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, October 2017

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”

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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.