This is a starting point for looking up where the Securities and Futures Act puts the rules on reporting, clearing, and trading of derivatives contracts in Singapore.

Reporting, clearing, and trading in separate Parts

Singapore puts the reporting, clearing, and trading of derivatives contracts in separate Parts of the Securities and Futures Act 2001. Reporting is in Part 6A, clearing in Part 6B, and trading in Part 6C1. The body that the Act calls the "Authority" is the Monetary Authority of Singapore (MAS)2.

The Financial Stability Board (FSB) report of November 7, 2022 listed Singapore as "implemented" as of September 2022. The listing covered all three: trade reporting, central clearing, and platform trading3. The table for the five jurisdictions is covered in Overview of Derivatives Regulation in Asia-Pacific.

Section sequence and central sections

The three Parts have the same sequence of sections. The first section of each Part defines terms, and the next is a central section whose title is reporting, clearing, or trading. After that come the sections on MAS's power to obtain information, directions on alternative arrangements, compliance with the laws and practices of the relevant jurisdiction, the power to make regulations, and exemption from the obligation1.

Part Subject Range of sections Central section MAS's power to make regulations Exemption
Part 6A Reporting of derivatives contracts Sections 124 to 129A Section 125 Section 129 Section 129A
Part 6B Clearing of derivatives contracts Sections 129B to 129H Section 129C Section 129G Section 129H
Part 6C Trading of derivatives contracts Sections 129I to 129O Section 129J Section 129N Section 129O

The title of the central section for reporting is "Reporting of specified derivatives contracts". The titles for clearing and trading follow the same form1. Each of the three Parts has a section titled "Power of Authority to make regulations". The central sections can be read as setting obligations because of these titles and because the FSB report lists these reforms as implemented.

As a legal term, a "derivatives contract" is a contract under which a party must, or may have to, perform its obligations at some future time, and whose value is determined by one or more underlying things or by changes in their values. Securities, units in a collective investment scheme, spot contracts, deposits accepted by banks and similar institutions, and insurance contracts are excluded. Regulations can also prescribe contracts as being, or not being, derivatives contracts4.

How to read the contracts covered

The titles of all three central sections refer to "specified derivatives contracts". Which contracts that means, including whether "specified" refers to designation by regulations, is something to look up in the definition section of each Part and the text of the regulations5.

Consider a hypothetical example in which Bank B enters into an OTC derivative with a counterparty in Singapore. All the titles show is that the central sections cover specified derivatives contracts. They do not settle which reporting, clearing, or trading obligation applies, because each Part also has an exemption section.

Institutions are regulated in other Parts

The rules for trade repositories and clearing houses are in Parts separate from the three Parts on reporting, clearing, and trading.

Trade repositories are covered by Part 2A (Trade Repositories). It has sections on applying for and granting a license, canceling a license, and the obligations of a licensed trade repository (managing risks, notifying MAS, keeping records, periodic reports, assisting MAS, and keeping confidentiality). Part 2A also covers the licensing of foreign trade repositories6.

Clearing houses are covered by Part 3 (Clearing Facilities). A clearing house needs approval or recognition from MAS. The Act defines an "approved clearing house" as one approved, and a "recognised clearing house" as one recognized7.

In its list of entities as of the end of September 2022, the FSB's 2022 report names two entities located in Singapore. The trade repository is DTCC Data Repository – Singapore, and the clearing house is SGX Derivatives Clearing Ltd. The former is listed as authorized to operate in two jurisdictions, Australia and Singapore. The latter is listed as authorized to offer clearing services in four, the EU, Singapore, Switzerland, and the UK8. How central clearing works is covered in Central Counterparties: JSCC, LCH, CME and Others.

What is not covered

This page covers only how the Act's Parts are organized. The table of contents was checked against the version published as of October 3, 20269. That version is based on the 2020 Revised Edition, in operation from December 31, 2021. This date is for the Act as a whole, not the date on which Parts 6A to 6C came into operation10.

The following is not covered on this page.

  • The content of the text of each section
  • The names and content of the regulations that set out the reporting, clearing, and trading obligations in detail
  • The range of contracts and parties subject to the obligations, the numerical thresholds, and the conditions for exemption
  • The dates on which Parts 6A to 6C came into operation, and later amendments
  • Penalties for breach
  • MAS's rules on margin and capital for non-cleared trades
  • How trade repositories and clearing houses connect to the obligations in Parts 6A and 6B
  • The difference between approval and recognition of a clearing house

Notes

  1. Singapore Statutes Online, "Securities and Futures Act 2001", Table of Contents (Parts 6A to 6C). Each Part runs in this order: definitions, the obligation, power to obtain information, directions on alternative arrangements, compliance with the laws and practices of the relevant jurisdiction, power to make regulations, and exemption. ↩ ↩2 ↩3

  2. Singapore Statutes Online, "Securities and Futures Act 2001", section 2 (Interpretation), definition of "Authority". "MAS" is an abbreviation. ↩

  3. Financial Stability Board, "OTC Derivatives Market Reforms: Implementation progress in 2022" (November 7, 2022), page 2, Table 1, the Singapore row. "Blue" in the table is written here as "implemented". ↩

  4. Singapore Statutes Online, "Securities and Futures Act 2001", section 2, definition of "derivatives contract". Paragraph (a) is the general definition, (b) covers contracts prescribed by regulations, and (c) to (i) are exclusions. The text paraphrases it. ↩

  5. Singapore Statutes Online, "Securities and Futures Act 2001", Table of Contents. The definition sections of the Parts are sections 124, 129B, and 129I ("Interpretation of this Part"). ↩

  6. Singapore Statutes Online, "Securities and Futures Act 2001", Table of Contents, Part 2A. Licensing is in sections 46D and 46E, cancellation in sections 46G and 46H, the obligations of licensed institutions in sections 46J to 46O, and foreign trade repositories in Division 3. ↩

  7. Singapore Statutes Online, "Securities and Futures Act 2001", Table of Contents, Part 3 (sections 49 and 51), and the section 2 definitions. An "approved clearing house" is under section 51(1)(a), and a "recognised clearing house" under section 51(1)(b) or (2). ↩

  8. The FSB's 2022 report, Table D (page 11), "DTCC Data Repository – Singapore" (AU and SG), and Table G (page 14), "SGX Derivatives Clearing Ltd" (EU, SG, CH, and UK). The tables show the status at the end of September 2022. ↩

  9. Singapore Statutes Online, "Securities and Futures Act 2001", the display "Current version as at 03 Oct 2026". ↩

  10. Singapore Statutes Online, "Securities and Futures Act 2001", the note under "2020 REVISED EDITION". It incorporates amendments up to December 1, 2021 and came into operation on December 31, 2021. ↩