —| (i) | that provides or proposes to provide the physical facilities necessary for trading in futures contracts; and | | (ii) | that maintains or proposes to maintain a futures market that is approved by the Authority under section 4; |
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| “financial instruments” includes currencies, interest rate instruments, share indices, a group or groups of share indices and such other financial instruments as the Authority may by order prescribe; |
| “financial year” has the same meaning as in the Companies Act [Cap. 50]; |
| “floor broker” means an individual who is employed by, or acts for, a futures broker for the purpose of entering into contracts on the floor of a Futures Exchange on behalf of the futures broker; |
“foreign exchange market” means —| (a) | a market, whether in Singapore or elsewhere, at which foreign exchange trading regularly takes place; or | | (b) | an electronic system, whether operating in Singapore or elsewhere, through which foreign exchange trading is conducted; but excludes an electronic facility which merely provides price or other information on any foreign exchange market (whether the facility is part of or carried on in conjunction with the provision of any other information not related to foreign exchange trading) and which does not permit users of the facility to channel orders for, execute transactions in, or make a market in, foreign exchange transactions; |
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| “foreign exchange trading” has the meaning given to it in section 2A; |
“futures broker” means any person, whether as principal or agent, who —| (a) | carries on the business of soliciting or accepting orders, for the purchase or sale of any commodity under a futures contract on any Futures Exchange or futures market whether or not that person accepts any money, securities or property (or extends credit in lieu thereof) to margin, guarantee or secure any contract or transaction that may result therefrom; or | | (b) | carries on the business of leveraged foreign exchange trading, |
| whether the business is part of, or is carried on in conjunction with, any other business; |
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| “futures broker’s representative” means any person in the direct employment of, or acting for, or by arrangement with, a futures broker who performs any of the functions of a futures broker (other than work ordinarily performed by accountants, clerks or cashiers) in connection with trading in futures contracts or leveraged foreign exchange trading, whether his remuneration is by way of commission, wages or otherwise; and includes any director, officer or employee of a corporation who performs for that corporation any of those functions (whether his remuneration is by way of commission, wages or otherwise); |
“futures contract” means a contract the effect of which is that —| (a) | one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time pursuant to terms and conditions set forth in the business rules or practices of a Futures Exchange or a futures market; or | | (b) | the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity at the time of the making of the contract and at a specified future time, such difference being determined in accordance with the business rules or practices of the Exchange or futures market at which the contract is made, |
| and includes a futures option transaction; |
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“futures market” means —| (a) | a market, a Futures Exchange or other place, whether in Singapore or elsewhere, at which trading in futures contracts regularly takes place; or | | (b) | an electronic system, whether operating in Singapore or elsewhere, through which trading in futures contracts is carried out; but excludes an electronic facility which merely provides price or other information on futures contracts (whether the facility is part of or carried on in conjunction with the provision of any other information not related to futures contracts) and which does not permit users of the facility to channel orders for, execute transactions in, or make a market in, futures contracts; |
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| “futures option transaction” means a transaction which gives a person a right, acquired for a consideration, to buy or sell within a specified period of time a specified amount of commodity or a specified futures contract at a specified price in accordance with the business rules or practices of a Futures Exchange or a futures market at which the transaction is made; |
| “futures pool operator” means any person who carries on a business, in the nature of a unit trust or other interest to which Division 6 of Part IV of the Companies Act [Cap. 50] applies, and who in connection therewith accepts or receives from other persons funds, security or property, either directly or through capital contributions, the sale of shares or other forms of security or otherwise for the purpose of trading in futures contracts, foreign exchange trading or leveraged foreign exchange trading but does not include such persons as the Authority may by regulations prescribe; |
| “futures pool operator’s representative” means any person in the direct employment of, or acting for, or by arrangement with, a futures pool operator, who performs for such futures pool operator any of the functions of a futures pool operator; |
“futures trading adviser” means any person who —| (a) | carries on the business of advising other persons (directly or indirectly, through any publication or writing, or by whatever means or media) concerning futures contracts, foreign exchange trading or leveraged foreign exchange trading, including advice on whether to engage in trading in futures contracts, foreign exchange trading or leveraged foreign exchange trading; | | (b) | as part of a regular business, issues or promulgates any analysis or report concerning futures markets or foreign exchange markets; or | | (c) | pursuant to a contract or an arrangement with a client, undertakes on behalf of the client (whether on a discretionary authority granted by the client or otherwise) trading in futures contracts, foreign exchange trading or leveraged foreign exchange trading for the purposes of managing the client’s funds, |
| (i) | a bank that is licensed under the Banking Act [Cap. 19] or a merchant bank approved under the Monetary Authority of Singapore Act [Cap. 186]; | | (ii) | an accountant or advocate and solicitor in practice whose carrying on of that business is solely incidental to the practice of his profession; | | (iii) | a futures broker or futures pool operator (referred to in this sub-paragraph as the licensee) so long as any activity referred to in paragraph (a), (b) or (c) carried out by the licensee is wholly incidental to the carrying on of the business for which he is so licensed; | | (iv) | a person who carries on the business of printing or publishing a newspaper and is the holder of a permit therefor issued under the Newspaper and Printing Presses Act [Cap. 206] (referred to in this definition as the proprietor) and the author of any advice, analysis or report published in that newspaper (referred to in this definition as the author) where —| (A) | insofar as the newspaper is distributed generally to the public, it is distributed only to subscribers to, and purchasers of, the newspaper for value; | | (B) | the advice is given or the analysis or report is issued or promulgated only through that newspaper; | | (C) | the proprietor receives no commission or other consideration for giving the advice or for issuing or promulgating the analysis or report other than the consideration received from the sale of the newspaper and advertisements placed in the newspaper; | | (D) | the author of the advice, analysis or report receives no commission or other consideration in respect of the advice, analysis or report other than the consideration received from the proprietor of the newspaper; and | | (E) | the proprietor and the author of the advice, analysis or report has no interest, directly or indirectly, in any futures contract referred to in the advice, analysis or report; and |
| | (v) | such other person carrying on such business as the Authority may by regulations prescribe, so long as any activity referred to in paragraph (a), (b) or (c) carried out by that person is wholly incidental to the carrying on of such prescribed business; |
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| “futures trading adviser’s representative” means any person in the direct employment of, or acting for, or by arrangement with, a futures trading adviser, who performs for that futures trading adviser any of the functions of a futures trading adviser (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of commission, wages or otherwise; and includes any director, officer or employee of a corporation who performs for that corporation any of those functions (whether or not his remuneration is by way of commission, wages or otherwise); |
| “leveraged foreign exchange trading” has the meaning given to it in section 2A; |
| “member” means a person who holds membership of any class or description of a Futures Exchange whether or not he holds any share in the share capital of the Exchange; |
| “officer” has the same meaning as in the Companies Act [Cap. 50]; |
| “related corporation” has the same meaning as in the Companies Act; |
“trading in futures contracts”, in relation to any person, whether acting as principal or agent, means —| (a) | making or offering to make an agreement with any other person or inducing or attempting to induce any other person to enter into an agreement for the purchase or sale of a futures contract; or | | (b) | soliciting or accepting any order for, or otherwise dealing in, a futures contract. |
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| Meaning of foreign exchange trading and leveraged foreign exchange trading |
2A.—(1) In this Act, unless the context otherwise requires and subject to subsection (2) —| “foreign exchange trading” means the act of entering into or offering to enter into, or inducing or attempting to induce a person to enter into or offer to enter into, a contract or an arrangement whereby a person undertakes to exchange currency at an agreed rate of exchange with another person whether the currency exchange is effected at the same time or at a future date and whether by way of delivery of an amount of currency for another currency, by way of crediting the account of the other person with an amount of another currency, by way of settlement or set-off between 2 or more persons or otherwise; |
“leveraged foreign exchange trading” means —| (a) | the act of entering into or offering to enter into, or inducing or attempting to induce a person to enter into or offer to enter into, a contract or an arrangement on a margin basis (other than a contract or an arrangement that is made on a Futures Exchange or a futures market) whereby a person undertakes as determined by the terms and conditions of the contract or arrangement —| (i) | to make an adjustment between himself and another person according to whether a currency is worth more or less, as the case may be, in relation to another currency; | | (ii) | to pay an amount of money determined or to be determined by reference to the change in value of a currency in relation to another currency; or | | (iii) | to deliver to another person at an agreed future time an agreed amount of currency at an agreed price; |
| | (b) | the provision by any person referred to in paragraph (a) of any advance, credit facility or loan, directly or indirectly, to facilitate an act of the description referred to in that paragraph; or | | (c) | the act of entering into or offering to enter into, or inducing or attempting to induce a person to enter into, an arrangement with another person (whether on a discretionary basis or otherwise) to enter into any contract to facilitate an act of the description mentioned in paragraph (a) or (b). [9/95] |
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(2) For the purposes of the definitions of “foreign exchange trading” and “leveraged foreign exchange trading” in subsection (1) —| (a) | the definitions shall not include any act performed for or in connection with a contract or an arrangement or a proposed contract or proposed arrangement —| (i) | arranged by a bank that is licensed under the Banking Act [Cap. 19] or a merchant bank approved under the Monetary Authority of Singapore Act [Cap. 186]; | | (ii) | by any person belonging to such class of persons, or carrying on such class or description of business as may be prescribed by the Authority; or | | (iii) | which falls within the definition of “futures contract” in section 2; and |
| | (b) | “on a margin basis” means the first-mentioned person referred to in the definition of “leveraged foreign exchange trading” entering into the contract or arrangement referred to therein by providing to the offeror or his agent with money, securities, property or other collateral which represents only a part of the value of the contract or arrangement to be entered into by him. [9/95] |
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| (3) The Authority may by order modify the definition of “foreign exchange trading” or “leveraged foreign exchange trading” by applying it to such other financial instrument or unit of account as may be prescribed and such order may provide for any necessary modification or adaptation to that definition. [9/95] |
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