Securities and Futures (Licensing and Conduct of Business) (Amendment) Regulations 2003

No. S 543

Securities and Futures Act

(Chapter 289)

Securities and Futures (Licensing and Conduct of Business) (Amendment) Regulations 2003

In exercise of the powers conferred by sections 85, 87A, 93, 95, 96, 100, 102, 104, 123, 337(1) and 341 of the Securities and Futures Act, the Monetary Authority of Singapore hereby makes the following Regulations:

Citation and commencement

1. These Regulations may be cited as the Securities and Futures (Licensing and Conduct of Business) (Amendment) Regulations 2003 and shall come into operation on 22nd December 2003.

Amendment of regulation 2

2. Regulation 2 of the Securities and Futures (Licensing and Conduct of Business) Regulations 2002 (G.N. No. S 457/2002) (referred to in these Regulations as the principal Regulations) is amended by inserting, immediately after the definition of “bond”, the following definition:

“ “electronic record” has the same meaning as in section 2 of the Electronic Transactions Act (Cap. 88);”.

New regulation 3A

3. The principal Regulations are amended by inserting, immediately after regulation 3, the following regulation:

“Temporary Representative’s Licence

3A.—(1) For the purpose of section 87A(6)(a) of the Act, the Authority shall not grant a temporary representative’s licence to any applicant who has held a temporary representative’s licence for a period which exceeds or for periods which together exceed 6 months, within the period of 24 months before the date of his application for the first-mentioned licence.

(2) For the purpose of section 87A(6)(b) of the Act, the holder of a capital markets services licence supporting an application for a temporary representative’s licence shall furnish to the Authority an undertaking in the form set out in Part XI of Form 4A.

(3) The holder of a capital markets services licence shall comply with the undertaking given by it under paragraph (2).”.

Amendment of regulation 5

4. Regulation 5 of the principal Regulations is amended by inserting, immediately after the words “Part III or VI of Form 3”, the words “or in Part III or VII of Form 4A”.

Amendment of regulation 6

5. Regulation 6 of the principal Regulations is amended —

(a)

by deleting paragraph (1) and substituting the following paragraphs:

“(1) The application fees payable to the Authority under section 84(3) of the Act shall be as follows:

(a)	in respect of an application for a capital markets services licence, $1,000;
(b)	in respect of an application for the renewal of a capital markets services licence, $500;
(c)	in respect of an application for a representative’s licence, $200;
(d)	in respect of an application for the renewal of a representative’s licence (other than a temporary representative’s licence), $100.

(1A) The application fees payable to the Authority under section 90(2) of the Act shall be as follows:

(a)	in respect of an application for the variation of a capital markets services licence, $500;
(b)	in respect of an application for the variation of a representative’s licence, $100.”; and

(b)

by deleting paragraph (4) and substituting the following paragraphs:

“(4) Subject to paragraph (4A), the licence fee payable to the Authority under section 85 of the Act by the holder of a representative’s licence shall be as follows:

(a)

where the licence relates to dealing in securities and the principal is —

(i)	a member of the Singapore Exchange Securities Trading Limited, $800; or
(ii)	any other person, $300;

(b)

where the licence relates to fund management, $300;

(c)

where the licence relates to advising on corporate finance, $300;

(d)

where the licence relates to trading in futures contracts, $300;

(e)

where the licence relates to leveraged foreign exchange trading, $300.

(4A) The licence fee referred to in paragraph (4) shall be —

(a)	in the case of a temporary representative’s licence, for the duration of the licence; or
(b)	in any other case, for a period of one year or part thereof.”.

Amendment of regulation 9

6. The principal Regulations are amended by renumbering regulation 9 as paragraph (1) of that regulation, and by inserting immediately thereafter the following paragraph:

“(2) In this regulation, “representative’s licence” does not include a temporary representative’s licence.”.

Amendment of regulation 10

7. Regulation 10 of the principal Regulations is amended by inserting, immediately after paragraph (4), the following paragraph:

“(5) This regulation shall not apply to the holder of a temporary representative’s licence.”.

Amendment of regulation 11

8. Regulation 11 (6) of the principal Regulations is amended by inserting, immediately after the words “the holder of a representative’s licence”, the words “(other than a temporary representative’s licence)”.

Amendment of regulation 12

9. Regulation 12 (1) of the principal Regulations is amended by deleting the words “in Singapore”.

Amendment of regulation 23

10. Regulation 23 (1) of the principal Regulations is amended by deleting sub-paragraph (b) and substituting the following sub-paragraph:

“(b)

to ensure the continued maintenance of that account in a case where it is maintained with —

(i)	a financial institution specified in regulation 17 (1); or
(ii)	a custodian specified in regulation 17 (2).”.

Amendment of regulation 39

11. Regulation 39 of the principal Regulations is amended —

(a)

by deleting sub-paragraph (c) of paragraph (1); and

(b)

by inserting, immediately after paragraph (2), the following paragraphs:

“(3) Subject to paragraph (4), the holder of a capital markets services licence to deal in securities, trade in futures contracts or carry out leveraged foreign exchange trading shall —

(a)

as soon as practicable upon the receipt of a customer’s order for —

(i)	securities quoted on a securities exchange, an overseas securities exchange or a recognised trading system provider;
(ii)	futures contracts; or
(iii)	foreign exchange in connection with leveraged foreign exchange trading,

or the receipt of any amendment or cancellation of such an order, prepare and keep a written record of —

“(A)	the particulars of the customer’s instruction in the order;
(B)	the date and time of receipt of the order, amendment or cancellation; and
(C)	where the order, amendment or cancellation is transmitted to a member of a securities exchange, a futures exchange, an overseas securities exchange or an overseas futures exchange, or to the trading floor of such exchange, the date and time the order, amendment or cancellation is transmitted;

“(b)

as soon as practicable upon the receipt of a customer’s order for other securities, or the receipt of any amendment or cancellation of such an order, prepare and keep a written record of —

(i)	the particulars of the customer’s instruction in the order; and
(ii)	the date of receipt of the order or of any amendment or cancellation of the order; and

(c)

as soon as practicable upon the execution of a customer’s order for securities, futures contracts or foreign exchange in connection with leveraged foreign exchange trading, prepare and keep a written record of the particulars of the transaction and —

(i)

in the case of an order for —

(A)	securities quoted on a securities exchange, an overseas securities exchange or a recognised trading system provider;
(B)	futures contracts; or
(C)	foreign exchange in connection with leveraged foreign exchange trading,

the date and time of execution of the order or amended order, if any; or

(ii)

in the case of an order for other securities, the date of execution of the order or amended order, if any.

(4) Paragraph (3) shall not apply to the holder of a capital markets services licence to trade in futures contracts in respect of a transaction by an arbitrageur or a market-maker for the purchase or sale of futures contracts specified by a futures exchange if —

(a)	the arbitrageur or market-maker, as the case may be, has given prior written consent for the holder not to prepare and keep the records as required in paragraph (3);
(b)	the transaction is executed on the trading floor; and
(c)	the transaction is entered into in accordance with the business rules or practices of the futures exchange.

(5) In this regulation —

“arbitrageur” means a person who —

(a)	is appointed, approved or registered by a futures exchange as an arbitrageur in respect of futures contracts specified by the futures exchange; and
(b)	purchases or sells any futures contract specified by the futures exchange in a futures market together with an off-setting sale or purchase of the same or equivalent contract in a different market at as nearly the same time as practicable for the purpose of taking advantage of a difference in prices in the 2 markets;

“market-maker” means a person who —

(a)	is appointed, approved or registered by a futures exchange as a market-maker in respect of futures contracts specified by the futures exchange;
(b)	enters into transactions for the purchase or sale of futures contracts specified by the futures exchange for his own account;
(c)	regularly publishes bona fide competitive bid and offer quotations in respect of futures contracts specified by the futures exchange; and
(d)	is ready, willing and able to effect transactions at his quoted prices with other persons in respect of futures contracts specified by the futures exchange.”.

Amendment of regulation 40

12. Regulation 40 of the principal Regulations is amended —

(a)

by deleting paragraph (1) and substituting the following paragraphs:

“(1) The holder of a capital markets services licence shall on a monthly basis furnish to each customer a statement of account containing the particulars referred to in paragraph (2).

(1A) Paragraph (1) shall not apply to the holder where —

(a)

there is no change to any of those particulars since the date on which the last statement of account was made up to; or

(b)

the customer is an accredited investor, or a related corporation of the holder, and —

(i)	the holder has made available to the customer, on a real-time basis, those particulars in the form of electronic records stored on an electronic facility and the customer has consented to those particulars being made available to him in this manner; or
(ii)	the customer has requested, in writing, not to receive the statement of account on a monthly basis from the holder.”;

(b)

by inserting, immediately after the words “monthly statement period” in paragraph (2)(f), the words “, unless the detailed account of financial charges and credits has been included in any contract note or tax invoice issued by the holder to the customer”; and

(c)

by deleting paragraphs (3) and (4) and substituting the following paragraphs:

“(3) Subject to paragraph (4), the holder of a capital markets services licence shall furnish to each customer, at the end of every quarter of a calendar year, a statement of account containing, where applicable, the assets, futures positions, leveraged foreign exchange positions and cash balances (if any) of the customer as at the end of that quarter.

(4) Paragraph (3) shall not apply to the holder of a capital markets services licence where —

(a)	such particulars have been furnished to the customer by the holder in accordance with paragraph (1) for the last month of that quarter; or
(b)	the holder is exempted from complying with paragraph (1) by virtue of the application of paragraph (1A)(b).”.

Deletion of regulation 44

13. Regulation 44 of the principal Regulations is deleted.

New regulation 50A

14. The principal Regulations are amended by inserting, immediately after regulation 50, the following regulation:

“Exemption for transactions through member of exchange

50A. Section 118 of the Act shall not apply to the holder of a capital markets services licence in respect of any transaction of sale or purchase of securities or futures contracts effected by the holder through a member of —

(a)	a securities exchange or overseas securities exchange; or
(b)	a futures exchange or overseas futures exchange,

if the holder gives, or arranges with that member to give, to the other party to the transaction a contract note or a copy thereof issued by that member in respect of the transaction in accordance with the rules of that exchange or with any written law governing the issuance of contract notes by members of that exchange.”.

Amendment of regulation 54

15. Regulation 54 (1) of the principal Regulations is amended by deleting the words “regulations 44 to 47” and substituting the words “regulations 39 (3), (4) and (5) and 45 to 47”.

Amendment of regulation 55

16. Regulation 55 of the principal Regulations is amended by deleting the words “regulation 4” and substituting the words “regulations 3A (3), 4”.

Amendment of First Schedule

17. The First Schedule of the principal Regulations is amended —

(a)

by inserting, immediately after the fourth item (relating to the application for the renewal of a representative’s licence under section 84(1) and (4)) under the heading “LIST OF FORMS”, the following item:

Section 87A(1) and (6) (b) and regulation 3A (2)

Application for a temporary representative’s licence under section 87A(1) and undertaking by holder of capital markets services licence

(b)

by inserting, immediately after Form 4, the following Form: