The Monetary Authority of Singapore (the “MAS”) is proposing to exempt Remote Clearing Members of Singapore-based central clearing counterparties (“CCPs”) from the requirement to hold a capital markets services (“CMS”) licence for trading in futures contracts, subject to conditions. The MAS announced this on 24 April 2015 when it issued a Consultation Paper seeking comments on the proposed exemption. The consultation closed on 15 May 2015.

Exemption from requirement to hold CMS licence

The MAS intends to exempt a Remote Clearing Member which clears futures contracts on a Singapore-based CCP from the requirement to hold a CMS licence in respect of trading in futures contracts provided the Remote Clearing Member:

  1. is incorporated outside Singapore;
  2. does not serve any customer resident in Singapore;
  3. does not carry on business in providing financial services in Singapore;
  4. carries on business in a jurisdiction where the relevant regulator has an arrangement with the MAS for information exchange and cooperation in respect of futures supervision; and
  5. is registered, licensed, approved or otherwise regulated in respect of trading in futures contracts by the relevant regulator in its home jurisdiction.

If a Remote Clearing Member wishes to serve Singapore-based customers, it will have to establish a physical presence in Singapore and apply for a CMS licence.

Draft legislative changes

To implement the exemption, the MAS will amend the Securities and Futures (Exemption from Requirement to Hold Capital Markets Services Licence) Regulations. The draft amendments are set out in Annex 1 to the Consultation Paper.

Reference materials

The following materials are available from the MAS website www.mas.gov.sg