SECOND SCHEDULE
Regulation 14
Exemptions from sections 82(1) and 99B(1) of Act
[S 709/2010 wef 26/11/2010]
Definitions
1.  In this Schedule —
“agent”, in relation to a member of Lloyd’s, “Lloyd’s”, “member of Lloyd’s” and “Service Company” have the same meanings as in regulation 2 of the Insurance (Lloyd’s Asia Scheme) Regulations (Rg 9);
“base capital”, in relation to a corporation, means the sum of —
(a)the following items in the latest accounts of the corporation:
(i)paid-up ordinary share capital; and
(ii) paid-up irredeemable and non-cumulative preference share capital; and
[S 170/2013 wef 28/03/2013]
(b)any unappropriated profit or loss in the latest audited accounts of the corporation,
less any interim loss in the latest accounts of the corporation and any dividend that has been declared since the date of the latest audited accounts of the corporation;
[S 385/2012 wef 07/08/2012]
“block futures contract” means a futures contract which is —
(a)privately negotiated between 2 parties in accordance with the business rules or practices of an organised market; and
(b)entered into between those 2 parties in accordance with the business rules or practices of that organised market;
[S 667/2018 wef 08/10/2018]
“connected person”, in relation to any individual, means —
(a)his spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister; or
(b)a firm or corporation in which he or any of the persons referred to in paragraph (a) has control of not less than 50% of the voting power, whether such control is exercised individually or jointly;
“designated market-maker” means a corporation who —
(a)carries on business to deal in designated products as a market-maker; and
[S 667/2018 wef 08/10/2018]
(b)is approved as a designated market-maker by the Singapore Exchange Securities Trading Limited, in accordance with its business rules;
[Deleted by S 667/2018 wef 08/10/2018]
“designated products” means —
(a)exchange traded fund interests; or
(b)structured warrants,
which have received approval in-principle for listing and quotation on, or are listed for quotation on, the Singapore Exchange Securities Trading Limited;
[S 667/2018 wef 08/10/2018]
“exchange traded fund interest” means any unit in a collective investment scheme concerned with the acquisition, holding, management or disposal of a portfolio of predetermined constituent assets in predetermined proportions, being a unit that is —
(a)listed for quotation, or has received approval in-principle for listing and quotation, on any approved exchange; and
[S 667/2018 wef 08/10/2018]
(b)created and redeemed as part of a block of units in the collective investment scheme in exchange for the constituent assets in the portfolio;
[S 667/2018 wef 08/10/2018]
“Finance and Treasury Centre” means an approved Finance and Treasury Centre under section 43E of the Income Tax Act 1947;
[S 226/2023 wef 31/12/2021]
“headquarters company” means an approved headquarters company under section 43D of the Income Tax Act 1947;
[S 226/2023 wef 31/12/2021]
[Deleted by S 667/2018 wef 08/10/2018]
“investment contract” means any contract, scheme or arrangement which in substance and irrespective of the form thereof involves the investment of money in or under such circumstances that the investor acquires or may acquire an interest in or right in respect of property which under or in accordance with the terms of investment will, or may at the option of the investor, be used or employed in common with any other interest in or right in respect of property acquired in or under like circumstances;
“irredeemable and non-cumulative preference share capital” means preference share capital consisting of preference shares that satisfy all of the following requirements:
(a)the principal of the shares is perpetual;
(b)the shares are not callable at the initiative of the issuer of the shares or the shareholders, and the principal of the shares is never repaid outside of liquidation of the issuer, except in the case of a repurchase or other manner of reduction of share capital that is initiated by the issuer and permitted under written law; and
(c)the issuer has full discretion to cancel dividend payments, and —
(i)the cancellation of dividend payments is not an event of default of the issuer under any agreement;
(ii)the issuer has full access to cancelled dividend payments to meet its obligations as they fall due; and
(iii)the cancellation of dividend payments does not result in any restriction being imposed on the issuer under any agreement, except in relation to dividend payments to ordinary shareholders;
[S 170/2013 wef 28/03/2013]
“market-maker” means a corporation which —
(a)through a facility, at a place or otherwise, regularly quotes the prices at which it proposes to acquire or dispose of designated products for its own account; and
[S 667/2018 wef 08/10/2018]
(b)is ready, willing and able to effect transactions in the designated products at the quoted prices;
[S 667/2018 wef 08/10/2018]
“net head office funds”, in relation to a foreign company, means the net liability of the Singapore branch of that foreign company to its head office and any other branches outside of Singapore;
[S 385/2012 wef 07/08/2012]
“order-filler” means an individual who is registered as such with an approved exchange for the sole purpose of entering into contracts on the floor of that approved exchange on behalf of members of that approved exchange;
[S 667/2018 wef 08/10/2018]
“qualified arrangement” means any of the arrangements referred to in paragraphs (i) to (xii) of the definition of “collective investment scheme” in section 2(1) of the Act;
“qualified investor” means —
(a)an accredited investor, other than —
(i)one who is a participant in a collective investment scheme mentioned in paragraph (b);
(ii)one who is a holder of a unit in a closed-end fund or in an arrangement mentioned in paragraph (aa) of the definition of “closed-end fund” in section 2(1) of the Act as mentioned in paragraph (c);
(iii)one which is a corporation mentioned in section 4A(1)(a)(ii) of the Act or an entity mentioned in regulation 3(c) of the Securities and Futures (Classes of Investors) Regulations 2018 (G.N. No. S 665/2018) —
(A)which is related to or controlled by a person exempted from the requirement to hold a capital markets services licence to carry on business in fund management under paragraph 5(1)(i), or a key officer or substantial shareholder of such person; and
(B)the shares or debentures of which are, after 28 May 2008, the subject of an offer or invitation for subscription or purchase made to any person who is not an accredited investor; or
(iv)a corporation or an entity which is a collective investment scheme or a closed-end fund the units of which are, after 28 May 2008, the subject of an offer or invitation made to any person who is not an accredited investor;
(b)a collective investment scheme the units of which are the subject of an offer or invitation for subscription or purchase made —
(i)in Singapore only to accredited investors, to institutional investors, or to both accredited investors and institutional investors; or
(ii)elsewhere if, after 28 May 2008, such offer or invitation is made only to accredited investors (or investors in an equivalent class under the laws of the country or territory in which the offer or invitation is made), to institutional investors, or to both accredited investors and institutional investors;
(c)a closed-end fund or an arrangement mentioned in paragraph (aa) of the definition of “closed-end fund” in section 2(1) of the Act, the units of which are the subject of an offer or invitation for subscription or purchase made only to accredited investors (or investors in an equivalent class under the laws of the country or territory in which the offer or invitation is made), to institutional investors, or to both accredited investors and institutional investors;
(d)an institutional investor, other than a collective investment scheme; or
(e)a limited partnership, where the limited partners comprise solely of accredited investors (or investors in an equivalent class under the laws of the country or territory in which the partnership is formed), of institutional investors, or of both accredited investors and institutional investors;
[S 667/2018 wef 08/10/2018]
“quote” means to display or provide on an approved exchange information concerning the particular prices or particular consideration at which offers or invitations to sell, purchase or exchange issued specified products are made on an organised market of that approved exchange, being offers or invitations that are intended or may reasonably be expected to result, directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange issued specified products;
[S 667/2018 wef 08/10/2018]
“relevant offence” means —
(a)an offence, whether under the law of Singapore or elsewhere, in connection with the promotion, formation or management of a corporation, or involving fraud or dishonesty, or the conviction for which involved a finding that the offender had acted fraudulently or dishonestly;
(b)an offence under the Companies Act 1967 involving lack of diligence in the discharge of the duties of a director of a company;
[S 226/2023 wef 31/12/2021]
(c)an offence under the Act or any regulations made under the Act; or
(d)an offence under the Banking Act 1970, the Commodity Trading Act 1992, the Finance Companies Act 1967, the Financial Advisers Act 2001, the Financial Services and Markets Act 2022, the Insurance Act 1966, the Monetary Authority of Singapore Act 1970, the Payment Services Act 2019, the Penal Code 1871, or any subsidiary legislation made under any of these Acts;
[S 844/2019 wef 28/01/2020]
[S 226/2023 wef 31/12/2021]
[S 226/2023 wef 28/04/2023]
“securities borrowing and lending facility” means the facility established and operated by the Central Depository (Pte) Ltd for the lending and borrowing of specified products;
[S 667/2018 wef 08/10/2018]
“special purpose corporation” means a corporation established to acquire and own an aircraft which is to be leased out;
“specified exchange-traded derivatives contract” means an exchange-traded derivatives contract that is not a futures contract;
[S 667/2018 wef 08/10/2018]
“structured warrant” means a derivatives contract issued by a financial institution —
(a)of which the underlying thing —
(i)is not the credit of that financial institution; and
(ii)is not a financial instrument issued by that financial institution; and
(b)which gives the holder of the derivatives contract —
(i)the right to purchase the underlying thing from the financial institution;
(ii)the right to sell the underlying thing to the financial institution; or
(iii)the right to receive from the financial institution a cash payment calculated by reference to fluctuations in the value or price of the underlying thing.
[S 667/2018 wef 08/10/2018]
[Deleted by S 667/2018 wef 08/10/2018]
Exemption from requirement to hold capital markets services licence to deal in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts
2.—(1)  The following persons shall be exempted from the requirement to hold a capital markets services licence to carry on business in dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts, subject to the conditions and restrictions specified:
(a)a person when carrying on business in dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts for his own account, or an account belonging to and maintained wholly for the benefit of a related corporation, and with or through —
(i)the holder of a capital markets services licence to deal in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts;
[S 667/2018 wef 08/10/2018]
(ii)a bank that holds a licence under section 7 or 79 of the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(iii)a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(iv)a bank licensed, registered, approved or otherwise regulated under the laws of a jurisdiction outside Singapore to conduct banking business, but only in relation to securities, units in a collective investment scheme or specified exchange-traded derivatives contracts that are not quoted on an approved exchange;
[S 667/2018 wef 08/10/2018]
(v)a corporation or firm licensed or registered to carry on business in dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts under the laws of a jurisdiction outside Singapore, but only in relation to securities, units in a collective investment scheme or specified exchange-traded derivatives contracts that are not quoted on an approved exchange; or
[S 667/2018 wef 08/10/2018]
(vi)the Central Depository (Pte) Ltd pursuant to its specified products borrowing and lending facility;
[S 709/2010 wef 26/11/2010]
[S 667/2018 wef 08/10/2018]
(b)a person whose dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts is solely incidental to his carrying on business in —
(i)fund management;
(ii)providing custodial services; or
[S 667/2018 wef 08/10/2018]
(iii)product financing;
[S 667/2018 wef 08/10/2018]
(c)[Deleted by S 667/2018 wef 08/10/2018]
(d)the Central Depository (Pte) Ltd in respect of its dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts —
(i)that is solely incidental to its business of providing depository services for securities, units in a collective investment scheme or specified exchange-traded derivatives contracts; or
[S 667/2018 wef 08/10/2018]
(ii)that is done by reason only of its entering into a transaction pursuant to its specified products borrowing and lending facility, and in compliance with conditions specified in writing by the Authority;
[S 667/2018 wef 08/10/2018]
(e)a person when carrying on business in dealing in bonds with —
(i)an accredited investor, expert investor or institutional investor; or
[S 667/2018 wef 08/10/2018]
(ii)a person whose business involves the acquisition and disposal of or holding of securities (whether as principal or agent);
(f)a corporation when subscribing for securities, units in a collective investment scheme or specified exchange-traded derivatives contracts on behalf of a customer as nominee, provided that such corporation —
(i)has no interest in the securities, units in a collective investment scheme or specified exchange-traded derivatives contracts subscribed for other than as a bare trustee; and
[S 667/2018 wef 08/10/2018]
(ii)is a wholly-owned subsidiary of —
(A)the holder of a capital markets services licence to deal in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts;
[S 667/2018 wef 08/10/2018]
(B)a bank that holds a licence under section 7 or 79 of the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(C)a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(D)a finance company licensed under the Finance Companies Act 1967;
[S 226/2023 wef 31/12/2021]
(E)an approved exchange;
[S 667/2018 wef 08/10/2018]
(F)an approved holding company;
[S 667/2018 wef 08/10/2018]
(G)an approved clearing house;
[S 667/2018 wef 08/10/2018]
(g)a person approved by the Authority when, pursuant to the establishment and promotion of an aircraft leasing business in Singapore, he deals in the shares of a special purpose corporation with —
(i)a bank that holds a licence under section 7 or 79 of the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(ia)a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(ib)any other financial institution that may be approved by the Authority; or
[S 464/2021 wef 01/07/2021]
(ii)a corporation with total net assets exceeding $10 million in value or its equivalent in value in a foreign currency as determined in accordance with the most recent audited balance-sheet of the corporation or, in the case of a corporation which is not required to prepare audited accounts, a balance-sheet certified by the corporation as giving a true and fair view of the state of affairs of the corporation as at the end of the period to which it relates,
(referred to in this sub-paragraph as a designated institution) if, and only if, such dealing in shares is subject to a prohibition that the designated institution may not subsequently dispose of the shares of the special purpose corporation except to another designated institution;
(h)a trustee of a qualified arrangement in respect of capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivative contracts, whose dealing in such capital markets products is solely incidental to the management and administration of such arrangement;
[S 667/2018 wef 08/10/2018]
(i)a designated market-maker when carrying on business in dealing in capital markets products that are designated products for its own account or for the account of any of its related corporations;
[S 667/2018 wef 08/10/2018]
(j)a financial adviser licensed under the Financial Advisers Act 2001, or a person who is exempted under section 20 or 130 of that Act from holding a financial adviser’s licence, when dealing in capital markets products that are specified products other than OTC derivatives contracts by passing on an order to purchase or sell any specified product (other than an OTC derivatives contract) on behalf of a customer to whom the financial adviser or the person provides a financial advisory service mentioned in paragraph 1 or 2 of the Second Schedule to that Act (whether or not the customer relies on the advice given as part of the financial advisory service) to —
(i)a holder of a capital markets services licence for dealing in capital markets products that are specified products other than OTC derivatives contracts; or
(ii)a person exempted under section 99(1)(a) or (b) of the Act, who carries on business in dealing in capital markets products that are specified products other than OTC derivatives contracts;
[S 667/2018 wef 08/10/2018]
[S 226/2023 wef 31/12/2021]
(k)any responsible person for a collective investment scheme —
(i)that is authorised under section 286 of the Act;
(ii)that is recognised under section 287 of the Act; or
(iii)where the units of the scheme have been, are or will be, offered in reliance on an exemption under Subdivision (4) of Division 2 of Part 13 of the Act,
in respect of his dealing in capital markets products being —
(A)units of that scheme or the underlying capital markets products that comprise the investment of funds under that scheme, provided that such responsible person is also the holder of a capital markets services licence, or an exempt person, in respect of fund management; or
[S 667/2018 wef 08/10/2018]
(B)units of that scheme, provided that the dealing is effected through any of the following persons:
(BA)the holder of a capital markets services licence to deal in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts;
[S 667/2018 wef 08/10/2018]
(BB)an exempt person in respect of dealing in capital markets products that are units of any collective investment scheme;
[S 667/2018 wef 08/10/2018]
(BC)[Deleted by S 667/2018 wef 08/10/2018]
(BD)[Deleted by S 667/2018 wef 08/10/2018]
[S 226/2023 wef 31/12/2021]
(l)a person carrying on business in dealing in capital markets products that are units in a collective investment scheme for a customer who is —
(i)an institutional investor;
(ii)a related corporation of the person; or
(iii)a connected person of the person;
[S 667/2018 wef 08/10/2018]
(m)a corporation that carries on business in fund management, when dealing in capital markets products that are units of a collective investment scheme that is managed by the corporation or any of its related corporations;
[S 667/2018 wef 08/10/2018]
(n)a person carrying on business in dealing in capital markets products that are units in a collective investment scheme —
(i)the property of which does not include any capital markets products; and
(ii)all of the participants of which are qualified investors.
[S 667/2018 wef 08/10/2018]
(2)  A person who is exempted under sub-paragraph (1)(j) must —
(a)comply with regulations 39(3), 44, 46, 46A and 47 as if the person were a holder of a capital markets services licence;
(b)before passing on any order on behalf of a customer —
(i)provide a written disclosure to the customer on the potential risks associated with the purchase or sale of the specified product;
(ii)obtain the customer’s written acknowledgment of the written disclosure; and
(iii)maintain a record of the written acknowledgment received from the customer in the English language;
(c)where the person is licensed as a financial adviser under the Financial Advisers Act 2001, or exempt from holding a financial adviser’s licence under section 20(1)(g) of that Act, and the person receives any customer’s money or property other than for services rendered by the person, hand over such money or property to —
(i)(where the specified products are units in a collective investment scheme) the manager or trustee of the collective investment scheme or any person who is authorised by the manager or the trustee of the collective investment scheme to receive client’s money or property on the manager’s or trustee’s behalf;
(ii)a holder of a capital markets services licence to provide custodial services who is authorised by the customer to receive the customer’s money or property; or
(iii)a person exempt under paragraph 6 of this Schedule from holding a capital markets services licence for providing custodial services who is authorised by the customer to receive the customer’s money or property,
no later than the business day immediately following the day on which the person receives the money or property, or (with the customer’s prior written consent) any later day; and
[S 226/2023 wef 31/12/2021]
(d)where the person is licensed as a financial adviser under the Financial Advisers Act 2001, or exempt from holding a financial adviser’s licence under section 20(1)(g) of that Act, not receive money in the form of cash or any cheque made payable to a person other than a person mentioned in sub-paragraph (c)(i), (ii) or (iii), except where the money is paid for services rendered by the person or the person’s representative.
[S 373/2005 wef 01/07/2005]
[S 667/2018 wef 08/10/2018]
[S 226/2023 wef 31/12/2021]
Exemption from requirement to hold capital markets services licence to deal in capital markets products that are futures contracts
3.—(1)  The following persons shall be exempted from the requirement to hold a capital markets services licence to carry on business in dealing in capital markets products that are futures contracts, subject to the conditions and restrictions specified:
(a)a person when carrying on business in dealing in capital markets products that are futures contracts for his own account or an account belonging to and maintained wholly for the benefit of a related corporation or connected person;
[S 709/2010 wef 26/11/2011]
[S 667/2018 wef 08/10/2018]
(b)a person whose dealing in capital markets products that are futures contracts is solely incidental to his carrying on business in fund management;
[S 667/2018 wef 08/10/2018]
(c)an order-filler, provided that he shall not be or shall cease to be exempted if —
(i)he is or becomes a representative or employee of the holder of a capital markets services licence to deal in capital markets products that are futures contracts;
[S 667/2018 wef 08/10/2018]
(ii)he is or becomes an undischarged bankrupt whether in Singapore or elsewhere; or
(iii)he has been convicted of a relevant offence;
(d)a corporation which carries on business in dealing in capital markets products that are block futures contracts through an office or a branch of the corporation in Singapore (whether or not the corporation is formed, incorporated or existing in Singapore) (called in this paragraph the specified futures business) under the following circumstances:
(i)the corporation is not a holder of a capital markets services licence for any other regulated activity;
(ii)the corporation carries on the specified futures business with accredited investors, expert investors or institutional investors only;
(iii)the corporation is a fit and proper person to carry on the specified futures business;
(iv)the corporation carries on the specified futures business through representatives who are fit and proper persons to carry out dealing in capital markets products that are block futures contracts as the corporation’s representatives;
(v)in carrying on the specified futures business, the corporation —
(A)does not carry any customer’s positions, margin or account in its books;
(B)does not accept money or assets from any customer as settlement of, margin for, as a guarantee for, or as security for, any block futures contract;
(C)is not, whether as principal or agent, a party to any block futures contract;
(D)does not have the right to enter an order on any approved exchange or recognised market operator; and
(E)does not have the right to clear or settle a trade on any approved clearing house or recognised clearing house;
[S 762/2021 wef 09/10/2021]
(e)a corporation exempted under section 7(6) or (7) of the Act from the requirement under section 7(1) of the Act to be an approved exchange or a recognised market operator, whose dealing in capital markets products that are futures contracts is solely incidental to its operation of an organised market.
[S 667/2018 wef 08/10/2018]
(2)  An individual otherwise exempted under sub-paragraph (1)(a), (b) or (c), is not exempted or ceases to be exempted if the individual —
(a)is or becomes a representative or employee of the holder of a capital markets services licence to deal in capital markets products that are futures contracts;
(b)is or becomes an undischarged bankrupt whether in Singapore or elsewhere; or
(c)has been convicted of, or is convicted of, a relevant offence.
[S 667/2018 wef 08/10/2018]
(3)  A corporation otherwise exempted under sub-paragraph (1)(d) is not exempted or ceases to be exempted if —
(a)the corporation ceases to meet the conditions specified in sub-paragraph (1)(d);
(b)the corporation or its substantial shareholder is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(c)an enforcement order against the corporation or its substantial shareholder in respect of a judgment debt has been returned unsatisfied in whole or in part;
[S 344/2022 wef 04/05/2022]
(d)a receiver, a receiver and manager, a judicial manager or such other person having the powers and duties of a receiver, receiver and manager or judicial manager, has been appointed whether in Singapore or elsewhere in relation to, or in respect of, any property of the corporation or its substantial shareholder;
(e)the corporation or its substantial shareholder has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation;
(f)the corporation or its substantial shareholder has been convicted of, or is convicted of, a relevant offence;
(g)the corporation is not able to pay its debts in full as they fall due;
(h)the value of the corporation’s assets are less than the value of the corporation’s liabilities (including contingent liabilities);
(i)the corporation is granted a capital markets services licence in respect of any regulated activity; or
(j)the corporation does not carry on the specified futures business for a continuous period of 6 months.
[S 762/2021 wef 09/10/2021]
(4)  A corporation which is exempted under sub-paragraph (1)(d) must —
(a)take reasonable measures to verify that its customers, on whose behalf it carries on the specified futures business, are accredited investors, expert investors or institutional investors only;
[S 762/2021 wef 09/10/2021]
(b)ensure that proper records are kept of any document evidencing the status of its customers;
(c)lodge with the Authority —
(i)where the corporation commences the specified futures business on or after 8 October 2018, a notice of commencement of business in Form 30 not later than 14 days after the commencement of the business;
[S 762/2021 wef 09/10/2021]
(ii)[Deleted by S 762/2021 wef 09/10/2021]
(iii)a notice of change in particulars in Form 31 providing any change in particulars provided in the notice under sub-paragraph (i), not later than 14 days after the date of the change;
[S 762/2021 wef 09/10/2021]
(iv)a notice of cessation of business in Form 32 not later than 14 days after the cessation of its specified futures business; and
[S 762/2021 wef 09/10/2021]
(v)an annual declaration in Form 33 within 14 days after the end of each of its financial years;
(d)immediately notify the Authority if —
(i)the corporation no longer meets any of the requirements mentioned in sub-paragraph (1)(d);
(ii)the corporation is not able to pay its debts in full as they fall due; or
(iii)the value of the corporation’s assets are less than the value of the corporation’s liabilities (including contingent liabilities);
(e)in respect of each financial year —
(i)prepare a true and fair profit and loss account and a balance-sheet made up to the last day of the financial year in accordance with the provisions of the Companies Act 1967; and
[S 762/2021 wef 09/10/2021]
[S 226/2023 wef 31/12/2021]
(ii)lodge with the Authority, within 5 months after the end of the financial year or such later date allowed by the Authority, that account and balance-sheet, together with an auditor’s certification in Form 34;
[S 832/2020 wef 30/09/2020]
(f)provide the Authority with all information that the Authority may reasonably require concerning the corporation’s specified futures business; and
[S 762/2021 wef 09/10/2021]
(g)employ at least 2 persons in Singapore, each of whom has at least 5 years’ experience that is relevant to its specified futures business.
[S 667/2018 wef 08/10/2018]
[S 762/2021 wef 09/10/2021]
Exemption from requirement to hold capital markets services licence to deal in capital markets products that are OTC derivatives contracts
3A.—(1)  The following persons are exempt from the requirement to hold a capital markets services licence to carry on business in dealing in capital markets products that are OTC derivatives contracts, subject to the conditions and restrictions specified:
(a)a person who carries on business in dealing in capital markets products that are OTC derivatives contracts —
(i)for —
(A)his own account; or
(B)an account belonging to and maintained wholly for the benefit of a related corporation; and
(ii)with —
(A)a related corporation;
(B)a holder of a capital markets services licence to deal in capital markets products that are OTC derivatives contracts;
(C)a bank that holds a licence under section 7 or 79 of the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(D)a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(E)a bank licensed, registered, approved or otherwise regulated under the laws of a jurisdiction outside Singapore to conduct banking business; or
(F)a corporation or firm licensed or registered to carry on business in dealing in capital markets products that are OTC derivatives contracts under the laws of a jurisdiction outside Singapore; and
(iii)in the case of dealing in capital markets products that are OTC derivatives contracts with persons mentioned in sub-paragraph (ii)(B) to (F), does not receive a spread or other remuneration (including any incentive, benefit or reward, whether monetary or otherwise) in connection with such dealing;
(b)a person who carries on business in dealing in capital markets products that are OTC derivatives contracts of which the underlying thing is a commodity, with accredited investors, expert investors, or institutional investors only;
(c)a person whose dealing in capital markets products that are OTC derivatives contracts is solely incidental to his carrying on business in fund management;
(d)a corporation which carries on business in dealing in capital markets products that are OTC derivatives contracts through an office or branch of the corporation in Singapore (whether or not the corporation is formed, incorporated or existing in Singapore) (called in this paragraph the specified derivatives business) under the following circumstances:
(i)the corporation is not a holder of a capital markets services licences for any other regulated activity;
(ii)the corporation carries on the specified derivatives business with accredited investors, expert investors or institutional investors only;
(iii)the corporation is a fit and proper person to carry on the specified derivatives business;
(iv)the corporation carries on the specified derivatives business through representatives who are fit and proper persons to carry out dealing in capital markets products that are OTC derivatives contracts as the corporation’s representatives;
(v)in carrying on the specified derivatives business, the corporation —
(A)does not carry any customer’s positions, margin or account in its books;
(B)does not accept money or assets from any customer as settlement of, margin for, as a guarantee for, or as security for, any OTC derivatives contract;
(C)is not, whether as principal or agent, a party to any OTC derivatives contract;
(D)does not have the right to enter an order on any approved exchange or recognised market operator; and
(E)does not have the right to clear or settle a trade on any approved clearing house or recognised clearing house;
[S 762/2021 wef 09/10/2021]
(e)an approved global trading company which carries on business in dealing in capital markets products that are OTC derivatives contracts of which every underlying thing is a commodity;
(f)a corporation which —
(i)enters any OTC derivatives contract on behalf of a customer as nominee;
(ii)has no interest in the OTC derivatives contract other than as a bare trustee; and
(iii)is a wholly-owned subsidiary of —
(A)a holder of a capital markets services licence to deal in capital markets products that are OTC derivatives contracts;
(B)a bank that holds a licence under section 7 or 79 of the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(C)a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(D)a finance company licensed under the Finance Companies Act 1967;
[S 226/2023 wef 31/12/2021]
(E)an approved exchange;
(F)an approved holding company; or
(G)an approved clearing house;
(g)a trustee of a qualified arrangement in respect of OTC derivatives contracts, whose dealing in capital markets products that are OTC derivatives contracts is solely incidental to its management and administration of such arrangement;
(h)a corporation exempted from section 7(1) of the Act under section 7(6) or (7) of the Act, whose dealing in capital markets products that are OTC derivatives contracts is solely incidental to its operation of an organised market;
[S 832/2020 wef 30/09/2020]
(i)a person who carries on business in dealing in capital markets products that are OTC derivatives contracts where —
(i)the OTC derivatives contracts are options in respect of any note, bond or Treasury Bill; and
(ii)the person carries on the business with —
(A)an accredited investor, expert investor or institutional investor; or
(B)a person whose business involves the acquisition and disposal of or holding of specified products, whether as principal or agent.
[S 832/2020 wef 30/09/2020]
(2)  An individual otherwise exempted under sub-paragraph (1)(a), (b), (c) or (g) is not, or ceases to be, exempted if the individual —
(a)is or becomes a representative or employee of the holder of a capital markets services licence to deal in capital markets products that are OTC derivatives contracts;
(b)is or becomes an undischarged bankrupt whether in Singapore or elsewhere; or
(c)has been convicted of, or is convicted of, a relevant offence.
(3)  A corporation otherwise exempted under sub-paragraph (1)(d) is not, or ceases to be, exempted if —
(a)the corporation ceases to meet the conditions specified in sub-paragraph (1)(d);
(b)the corporation or its substantial shareholder is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(c)an enforcement order against the corporation or its substantial shareholder in respect of a judgment debt has been returned unsatisfied in whole or in part;
[S 344/2022 wef 04/05/2022]
(d)a receiver, a receiver and manager, a judicial manager or such other person having the powers and duties of a receiver, receiver and manager or judicial manager, has been appointed whether in Singapore or elsewhere in relation to, or in respect of, any property of the corporation or its substantial shareholder;
(e)the corporation or its substantial shareholder has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation;
(f)the corporation or its substantial shareholder has been convicted of, or is convicted of, a relevant offence;
(g)the corporation is not able to pay its debts in full as they fall due;
(h)the value of the corporation’s assets is less than the value of the corporation’s liabilities (including contingent liabilities);
(i)the corporation is granted a capital markets services licence in respect of any regulated activity; or
(j)the corporation does not carry on the specified derivatives business for a continuous period of 6 months.
[S 762/2021 wef 09/10/2021]
(4)  A corporation which is exempted under sub-paragraph (1)(d) must —
(a)take reasonable measures to verify that its customers, on whose behalf it carries on the specified derivatives business, are accredited investors, expert investors or institutional investors only;
[S 762/2021 wef 09/10/2021]
(b)ensure that proper records are kept of any document evidencing the status of its customers;
(c)lodge with the Authority —
(i)where the corporation commences the specified derivatives business on or after 8 October 2018, a notice of commencement of business in Form 30 not later than 14 days after the commencement of the business;
[S 762/2021 wef 09/10/2021]
(ii)[Deleted by S 762/2021 wef 09/10/2021]
(iii)a notice of change in particulars in Form 31 providing any change in particulars provided in the notice under sub-paragraph (i), not later than 14 days after the date of the change;
[S 762/2021 wef 09/10/2021]
(iv)a notice of cessation of business in Form 32 not later than 14 days after the cessation of its specified derivatives business;
[S 762/2021 wef 09/10/2021]
(v)an annual declaration in Form 33 within 14 days after the end of each of its financial years;
(d)immediately notify the Authority if —
(i)the corporation no longer meets any of the requirements mentioned in sub-paragraph (1)(d);
(ii)the corporation is not able to pay its debts in full as they fall due; or
(iii)the value of the corporation’s assets are less than the value of the corporation’s liabilities (including contingent liabilities);
(e)in respect of each financial year —
(i)prepare a true and fair profit and loss account and a balance-sheet made up to the last day of the financial year in accordance with the provisions of the Companies Act 1967; and
[S 762/2021 wef 09/10/2021]
[S 226/2023 wef 31/12/2021]
(ii)lodge with the Authority, within 5 months after the end of the financial year or such later date allowed by the Authority, that account and balance-sheet, together with an auditor’s certification in Form 34;
[S 832/2020 wef 30/09/2020]
(f)provide the Authority with all information that the Authority may reasonably require concerning the corporation’s specified derivatives business; and
[S 762/2021 wef 09/10/2021]
(g)employ at least 2 persons in Singapore, each of whom has at least 5 years’ experience that is relevant to its specified derivatives business.
[S 762/2021 wef 09/10/2021]
(5)  A corporation which is exempted under sub-paragraph (1)(b) or (e) must provide the Authority with all information that the Authority may reasonably require concerning the corporation’s business of dealing in capital markets products that are OTC derivatives contracts.
[S 667/2018 wef 08/10/2018]
Exemption from requirement to hold capital markets services licence to deal in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading
4.—(1)  The following persons shall be exempted from the requirement to hold a capital markets services licence to carry on business in dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading, subject to the conditions and restrictions specified:
(a)a person who carries on business in dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading —
(i)for his own account and with a related corporation or connected person; or
(ii)for his own account or an account belonging to and maintained wholly for the benefit of a related corporation or connected person, and with or through —
[S 709/2010 wef 26/11/2010]
(A)the holder of a capital markets services licence to carry on business in dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading;
[S 667/2018 wef 08/10/2018]
(B)a bank that holds a licence under section 7 or 79 of the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(C)a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970;
[S 464/2021 wef 01/07/2021]
[S 226/2023 wef 31/12/2021]
(D)a bank licensed, registered, approved or otherwise regulated under the laws of a jurisdiction outside Singapore to conduct banking business; or
(E)a corporation or firm licensed or registered to carry on business in dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading under the laws of a jurisdiction outside Singapore;
[S 667/2018 wef 08/10/2018]
(b)a person whose dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading is solely incidental to his carrying on business in fund management.
[S 385/2012 wef 07/08/2012]
[S 667/2018 wef 08/10/2018]
(c)[Deleted by S 385/2012 wef 07/08/2012]
(2)  A person otherwise exempted under sub-paragraph (1) shall not be or shall cease to be so exempted if he also carries on business for dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading other than in accordance with sub-paragraph (1)(a) or (b).
[S 385/2012 wef 07/08/2012]
[S 667/2018 wef 08/10/2018]
(3)  An individual otherwise exempted under sub-paragraph (1)(a) shall not be or shall cease to be so exempted if —
(a)he is or becomes a representative or employee of the holder of a capital markets services licence to deal in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading;
[S 667/2018 wef 08/10/2018]
(b)he is or becomes an undischarged bankrupt whether in Singapore or elsewhere; or
(c)he has been convicted of a relevant offence.
[S 385/2012 wef 07/08/2012]
(4)  A corporation otherwise exempted under sub-paragraph (1)(a) shall not be or shall cease to be so exempted if —
(a)the corporation or its substantial shareholder is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)an enforcement order against the corporation or its substantial shareholder in respect of a judgment debt has been returned unsatisfied in whole or in part;
[S 344/2022 wef 04/05/2022]
(c)a receiver, a receiver and manager, a judicial manager or such other person having the powers and duties of a receiver, receiver and manager or judicial manager, has been appointed whether in Singapore or elsewhere in relation to, or in respect of, any property of the corporation or its substantial shareholder;
(d)the corporation or its substantial shareholder has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation; or
(e)the corporation or its substantial shareholder has been convicted of a relevant offence.
[S 385/2012 wef 07/08/2012]
(4A)  [Deleted by S 385/2012 wef 07/08/2012]
(5)  [Deleted by S 385/2012 wef 07/08/2012]
(6)  [Deleted by S 385/2012 wef 07/08/2012]
(7)  [Deleted by S 385/2012 wef 07/08/2012]
(8)  [Deleted by S 385/2012 wef 07/08/2012]
Exemption from requirement to hold capital markets services licence for fund management
5.—(1)  The following persons shall be exempted from the requirement to hold a capital markets services licence to carry on business in fund management, subject to the conditions and restrictions specified:
(a)a headquarters company or Finance and Treasury Centre which carries on a class of business involving fund management but only to the extent that the business in fund management has been approved as a qualifying service in relation to that headquarters company or Finance and Treasury Centre under section 43D(2)(a) or 43E(2)(a) of the Income Tax Act 1947, as the case may be;
[S 226/2023 wef 31/12/2021]
(b)a corporation which carries on business in fund management for or on behalf of any of its related corporations, so long as in carrying on such business, none of the capital markets products or spot foreign exchange contracts being managed, are —
(i)held on trust for another person by the second-mentioned corporation;
(ii)the result of any investment contract entered into by the second-mentioned corporation; or
(iii)beneficially owned by any person, other than the first-mentioned or second-mentioned corporation;
[S 667/2018 wef 08/10/2018]
(c)an individual who carries on business in fund management for or on behalf of —
(i)his spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister; or
(ii)a firm or corporation in which he or any of the persons referred to in sub-paragraph (i) has control of 100% of the voting power, whether such control is exercised individually or jointly with any person referred to in that sub-paragraph,
so long as in carrying on such business, none of the capital markets products or spot foreign exchange contracts being managed, are —
(A)held on trust for another person by any person referred to in sub-paragraph (i) or (ii);
(B)the result of any investment contract entered into by any person referred to in sub-paragraph (i) or (ii); or
(C)beneficially owned by any person, other than the individual or any person referred to in sub-paragraph (i) or (ii);
[S 170/2013 wef 28/03/2013]
[S 667/2018 wef 08/10/2018]
(d)[Deleted by S 385/2012 wef 07/08/2012]
(e)the holder of a capital markets services licence to deal in capital markets products that are futures contracts which carries on business in fund management in accordance with regulation 20;
[S 667/2018 wef 08/10/2018]
(f)a Service Company whose business in fund management is solely incidental to its carrying on business as an agent of a member of Lloyd’s;
(g)a financial adviser —
(i)who is —
(A)licensed under the Financial Advisers Act 2001 in respect of the provision of the financial advisory services specified in paragraph 1 of the Second Schedule to the Act;
[S 226/2023 wef 31/12/2021]
(B)exempted under section 20 of the Financial Advisers Act 2001; or
[S 226/2023 wef 31/12/2021]
(C)exempted under section 130 of the Financial Advisers Act 2001 from section 6 of that Act in respect of the provision of the financial advisory services specified in paragraph 1 of the Second Schedule to that Act; and
[S 667/2018 wef 08/10/2018]
[S 226/2023 wef 31/12/2021]
(ii)who carries on business in fund management for or on behalf of another person (referred to in this paragraph as the client) in connection with any advice that is given by the licensed financial adviser to the client concerning units in a collective investment scheme, whether or not the person relies on the financial adviser’s advice or a portfolio of units in various collective investment schemes,
provided that —
(A)the scope of such business is confined to the management of one or more portfolios comprising solely of units in one or more collective investment schemes;
[S 667/2018 wef 08/10/2018]
(B)in carrying on business in fund management for or on behalf of the client, the financial adviser obtains the prior approval of the client in respect of every transaction entered into for or on behalf of the client, other than a transaction for the purpose of periodically rebalancing the units of a client’s portfolio;
[S 667/2018 wef 08/10/2018]
(BA)in carrying on business in fund management for or on behalf of the client and in respect of transactions for the purpose of periodically rebalancing the units of a client’s portfolio, the financial adviser —
(AA)has provided information to the client in accordance with sub-paragraph (1A);
(BB)has obtained the written approval of the client to periodically enter into transactions for the purpose of periodically rebalancing the units of the client’s portfolio in accordance with the information provided under sub-paragraph (AA);
(CC)prior to each transaction for the purpose of periodically rebalancing the units of a client’s portfolio, notifies the client in writing of the financial adviser’s intention to enter into that transaction; and
(DD)enters only into transactions to which the client’s most recent written approval obtained under sub-paragraph (BB) relates;
[S 667/2018 wef 08/10/2018]
(BC)the financial adviser only receives the client’s money or property in respect of transactions entered into and services rendered by the financial adviser that have been approved by the client in accordance with sub-paragraph (B) or (BA); and
[S 667/2018 wef 08/10/2018]
(C)where the licensed financial adviser receives the client’s money or property under sub-paragraph (B), such money or property, except to the extent that it is received wholly for services rendered by the licensee, shall be handed over to —
(CA)the manager or trustee of the collective investment scheme, or any person who is authorised by the manager or trustee of the collective investment scheme to receive a customer’s money or property on its behalf;
[S 667/2018 wef 08/10/2018]
(CB)the holder of a capital markets services licence under the Act to provide custodial services which is authorised by the client to receive the client’s money or property; or
[S 667/2018 wef 08/10/2018]
(CC)a person exempt under paragraph 6 from holding a capital markets services licence to provide custodial services which is authorised by the client to receive the client’s money or property,
not later than the business day immediately following the day on which the licensed financial adviser receives the money or property or at a later date if, and only if, it has the client’s prior written consent to do so;
[S 373/2005 wef 01/07/2005]
[S 385/2012 wef 07/08/2012]
[S 667/2018 wef 08/10/2018]
(h)a person who carries on business in fund management in Singapore on behalf of qualified investors where the assets managed by it comprise securities issued by one or more bodies corporate or interests in bodies unincorporate, where the sole purpose of each such body corporate or body unincorporate is to hold, whether directly or through another entity or trust, immovable assets;
[S 385/2012 wef 07/08/2012]
[S 170/2013 wef 28/03/2013]
[S 10/2021 wef 08/01/2021]
(i)a corporation —
(i)which carries on business in Singapore in fund management on behalf of not more than 30 qualified investors, of which not more than 15 are collective investment schemes, closed-end funds, or limited partnerships referred to in sub-paragraph (3)(e); and
(ii)which is registered with the Authority in accordance with sub-paragraph (7) and the registration is and continues to be published on the Authority’s website;
[S 385/2012 wef 07/08/2012]
[S 667/2018 wef 08/10/2018]
(j)a person who carries on business in fund management in Singapore by managing the property of, or operating, a collective investment scheme —
(i)the property of which does not include any capital markets products; and
(ii)all of the participants of which are qualified investors;
[S 667/2018 wef 08/10/2018]
(k)a person who carries on business in fund management in Singapore by managing the property of, or operating, a collective investment scheme —
(i)the property of which does not include any capital markets products; and
(ii)the units of which are not the subject of any offer or invitation for subscription or purchase on or after 8 October 2018.
[S 667/2018 wef 08/10/2018]
(1A)  For the purposes of paragraph 5(1)(g)(BA)(AA), the financial adviser has provided information in accordance with this paragraph if —
(a)the financial adviser has provided to the client the following information at any time before the transaction:
(i)the scope of activities to be undertaken by the financial adviser in connection with periodically rebalancing the units of the client’s portfolio;
(ii)the fees payable to the financial adviser in connection with periodically rebalancing the units of the client’s portfolio;
(iii)the frequency with which the financial adviser will periodically rebalance the units of the client’s portfolio;
(iv)the methodology of the financial adviser in periodically rebalancing the units of the client’s portfolio;
(v)any other material terms and conditions under which the financial adviser will periodically rebalance the units of the client’s portfolio; and
(b)the information provided under sub-paragraph (a) remains correct as at the date of the transaction.
[S 667/2018 wef 08/10/2018]
(2)  For the purposes of sub-paragraph (1) —
(a)a person otherwise exempted under sub-paragraph (1) shall not be or shall cease to be so exempted if he also carries on business in fund management other than in accordance with sub-paragraph (1)(a), (b), (c), (e), (f), (h), (i) or (j), as the case may be;
[S 385/2012 wef 07/08/2012]
[S 667/2018 wef 08/10/2018]
(b)a person who is exempted under sub-paragraph (1)(a) or (b) may, in ascertaining the number of qualified investors for the purpose of exemption under sub-paragraph (1)(i), exclude those persons on behalf of whom he carries on business in fund management under sub-paragraph (1)(a) or (b);
[S 170/2013 wef 28/03/2013]
(bb)a person otherwise exempted under sub-paragraph (1)(i) shall not be or shall cease to be so exempted if —
(i)it is the holder of a capital markets services licence in respect of any regulated activity;
[S 385/2012 wef 07/08/2012]
(ii)it has not commenced business in fund management in accordance with sub-paragraph (1)(i) within 6 months from the date of its registration by the Authority as a Registered Fund Management Company under sub-paragraph (7); or
[S 385/2012 wef 07/08/2012]
(iii)it has ceased to carry on business in fund management in accordance with sub-paragraph (1)(i), and has not resumed business in the same regulated activity in accordance with that sub-paragraph, within a continuous period of 6 months from the date of cessation.
[S 373/2005 wef 01/07/2005]
[S 385/2012 wef 07/08/2012]
(c)a person who is otherwise exempted under sub-paragraph (1)(i) and is also exempted under regulation 27(1)(d) of the Financial Advisers Regulations (Rg 2) from the requirement to hold a financial adviser’s licence under the Financial Advisers Act 2001 in respect of providing any financial advisory service, other than —
(i)[Deleted by S 667/2018 wef 08/10/2018]
(ii)arranging contracts of insurance in respect of life policies,
shall not be or shall cease to be exempted under sub-paragraph (1)(i) if the number of qualified investors on behalf of whom he carries on business in fund management and the number of accredited investors to whom he provides financial advisory services exceed 30 in total.
[S 385/2012 wef 07/08/2012]
[S 226/2023 wef 31/12/2021]
(3)  In this paragraph, each of the following persons, schemes and funds shall be considered as one qualified investor:
(a)an accredited investor, other than —
(i)one who is a participant in a collective investment scheme referred to in sub-paragraph (b);
(ii)one who is a holder of a unit in a closed-end fund, or an arrangement mentioned in paragraph (aa) of the definition of “closed-end fund” in section 2(1) of the Act, referred to in sub-paragraph (c);
[S 667/2018 wef 08/10/2018]
(iii)one which is a corporation referred to in section 4A(1)(a)(ii) of the Act or an entity referred to in regulation 2(b) of the Securities and Futures (Prescribed Specific Classes of Investors) Regulations 2005 (G.N. No. S 369/2005) —
(A)which is related to or controlled by a person referred to in sub-paragraph (1)(i), or a key officer or substantial shareholder of such person; and
[S 385/2012 wef 07/08/2012]
(B)the shares or debentures of which are, after 28th May 2008, the subject of an offer or invitation for subscription or purchase made to any person who is not an accredited investor; or
(iv)a corporation or an entity which is a collective investment scheme or a closed-end fund, or an arrangement mentioned in paragraph (aa) of the definition of “closed-end fund” in section 2(1) of the Act, the units of which are, after 28th May 2008, the subject of an offer or invitation made to any person who is not an accredited investor;
[S 667/2018 wef 08/10/2018]
(b)a collective investment scheme the units of which are the subject of an offer or invitation for subscription or purchase made —
(i)in Singapore only to accredited investors or institutional investors or both; or
[S 385/2012 wef 07/08/2012]
(ii)elsewhere if, after 28th May 2008, such offer or invitation is made only to accredited investors, or investors in an equivalent class under the laws of the country or territory in which the offer or invitation is made, or institutional investors or both;
[S 385/2012 wef 07/08/2012]
(c)a closed-end fund, or an arrangement mentioned in paragraph (aa) of the definition of “closed-end fund” in section 2(1) of the Act, the units of which are the subject of an offer or invitation for subscription or purchase made only to accredited investors, or investors in an equivalent class under the laws of the country or territory in which the offer or invitation is made, or institutional investors or both;
[S 385/2012 wef 07/08/2012]
[S 667/2018 wef 08/10/2018]
(d)an institutional investor, other than a collective investment scheme;
[S 385/2012 wef 07/08/2012]
(e)a limited partnership, where the limited partners comprise solely of accredited investors or investors in an equivalent class under the laws of the country or territory in which the partnership is formed, or institutional investors, or both;
[S 385/2012 wef 07/08/2012]
(f)any other person that the Authority may, from time to time, by a guideline issued by the Authority, determine;
[S 385/2012 wef 07/08/2012]
(4)  An individual shall not be or shall cease to be exempted from the requirement to hold a capital markets services licence to carry on business in fund management if —
(a)he is or becomes a representative or employee of the holder of a capital markets services licence for fund management;
(b)he is or becomes an undischarged bankrupt whether in Singapore or elsewhere; or
(c)he has been convicted of a relevant offence.
(5)  A corporation otherwise exempted under sub-paragraph (1)(a), (b), (h) or (i) shall not be or shall cease to be so exempted if —
(a)the corporation or its substantial shareholder is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)an enforcement order against the corporation or its substantial shareholder in respect of a judgment debt has been returned unsatisfied in whole or in part;
[S 344/2022 wef 04/05/2022]
(c)a receiver, a receiver and manager, a judicial manager or such other person having the powers and duties of a receiver, receiver and manager or judicial manager, has been appointed whether in Singapore or elsewhere in relation to, or in respect of, any property of the corporation or its substantial shareholder;
(d)the corporation or its substantial shareholder has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation; or
(e)the corporation or its substantial shareholder has been convicted of a relevant offence.
[S 385/2012 wef 07/08/2012]
[S 170/2013 wef 28/03/2013]
(6)  A person who is exempted under sub-paragraph (1)(i) shall —
(a)take reasonable measures to verify that the persons on behalf of whom he carries on business in fund management are qualified investors; and
(b)ensure that proper records are kept of any document evidencing the status of such persons.
[S 385/2012 wef 07/08/2012]
(7)  A corporation which seeks to be exempted under sub-paragraph (1)(i) shall register with the Authority as a Registered Fund Management Company by lodging with the Authority a notice of commencement of its business in Form 22A prior to the commencement of its business in fund management, accompanied by a non-refundable annual fee which shall be paid in the manner specified by the Authority in writing.
[S 385/2012 wef 07/08/2012]
(7A)  A corporation shall not represent itself as a Registered Fund Management Company, unless —
(a)it has fulfilled all the requirements in sub-paragraph (1)(i); and
(b)the registration of the corporation as a Registered Fund Management Company is and continues to be published on the Authority’s website.
[S 385/2012 wef 07/08/2012]
(7B)  The Authority may refuse to register a corporation under sub-paragraph (7) unless the corporation has demonstrated to the Authority’s satisfaction that —
(a)it is able to fulfil the requirements under sub-paragraph (1)(i)(i) and regulation 13 or both regulations 13 and 13B (as the case may be) as applied to a Registered Fund Management Company under regulation 54A(1);
[S 170/2013 wef 28/03/2013]
(b)if it is incorporated in Singapore, its base capital, or if it is a foreign company, its net head office funds, is not less than $250,000;
(c)it employs at least 2 persons, each of whom has at least 5 years’ experience that is relevant to the fund management activities it intends to carry out; and
(d)the total value of its managed assets does not exceed $250 million.
[S 385/2012 wef 07/08/2012]
(7C)  The Authority may cancel the registration of a corporation under sub-paragraph (7) if the corporation is issued with a capital markets services licence in fund management.
[S 385/2012 wef 07/08/2012]
(7D)  A Registered Fund Management Company shall not cause or permit —
(a)where it is incorporated in Singapore, its base capital; or
(b)where it is a foreign company, its net head office funds,
to fall below $250,000.
[S 385/2012 wef 07/08/2012]
(7E)  A Registered Fund Management Company shall at all times employ at least 2 persons, each of whom has at least 5 years’ experience that is relevant to the fund management activities it is carrying out.
[S 385/2012 wef 07/08/2012]
(7F)  The total value of the managed assets of a Registered Fund Management Company shall not at any time exceed $250 million.
[S 385/2012 wef 07/08/2012]
(7G)  If a corporation which carries on business in fund management in reliance on sub-paragraph (1)(i) fails to meet the criterion in sub-paragraph (1)(i)(i) or to comply with sub-paragraph (7D), (7E) or (7F), or becomes aware that it will likely fail to meet any of those criteria or to comply with sub-paragraph (7D), (7E) or (7F), it shall —
(a)immediately notify the Authority; and
(b)cease any increase in positions, and not accept assets for fund management, until such time as advised by the Authority.
[S 385/2012 wef 07/08/2012]
(7H)  If the Authority becomes aware that a corporation which carries on business in fund management in reliance on sub-paragraph (1)(i) fails to meet any criterion in sub-paragraph (1)(i)(i) or to comply with sub-paragraph (7D), (7E) or (7F), the Authority may direct the Registered Fund Management Company to operate its business in such manner and on such conditions as the Authority may impose, and the corporation to whom such direction is issued shall comply with the direction.
[S 385/2012 wef 07/08/2012]
(7I)  A Registered Fund Management Company shall lodge with the Authority —
(a)a notice of change of particulars in Form 23A providing any change in the particulars in the notice lodged under sub-paragraph (7), not later than 14 days after the date of the change;
(b)a notice of cessation of business in Form 24A at any time prior to the cessation of its business in fund management; and
(c)an annual declaration in Form 25A within one month after the end of each of its financial years.
[S 385/2012 wef 07/08/2012]
(7J)  A Registered Fund Management Company shall submit an auditor’s report in Form 25B, no later than 5 months after the end of each of its financial years.
[S 385/2012 wef 07/08/2012]
(7K)  In this paragraph, “managed assets”, in relation to a corporation (including one that is a Registered Fund Management Company), means all of the following:
(a)moneys and assets contracted to, drawn down by or are under the discretionary authority granted by the customer to the corporation and in respect of which it is carrying out fund management;
(b)moneys and assets contracted to the corporation, and are under the non-discretionary authority granted by the customer to the corporation, and in respect of which the corporation is carrying out fund management;
(c)moneys and assets contracted to the corporation, but which have been sub-contracted to another party and for which the other party is carrying out fund management, whether on a discretionary authority granted by the customer or otherwise.
[S 385/2012 wef 07/08/2012]
(7L)  In sub-paragraph (7K), moneys and assets are contracted to a corporation if they are the subject-matter of a contract for fund management between the corporation and its customer.
[S 385/2012 wef 07/08/2012]
(8)  Every person exempted under sub-paragraph (1)(a), (e), (h) or (i) shall furnish to the Authority, at such time and in such manner as the Authority may direct, all such information concerning his business in fund management as the Authority may reasonably require.
[S 385/2012 wef 07/08/2012]
(9)  [Deleted by S 385/2012 wef 07/08/2012]
Exemption from requirement to hold capital markets services licence to provide custodial services
6.—(1)  The following persons shall be exempted from the requirement to hold a capital markets services licence to carry on business in providing custodial services, subject to the conditions and restrictions specified:
(a)a trustee of a qualified arrangement in respect of specified products when carrying out his duties of managing and administering such arrangement;
[S 667/2018 wef 08/10/2018]
(b)a company or society registered under the Insurance Act 1966 when carrying on business in providing custodial services only in respect of units of any collective investment scheme;
[S 226/2023 wef 31/12/2021]
(c)a Service Company acting as an agent in Singapore for any member of Lloyd’s, when carrying on business in providing custodial services only in respect of units of any collective investment scheme.
[S 667/2018 wef 08/10/2018]
(2)  Part III of these Regulations shall, with the necessary modifications, apply to each of the persons referred to in sub-paragraph (1)(b) and (c) as if it were the holder of a capital markets services licence and, where applicable, to a representative of any of these persons when acting as such, as if he were the holder of a representative’s licence.
[S 667/2018 wef 08/10/2018]
Exemption from requirement to hold capital markets services licence to advise on corporate finance
7.—(1)  The following persons shall be exempted from the requirement to hold a capital markets services licence to carry on business in advising on corporate finance, subject to the conditions and restrictions specified:
(a)a person who carries on business in giving advice on corporate finance to a related corporation, provided that —
(i)such advice is not specifically given for the making of any offer of specified products to the public by the related corporation; and
[S 667/2018 wef 08/10/2018]
(ii)where the related corporation is —
(A)a public company;
(B)listed on an approved exchange; or
[S 667/2018 wef 08/10/2018]
(C)a subsidiary of a corporation listed on an approved exchange,
such advice is not circulated to the shareholders (other than shareholders who are accredited investors, expert investors or institutional investors) of (in the case of sub-paragraph (A) or (B)) the related corporation or (in the case of sub-paragraph (C)) the listed corporation, or is otherwise made known to the public;
[S 667/2018 wef 08/10/2018]
(b)a person resident in Singapore who carries on business in Singapore in giving advice on corporate finance to accredited investors, expert investors or institutional investors, provided that —
(i)such advice is not specifically given for the making of any offer of specified products to the public by the accredited investor, expert investor or institutional investor to whom the advice was given; and
[S 667/2018 wef 08/10/2018]
(ii)where the accredited investor, expert investor or institutional investor is —
(A)a public company;
(B)listed on an approved exchange; or
[S 667/2018 wef 08/10/2018]
(C)a subsidiary of a corporation listed on an approved exchange,
such advice is not circulated to the shareholders (other than shareholders who are accredited investors, expert investors or institutional investors) of (in the case of sub-paragraph (A) or (B)) the accredited investor, expert investors or institutional investors or (in the case of sub-paragraph (C)) the listed corporation, or is otherwise made known to the public;
[S 275/2008 wef 28/05/2008]
[S 667/2018 wef 08/10/2018]
(c)a person who advises another person concerning any arrangement, reconstruction or take-over of any corporation or any of the corporation’s assets or liabilities, provided that —
(i)such advice is not specifically given for the making of any offer of specified products to the public by the second-mentioned person; and
[S 667/2018 wef 08/10/2018]
(ii)where the second-mentioned person is —
(A)a public company;
(B)listed on an approved exchange; or
[S 667/2018 wef 08/10/2018]
(C)a subsidiary of a corporation listed on an approved exchange,
such advice is not circulated to the shareholders (other than shareholders who are accredited investors, expert investors or institutional investors) of (in the case of sub-paragraph (A) or (B)) the second-mentioned person or (in the case of sub-paragraph (C)) the listed corporation, or is otherwise made known to the public;
[S 667/2018 wef 08/10/2018]
(d)a person who carries on business in giving advice to another person concerning compliance with or in respect of any laws or regulatory requirements relating to the raising of funds not involving any specified products.
[S 667/2018 wef 08/10/2018]
(2)  A person otherwise exempted under sub-paragraph (1)(a), (b), (c) or (d) shall not be or shall cease to be so exempted if he also carries on business in advising on corporate finance other than in accordance with sub-paragraph (1)(a), (b), (c) or (d).
[S 667/2018 wef 08/10/2018]
(2A)  A person otherwise exempted under sub-paragraph (1)(b) shall not be or shall cease to be so exempted if —
(a)he is the holder of a capital markets services licence in respect of any regulated activity;
[S 404/2005 wef 22/06/2005]
(b)he has not commenced business in advising on corporate finance in accordance with sub-paragraph (1)(b) within 6 months from the date of commencement of business as specified in the notice that the person has lodged with the Authority in accordance with sub-paragraph (6)(a); or
(c)he has ceased to carry on business in advising on corporate finance in accordance with sub-paragraph (1)(b), and has not resumed business in the same regulated activity in accordance with that sub-paragraph, within a continuous period of 6 months from the date of cessation.
[S 373/2005 wef 01/07/2005]
(3)  An individual otherwise exempted under sub-paragraph (1) shall not be or shall cease to be so exempted if —
(a)he is or becomes a representative or employee of the holder of a capital markets services licence in advising on corporate finance;
(b)he is or becomes an undischarged bankrupt whether in Singapore or elsewhere; or
(c)he has been convicted of a relevant offence.
(4)  A corporation otherwise exempted under sub-paragraph (1) shall not be or shall cease to be so exempted if —
(a)the corporation or its substantial shareholder is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;
(b)an enforcement order against the corporation or its substantial shareholder in respect of a judgment debt has been returned unsatisfied in whole or in part;
[S 344/2022 wef 04/05/2022]
(c)a receiver, a receiver and manager, a judicial manager or such other person having the powers and duties of a receiver, receiver and manager or judicial manager, has been appointed whether in Singapore or elsewhere in relation to, or in respect of, any property of the corporation or its substantial shareholder;
(d)the corporation or its substantial shareholder has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation; or
(e)the corporation or its substantial shareholder has been convicted of a relevant offence.
(5)  A person who is exempted under sub-paragraph (1)(b) shall —
(a)take reasonable measures to verify that the persons to whom he carries on business in advising on corporate finance are accredited investors, expert investors or institutional investors; and
[S 667/2018 wef 08/10/2018]
(b)ensure that proper records are kept of any document evidencing the status of such persons.
(6)  A person who is exempted under sub-paragraph (1)(b) shall lodge with the Authority —
(a)a notice of commencement of business in Form 22 not later than 14 days after the commencement of his business in advising on corporate finance;
(b)a notice of change of particulars in Form 23 providing any change in the particulars in the notice under sub-paragraph (a), not later than 14 days after the date of the change;
(c)a notice of cessation of business in Form 24 not later than 14 days after the cessation of his business in advising on corporate finance; and
(d)a declaration in Form 25 within 14 days after the end of the financial year of the person.
(7)  Every person exempted under sub-paragraph (1)(b) shall furnish to the Authority, at such time and in such manner as the Authority may direct, all such information concerning his business in advising on corporate finance as the Authority may reasonably require.
(8)  A person exempted under sub-paragraph (1)(b) who has, at any time before 1st October 2002, lodged a notice of commencement of business in the prescribed form under regulation 41(5)(a) of the revoked Securities Industry Regulations (Cap. 289, Rg 1) in relation to the activity specified in paragraph (a) of the definition of “investment adviser” in section 2 (1) of the repealed Securities Industry Act (Cap. 289) shall be deemed to have lodged a notice of commencement of business in compliance with sub-paragraph (6)(a).
Exemption from section 99B(1) of Act
8.—(1)  Subject to sub-paragraph (7), an employee of the holder of a capital markets services licence for dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts shall be exempted from section 99B(1) of the Act when carrying out any of the following for the account of the licence holder or for an account belonging to and maintained wholly for the benefit of a corporation related to the licence holder:
(a)dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts on an approved exchange or a recognised market operator; or
[S 667/2018 wef 08/10/2018]
(b)dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts with —
(i)an institutional investor; or
(ii)an entity licensed, approved, registered or otherwise regulated by a regulator who is responsible for the supervision of financial institutions in a jurisdiction other than Singapore.
[S 667/2018 wef 08/10/2018]
(2)  Subject to sub-paragraph (7), an employee of the holder of a capital markets services licence for dealing in capital markets products that are futures contracts shall be exempted from section 99B(1) of the Act when carrying out that regulated activity for the account of the licence holder or for an account belonging to and maintained wholly for the benefit of a corporation related to the licence holder.
[S 667/2018 wef 08/10/2018]
(3)  Subject to sub-paragraph (7), an employee of the holder of a capital markets services licence for dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading shall be exempted from section 99B(1) of the Act when carrying out any of the following for the account of the licence holder or for an account belonging to and maintained wholly for the benefit of a corporation related to the licence holder:
(a)dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading with an institutional investor; or
[S 667/2018 wef 08/10/2018]
(b)dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading with an entity licensed, approved, registered or otherwise regulated by a regulator who is responsible for the supervision of financial institutions in a jurisdiction other than Singapore.
[S 667/2018 wef 08/10/2018]
(4)  Subject to sub-paragraph (7), an employee of a person exempted under section 99(1)(a), (b) or (c) of the Act in respect of the activity of dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts shall be exempted from section 99B(1) of the Act when carrying out any of the following for the account of the exempt person or for an account belonging to and maintained wholly for the benefit of a corporation related to the exempt person:
(a)dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts on an approved exchange or a recognised market operator; or
[S 667/2018 wef 08/10/2018]
(b)dealing in capital markets products that are securities, units in a collective investment scheme or specified exchange-traded derivatives contracts with —
(i)an institutional investor; or
(ii)an entity licensed, approved, registered or otherwise regulated by a regulator who is responsible for the supervision of financial institutions in a jurisdiction other than Singapore.
[S 667/2018 wef 08/10/2018]
(5)  Subject to sub-paragraph (7), an employee of a person exempted under section 99(1)(a), (b) or (c) of the Act in respect of the activity of dealing in capital markets products that are futures contracts shall be exempted from section 99B(1) of the Act when carrying out that activity for the account of the exempt person or for an account belonging to and maintained wholly for the benefit of a corporation related to the exempt person.
[S 667/2018 wef 08/10/2018]
(6)  Subject to sub-paragraph (7), an employee of a person exempted under section 99(1)(a), (b) or (c) of the Act in respect of the activity of dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading shall be exempted from section 99B(1) of the Act when carrying out any of the following for the account of the exempt person or for an account belonging to and maintained wholly for the benefit of a corporation related to the exempt person:
(a)dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading with an institutional investor; or
[S 667/2018 wef 08/10/2018]
(b)dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading with an entity licensed, approved, registered or otherwise regulated by a regulator who is responsible for the supervision of financial institutions in a jurisdiction other than Singapore.
[S 667/2018 wef 08/10/2018]
(7)  Sub-paragraphs (1) to (6) —
(a)shall not apply to any activity of dealing in capital markets products which involves customer account; and
[S 667/2018 wef 08/10/2018]
(b)shall only apply if the employee, when dealing in capital markets products —
(i)does not have access to customers’ trade and order information; and
(ii)is not in a position to control or affect the order or priority of executing customers’ orders.
[S 667/2018 wef 08/10/2018]
(8)  A person shall, when acting as a representative of the holder of a capital markets services licence or person exempt under section 99(1)(a), (b) or (c) of the Act in respect of the activity of product financing or providing custodial services, be exempted from section 99B(1) of the Act, as the case may be.
[S 709/2010 wef 26/11/2010]
[S 667/2018 wef 08/10/2018]
Exemption for approved holding company
9.  An approved holding company shall be exempted from the requirement to hold a capital markets services licence in respect of any regulated activity insofar as its carrying out of such regulated activity is solely incidental to its operation as an approved holding company.
[S 667/2018 wef 08/10/2018]
[G. N. Nos. S 457/2002; S 543/2003]
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Last updated 18 Apr 2024
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