Statute Details
- Title: Securities and Futures (Collective Investment Scheme) (Excluded Arrangements) Notification 2018
- Act Code: SFA2001-S853-2018
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289) (“SFA”)
- Notification No.: S 853
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Date Made: 20 December 2018
- Commencement: 25 December 2018
- Key Provision Focus: Section 2 (Excluded arrangements) for purposes of paragraph (xii) of the definition of “collective investment scheme” in section 2(1) of the SFA
- Current Version Reference: Current version as at 27 March 2026 (per the legislation portal status)
What Is This Legislation About?
The Securities and Futures (Collective Investment Scheme) (Excluded Arrangements) Notification 2018 (“Notification”) is a MAS instrument that clarifies when certain market arrangements will not be treated as a “collective investment scheme” under the Securities and Futures Act (Cap. 289). In practical terms, it carves out specific types of transactions from the regulatory definition, so that they are not subject to the full set of obligations that typically apply to collective investment schemes.
Under the SFA, the term “collective investment scheme” is central to determining regulatory classification. If an arrangement qualifies as a collective investment scheme, it may trigger requirements relating to authorisation, licensing, prospectus obligations, and ongoing conduct and disclosure standards. The Notification therefore plays a gatekeeping role: it identifies arrangements that fall within the definitional framework but are expressly excluded for the purposes of paragraph (xii) of the definition.
In plain language, the Notification addresses two categories of arrangements: (i) securitisation transactions and (ii) arrangements consisting only of the issuance of structured notes. By excluding these from the collective investment scheme definition, MAS signals that these products and transactions are regulated through other parts of the SFA (and related regulatory regimes), rather than being treated as collective investment schemes.
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides the formal title and the date the Notification came into operation. It states that the Notification is the “Securities and Futures (Collective Investment Scheme) (Excluded Arrangements) Notification 2018” and that it comes into operation on 25 December 2018. For practitioners, this matters when assessing whether a transaction entered into before or after the effective date could have been treated differently for regulatory classification purposes.
2. Excluded arrangements (Section 2(1))
The core operative provision is Section 2(1). It provides that, for the purposes of paragraph (xii) of the definition of “collective investment scheme” in section 2(1) of the SFA, each of the following arrangements is not a collective investment scheme:
- (a) a securitisation transaction
- (b) an arrangement that consists only of an issuance of structured notes
This is a definitional exclusion. The wording is important: the Notification does not regulate securitisation transactions or structured notes directly; instead, it determines that these arrangements are outside the collective investment scheme category (at least for the purposes specified). That means the regulatory analysis for such arrangements should proceed by reference to the relevant SFA provisions governing securitisation and structured notes, rather than collective investment scheme requirements.
3. Definitions and cross-references (Section 2(2))
Section 2(2) supplies the meaning of two key terms by cross-referencing other parts of the SFA:
- “securitisation transaction” has the meaning given by section 262(3) of the Act
- “structured notes” has the meaning given by section 240AA(5) of the Act
For legal practitioners, cross-references are not mere drafting conveniences—they are essential to correct classification. The exclusion will only apply if the arrangement meets the statutory definitions in those sections. Accordingly, counsel should review the elements of the SFA definitions (for securitisation transactions and structured notes) and map the transaction documentation and economic substance to those elements.
4. Practical boundary: “consists only of” structured notes
The phrase “consists only of an issuance of structured notes” in Section 2(1)(b) is a potential boundary marker. If an arrangement includes additional components beyond a pure issuance of structured notes—such as pooled participation features, arrangements that resemble collective participation in a fund, or other contractual structures—there may be a question whether it truly “consists only of” such issuance. While the Notification text is brief, this phrase suggests that the exclusion is intended for straightforward structured note issuance arrangements, not hybrid structures that could be characterised as collective investment schemes on other grounds.
How Is This Legislation Structured?
The Notification is short and consists of an enacting formula and two substantive provisions:
- Section 1 (Citation and commencement): identifies the Notification and sets its commencement date.
- Section 2 (Excluded arrangements): lists the arrangements excluded from the definition of “collective investment scheme” for the specified definitional paragraph, and provides cross-referenced definitions for key terms.
There are no schedules or detailed procedural requirements in the Notification itself. Its function is purely definitional and classification-oriented.
Who Does This Legislation Apply To?
The Notification applies to any person or entity whose transaction might otherwise be assessed under the SFA’s definition of “collective investment scheme.” This includes issuers, arrangers, sponsors, financial institutions, and intermediaries involved in structuring securitisation transactions and issuing structured notes in Singapore or in relation to Singapore investors.
Although the Notification is addressed to the market generally, its legal effect is triggered through the SFA’s definitional framework. In other words, it does not impose direct obligations on a particular class of regulated persons; rather, it changes the classification outcome for certain arrangements. Practitioners therefore use it as part of a regulatory mapping exercise: first determine whether the arrangement could fall within the collective investment scheme definition, and then apply the Notification to exclude specified categories.
Why Is This Legislation Important?
1. It reduces regulatory uncertainty and avoids misclassification
Collective investment scheme regulation can be resource-intensive. By expressly excluding securitisation transactions and certain structured note issuances, MAS provides clarity that these arrangements should not be treated as collective investment schemes for the relevant definitional paragraph. This helps market participants structure transactions with greater confidence and reduces the risk of regulatory misclassification.
2. It supports market efficiency while preserving sector-specific regulation
Securitisation transactions and structured notes are typically governed by specialised provisions within the SFA (and related regulatory guidance). The Notification ensures that these instruments remain within their intended regulatory lanes. This is important because securitisation and structured notes often involve complex risk allocation, credit enhancement, and contractual payoff structures that may not align neatly with the policy rationale behind collective investment scheme regulation.
3. It affects compliance planning, documentation, and investor disclosures
From a practitioner’s perspective, the classification of an arrangement influences multiple downstream issues: whether authorisation is required, what prospectus or disclosure regime applies, how marketing and distribution are treated, and what ongoing reporting or conduct obligations may be triggered. By excluding certain arrangements, the Notification can materially change the compliance workstream.
4. It requires careful attention to statutory definitions and transaction boundaries
Because Section 2(2) relies on cross-referenced definitions in the SFA, counsel must verify that the transaction meets the statutory meaning of “securitisation transaction” and “structured notes.” Additionally, the “consists only of” wording for structured notes indicates that the exclusion may not apply to arrangements that include other elements beyond a pure issuance. In practice, this means legal review should focus not only on the label used in transaction documents, but on the substance and structure of the arrangement.
Related Legislation
- Securities and Futures Act (Cap. 289) — particularly:
- Section 2(1) (definition of “collective investment scheme”), including paragraph (xii)
- Section 262(3) (definition of “securitisation transaction”)
- Section 240AA(5) (definition of “structured notes”)
- Futures Act (not directly referenced in the Notification text, but relevant in broader regulatory context for MAS licensing and product regulation)
- Legislation Timeline / Versioning — for confirming the operative version as at the transaction date
Source Documents
This article provides an overview of the Securities and Futures (Collective Investment Scheme) (Excluded Arrangements) Notification 2018 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.