Singapore: MAS Consultation Paper On Draft Notices And Guidelines Pursuant To The Securities And Futures Act

Last Updated: 17 October 2017
Article by Eric Chan
Most Read Contributor in Singapore, August 2018

The Monetary Authority of Singapore (the "MAS") has issued a consultation paper on 6 October 2017, inviting comments on proposed new notices and guidelines that elaborate on and set out the requirements of key changes to the regulatory framework of the Securities and Futures Act ("SFA") following the enactment of the Securities and Futures (Amendment) Act 2017 ("SFAA") on 9 January 2017.

The proposals in the present consultation paper (which will likely be the first in a series) cover the following:

  • new MAS Notice on Risk Fact Sheet for Contracts for Differences ("CFDs") ("CFD Notice") and new MAS Guidelines on the CFD Notice ("Guidelines on CFD Notice");
  • amendments to the existing MAS notice on Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licences [Notice No. SFA 04-N13] (last revised 1 November 2016) ("MAS Notice SFA04-N13");
  • amendments to the existing MAS Notice 757 Lending of Singapore Dollar to Non-Resident Financial Institutions (published 28 May 2004) ("MAS Notice 757") and the equivalent notices to take into account the change in the definition of "securities"1 in the SFAA; and
  • new guidelines on the interpretation of the term "persons who commonly invest" in Division 3 of Part XII of the SFA ("Common Investors Guidelines").

New CFD Notice and Guidelines on CFD Notice

MAS is seeking comments on its draft CFD Notice which sets out the circumstances under which a capital markets services licence holder (including financial institutions exempt from holding a capital markets service licence) which is dealing in CFDs with retail investors, must provide a risk fact sheet. The draft CFD Notice also prescribes the format of said risk fact sheet, and the minimum information that must be included. MAS is also seeking comments on the accompanying Guidelines on CFD Notice, which provide further information on compliance with the CFD Notice. These requirements will come into force when the relevant amendments to the SFA take effect.

Amendments to MAS Notice SFA04-N13

Briefly, MAS Notice SFA04-N13 establishes the methodology, which a holder of a capital markets services licence (other than a holder of a capital markets services licence for only providing credit rating services), shall use for calculating its financial resources or adjusted net head office funds, whichever is applicable, and its total risk requirement, pursuant to the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations.

MAS is consulting on consequential amendments to be made to MAS Notice SFA04-N13 to effect changes arising from the SFAA – including changes to product definitions in Part I of the SFA, changes to Part IV of the SFA, and to the Second Schedule to the SFA – to extend the capital markets services licensing regime to over-the-counter derivatives.

Amendments to MAS Notice 757 and equivalent notices

MAS' monetary policy of using the exchange rate as its principal tool is articulated in MAS Notice 757 and the equivalent notices, limiting the lending of Singapore dollars to non-resident financial institutions for speculation in the Singapore dollar foreign exchange market. The below table summarises the classes of financial institutions and their respectively applicable MAS notices:

Notice No. Class of Financial Institution
MAS Notice 757 Banks (except representative offices)
MAS Notice 1105 Merchant banks
MAS Notice 109 Insurance companies (except captive insurers)
MAS Notice 816 Finance companies
MAS Notice SFA 04-N04 Capital markets services license holders that deal in securities

To take into account the change in the definition of "securities" in the SFAA, the MAS has proposed to amend MAS Notice 757 and the equivalent notices as follows:

(a) Scope of application of MAS Notice SFA 04-N04 and definition of "residents"

MAS intends to broadly retain the current scope of application of MAS Notice SFA 04-N04 (which currently applies to capital market services licence holders that conduct the regulated activity of dealing in securities), by applying it to all capital markets services licence holders that carry on a business of dealing in capital markets products that are securities, units in a collective investment scheme, or securities-based derivative contracts. Corresponding amendments will also be made to MAS Notice 757 and the equivalent notices. The aim is to achieve a consistent application of MAS Notice SFA 04-N04 across all securities trading activities (including futures contracts on securities).

(b) Definition of "financial institutions"

MAS also proposes to amend the definition of "financial institutions" in MAS Notice 757 and the equivalent notices, in particular replacing the term "securities dealing" (which currently appears as an example of entities considered to be carrying on businesses in financial services) in paragraph 2.1.2 with "dealing in capital markets products". This is to avoid misconstruction of the existing term "securities dealing" as being limited to dealings in only equity or debt instruments.

New Common Investors Guidelines

MAS is also seeking comments on its proposed new Common Investors Guidelines, which aim to provide interpretative guidance on the term "persons who commonly invest". A new statutory definition to the term was introduced in the SFAA as part of amendments to Division 3 of Part XII of the SFA (which concerns insider training). The Common Investors Guidelines are intended to be operationalised with the taking effect of the relevant amendments to the SFA.

Several things may be noted of these proposed guidelines.

First, the proposed Common Investor Guidelines will clarify that the term may comprise different classes of investors, depending on the product in question. Rather than to specify what are the classes of common investors for each product, the said guidelines will explain the MAS' approach to determining who are the common investors for any particular product. Secondly, the proposed Common Investor Guidelines will also set out, on a non-exhaustive basis, the characteristics of persons who would be considered to be "retail investors", by reference to the following knowledge descriptors and abilities:

  • rational and economically motivated investors, with at least some experience and knowledge of investing in the relevant financial product, but who may not be investment professionals;
  • awareness of the prevailing price of the relevant financial product from time to time; and
  • having the knowledge or ability to obtain generally available information regarding the company or issuer in question, and having the ability to draw inference from and assess the credibility of said information.

Thirdly, MAS is proposing that the test of whether information is considered generally available (under section 215(1)(b)(i) of the SFA) is to ask whether such information has been made known in a manner that would, or would be likely to, bring it to the attention of all classes of persons who commonly invest for the relevant product.

Consultation Period

The consultation period for the present consultation paper ends on 3 November 2017.

A copy of the consultation paper can be assessed here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions