Statute Details
- Title: Securities and Futures (Clearing Facilities) Regulations 2013
- Act Code: SFA2001-S464-2013
- Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Commencement: 1 August 2013
- Status: Current version (as at 27 Mar 2026)
- Enacting formula (key powers): Sections 60, 77, 81Q, 339(3) and 341 of the Securities and Futures Act
- Parts: Part I (Preliminary); Part II (Approval/Recognition); Part III (Approved Clearing Houses); Part IV (Recognised Clearing Houses); Part V (Insolvency); Part VI (Miscellaneous)
- Key provisions (from extract): s 2 (definitions); s 3 (forms); s 4 (fees); s 5 (keeping of books and information); s 6–10 (approval/recognition); s 11–21 (approved clearing houses); s 22–30 (customers’ money, assets, business rules); s 31–33 (authority approvals for key persons); s 34–42 (recognised clearing houses); s 43–49B (customers’ money and authority approvals); s 50 (insolvency); s 52 (offences); s 54 (revocation)
What Is This Legislation About?
The Securities and Futures (Clearing Facilities) Regulations 2013 (“Clearing Facilities Regulations”) form a regulatory framework for clearing houses that clear and settle securities and futures transactions in Singapore. In practical terms, the Regulations are designed to ensure that clearing houses operate safely, manage customer assets properly, and maintain robust governance and risk controls. Because clearing houses sit at the centre of market infrastructure—often holding or moving large volumes of money and collateral—the Regulations focus heavily on safeguarding customers’ money and assets and on ensuring continuity of critical functions.
The Regulations distinguish between two categories of clearing houses: “approved clearing houses” and “recognised clearing houses”. An approved clearing house is subject to a more detailed set of obligations under Part III, while a recognised clearing house is regulated under Part IV. The distinction reflects differences in regulatory intensity and the manner in which each type is authorised or recognised by the Monetary Authority of Singapore (“Authority”).
Overall, the Regulations operationalise the Securities and Futures Act by specifying procedural and substantive requirements: how a clearing house applies for approval/recognition, minimum standards for approval/recognition, ongoing operational obligations (including reporting and information provision), and detailed rules for segregation, permissible use, investment, computation, verification and reconciliation of customers’ money and assets.
What Are the Key Provisions?
Preliminary matters: definitions, forms and fees. Part I sets the baseline administrative requirements. Section 2 provides definitions that govern interpretation. Section 3 requires the use of specified forms for purposes of Part III of the Act and the Regulations. Section 4 provides for payment of fees to the Authority as specified in the Second Schedule. Section 5 requires keeping of books and other information—an important compliance foundation for audits, supervisory review, and enforcement.
Approval and recognition: applications, minimum requirements and status changes. Part II governs how a clearing house is approved or recognised. Section 6 addresses applications for approval or recognition. Section 7 sets minimum requirements for approval or recognition, while Section 8 provides criteria for deciding whether the applicant should be approved as an approved clearing house or recognised as a recognised clearing house. Section 9 deals with applications for change in status, and Section 10 provides for cancellation of approval or recognition. For practitioners, these provisions are critical because the category of clearing house determines the detailed compliance regime that follows in Parts III and IV.
Regulation of approved clearing houses: governance, reporting, confidentiality, and crisis preparedness. Part III imposes ongoing obligations on approved clearing houses. Section 11 requires notification to the Authority of certain matters. Section 12 requires the approved clearing house to seek the Authority’s approval for specified actions (the precise triggers are set out in the Regulations and linked provisions in the Act). Section 13 addresses obligations of members with respect to money or assets received from customers, reinforcing that customer asset handling is not merely an institutional issue but also a member-level responsibility.
Operational transparency and resilience are addressed through Sections 14–19. Section 14 requires submission of periodic reports. Section 15 provides exceptions to confidentiality obligations—important where disclosure is necessary for regulatory oversight or systemic risk management. Section 16 requires a business continuity plan, and Section 17 requires a recovery and resolution plan, reflecting the Authority’s expectation that clearing houses can continue critical operations and manage stress events. Section 18 requires provision of information, and Section 19 governs transmission and storage of user information, which is particularly relevant to data integrity, cybersecurity, and auditability.
Clearing fees regulation. Section 21 provides for regulation of clearing fees of specified approved clearing houses. This is a market-structure control: it helps prevent excessive or unfair fee practices in relation to clearing services, and it supports the Authority’s ability to manage incentives and cost pass-through in the clearing ecosystem.
Customers’ money and other assets: segregation, permissible use and investment, and daily controls. Division 2 of Part III (Sections 22–28) is the heart of the customer asset regime for approved clearing houses. Section 22 applies the Division. Section 23 requires segregation of customers’ money held by an approved clearing house. Segregation is a foundational protection: it aims to ensure that customer funds are not commingled with the clearing house’s own assets in a manner that would undermine recovery in insolvency or enforcement scenarios.
Sections 24 and 25 restrict permissible use and permissible investment of customers’ money and assets. These provisions are designed to balance operational needs (e.g., liquidity management) with strict limitations to reduce the risk of customer funds being used for unintended purposes. Sections 26–28 impose ongoing operational discipline: daily computation of customers’ money and assets (s 26), verification of money and assets placed with the clearing house (s 27), and reconciliation (s 28). For practitioners, these requirements are not merely procedural; they create measurable controls that can be tested in supervision, internal audit, and regulatory examinations.
Business rules and amendments. Division 3 of Part III (Sections 29–30) requires approved clearing houses to have business rules and to specify their content (s 29). Section 30 governs amendment of business rules. Business rules typically cover membership, default procedures, settlement processes, risk management, and operational governance. The requirement that amendments be controlled ensures that changes affecting customer protection and market integrity do not occur unilaterally without appropriate oversight.
Authority approvals for substantial shareholding and key persons. Division 4 of Part III (Sections 31–33) requires Authority approval for certain corporate and leadership matters. Section 31 addresses application and criteria for approval to acquire substantial shareholding. Sections 32 and 33 address application for approval of the chairperson, chief executive officer, director and key persons, and the criteria for such approvals. These provisions reflect the “fit and proper” approach embedded in Singapore’s financial regulation: the Authority must be satisfied that persons in control positions have appropriate competence, integrity, and capacity to manage clearing-house risks.
Recognised clearing houses: parallel obligations with additional participant supervision. Part IV mirrors much of Part III but tailors obligations to the recognised category. Division 1 (Sections 34–42) includes notification duties (s 34), obligations regarding members and customer assets (s 35), periodic reporting (s 36), confidentiality exceptions (s 37), business continuity (s 38), information provision (s 39), transmission and storage of user information (s 40), and supervision of participants (s 41). Section 42 regulates clearing fees of specified recognised clearing houses.
Division 2 of Part IV (Sections 43–49) contains the customers’ money and assets regime for recognised clearing houses: segregation (s 44), permissible use (s 45), permissible investment (s 46), daily computation (s 47), verification (s 48), and reconciliation (s 49). Division 3 (Sections 49A–49B) covers Authority approval for shareholding and key persons for recognised clearing houses.
Insolvency and enforcement. Part V (Section 50) provides that Division 4 of Part III of the Act applies in the insolvency context. This cross-reference is significant: it signals that the clearing-house regulatory framework is integrated with insolvency protections and supervisory powers under the Act. Part VI includes miscellaneous provisions, including Section 51 (criteria for determining whether a director or executive officer failed to discharge duties), Section 52 (offences), Section 53 (non-applicability of section 339(2) of the Act), and Section 54 (revocation). Together, these provisions support enforceability and clarify the legal consequences of non-compliance.
How Is This Legislation Structured?
The Regulations are structured in six parts. Part I contains preliminary provisions: citation and commencement, definitions, forms, fees, and record-keeping. Part II sets the approval/recognition pathway, including applications, minimum requirements, decision criteria, changes in status, and cancellation. Part III regulates approved clearing houses in four divisions: (i) obligations and governance matters; (ii) customers’ money and other assets; (iii) business rules; and (iv) Authority approvals for substantial shareholding and key persons. Part IV regulates recognised clearing houses with a similar division structure, adding participant supervision. Part V addresses insolvency by applying specified provisions of the Act. Part VI contains miscellaneous provisions, including offences and revocation.
Who Does This Legislation Apply To?
The Regulations apply to clearing houses operating in Singapore’s securities and futures clearing ecosystem, specifically those that are approved clearing houses or recognised clearing houses under the Securities and Futures Act framework. The obligations in Parts III and IV apply to the clearing house itself and, in certain respects, to its members and participants (for example, where the Regulations impose duties relating to money or assets received from customers and where participant supervision is required).
In addition, the Regulations impose compliance expectations that extend to individuals in governance roles. Sections 31–33 (approved clearing houses) and 49A–49B (recognised clearing houses) require Authority approval for key persons and set criteria for such approvals. Section 51 further addresses when directors or executive officers are considered to have failed to discharge duties, which is relevant to personal accountability and enforcement risk.
Why Is This Legislation Important?
For practitioners, the Clearing Facilities Regulations are important because they translate high-level statutory objectives—market integrity, systemic stability, and customer protection—into operational requirements that can be audited and enforced. The customer asset regime (segregation, permissible use, investment limits, daily computation, verification and reconciliation) is particularly consequential. These rules are designed to reduce the risk of loss to customers and to improve recoverability and transparency in stress events or insolvency.
The Regulations also matter for governance and supervisory oversight. Requirements for business continuity plans and recovery and resolution plans reflect the Authority’s expectation that clearing houses must be resilient and capable of managing defaults and operational disruptions. The provisions on information provision, transmission and storage of user information, and periodic reporting support ongoing supervision and enable timely regulatory intervention.
Finally, the Regulations have direct commercial and compliance implications: clearing fee regulation, business rule content and amendment controls, and Authority approval for substantial shareholdings and key persons affect how clearing houses structure their operations, governance, and corporate actions. For legal advisers, understanding these provisions is essential for advising on regulatory approvals, compliance programmes, member agreements, default management frameworks, and crisis preparedness.
Related Legislation
- Securities and Futures Act (Cap. 289) (authorising Act; provides the overarching framework and cross-referenced insolvency provisions)
- Accounting Standards Act 2007 (relevant to definitions of “accounting standards” used in the Regulations)
- Companies Act (relevant to corporate governance concepts and potentially to how directors and officers are treated in enforcement contexts)
- Futures Act (historical/related market infrastructure legislation referenced in the metadata context)
Source Documents
This article provides an overview of the Securities and Futures (Clearing Facilities) Regulations 2013 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.