Statute Details
- Title: Securities and Futures (Exemption for Cross-Border Arrangements) (Foreign Related Corporations) Regulations 2021
- Act Code: SFA2001-S760-2021
- Legislative Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Made under section 337(1) of the Securities and Futures Act
- Commencement: 9 October 2021
- Status: Current version (as at 27 Mar 2026)
- Key Provisions (as reflected in the extract):
- Section 2: Definitions
- Section 3: Forms (Form FN set out by the Authority)
- Section 4: Exemption for FRCs of specified persons carrying on qualifying businesses under cross-border arrangements, and their foreign representatives
- Section 5: Exemption for FRCs of specified persons previously carrying on qualifying businesses under cross-border arrangements, and their foreign representatives
- Section 6: Circumstances for exemption (conditions that must be satisfied)
- Noted Amendments in the timeline (from the extract):
- SL 760/2021 (9 Oct 2021)
- Amended by S 229/2023 (effective 31 Dec 2021 and 28 Apr 2023)
- Amended by S 620/2023 (effective 9 Oct 2023)
What Is This Legislation About?
The Securities and Futures (Exemption for Cross-Border Arrangements) (Foreign Related Corporations) Regulations 2021 (“FRC Exemption Regulations”) create a regulatory “pathway” for certain foreign related corporations (“FRCs”) of Singapore “specified persons” to carry on specified regulated activities from abroad, without needing to obtain a full capital markets services licence in Singapore for those activities—provided strict conditions are met.
In plain language, the Regulations recognise that some Singapore groups structure their capital markets businesses through foreign affiliates. Where those foreign affiliates carry on a “qualifying business” under a “cross-border arrangement” with the Singapore specified person, the Monetary Authority of Singapore (“MAS”) may allow an exemption. This reduces duplication of licensing while still preserving regulatory oversight through conditions relating to conduct, reporting, and the role of “foreign representatives”.
The Regulations also address a transitional scenario: where an FRC previously carried on a qualifying business under a cross-border arrangement, the Regulations can extend exemption to support continuity, subject to the circumstances in the exemption provisions. Overall, the Regulations are designed to balance market access and operational flexibility with Singapore’s investor protection and market integrity objectives.
What Are the Key Provisions?
1. Definitions and regulatory vocabulary (Section 2)
The Regulations are heavily definition-driven. Section 2 sets out key terms used throughout the exemption framework, including:
- FRC (foreign related corporation): a foreign company that is a related corporation of the specified person.
- Specified person: includes persons exempt from holding a capital markets services licence under specified provisions of the Securities and Futures Act, and also includes a specified licence holder (with an important carve-out for fund management licences limited to portfolio management for venture capital funds).
- Cross-border arrangement: an arrangement between an FRC and the specified person under which the FRC carries on a qualifying business.
- Foreign representative: a representative of the FRC who carries out for the FRC any regulated activity in respect of which the FRC is carrying on the qualifying business.
- Foreign regulatory authority: an authority (or certain non-governmental organisation) in a foreign jurisdiction that performs functions corresponding to MAS’s regulatory functions.
- AML/CFT requirement: a foreign law or regulatory requirement for detection or prevention of money laundering and terrorist financing.
Section 2 also defines particular contract categories relevant to the qualifying business concept, including block futures contracts and OTC derivatives (including foreign exchange OTC derivatives contracts and specified OTC derivatives contracts). These definitions matter because the exemption is not open-ended; it is tied to particular regulated activities and product types.
2. Qualifying business and the notice-based “eligibility” concept (Section 2(2))
A central feature is that “qualifying business” is defined by reference to the specified person’s exemption status and the nature of the regulated activities. The extract shows that qualifying business depends on whether the specified person is exempt from licensing under particular provisions of the Act, and then further distinguishes between:
- Regulated activities other than dealing in capital markets products: qualifying business is a business in the regulated activity where the specified person has lodged certain notices with MAS (including notices under specified regulations as they stood before and after 8 October 2018) and has not lodged other notices that would disqualify it.
- Dealing in capital markets products: qualifying business can include dealing, product financing, and custodial services in respect of relevant capital markets products, again tied to whether the specified person has lodged the correct notices with MAS and not lodged disqualifying notices.
- Block futures contracts: there is a specific pathway for dealing in capital markets products that are block futures contracts, tied to an exemption under the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations.
For practitioners, this notice-based structure is crucial. It means the exemption is not merely a matter of corporate relationship (FRC) and cross-border arrangement; it is also a matter of the Singapore specified person’s historical and ongoing compliance posture with MAS notice requirements.
3. Forms (Section 3)
Section 3 provides that Form FN is to be used for the purposes of these Regulations and is set out by MAS (the Authority). While the extract does not reproduce the form itself, the practical implication is that exemption administration will require completion and submission of the prescribed form(s). Lawyers should therefore treat the form requirements as part of the compliance “plumbing” needed to obtain or maintain the exemption.
4. Exemption for current qualifying businesses (Section 4) and for previously carried businesses (Section 5)
Sections 4 and 5 are the operative exemption provisions. Based on the enacting formula and the headings shown in the extract, they operate as follows:
- Section 4 grants an exemption for an FRC of a specified person that is carrying on a qualifying business under a cross-border arrangement, and for the FRC’s foreign representatives who carry out regulated activities in connection with that qualifying business.
- Section 5 grants an exemption for an FRC of a specified person that was previously carrying on a qualifying business under a cross-border arrangement, and for its foreign representatives.
The distinction between “carrying on” and “previously carrying on” is significant for structuring and exit planning. In practice, groups may reorganise, wind down, or change their cross-border arrangements. Section 5 can provide a controlled mechanism to avoid abrupt regulatory gaps, but only if the conditions in the exemption framework are satisfied.
5. Circumstances for exemption (Section 6)
Section 6 sets out the circumstances that must be present for the exemptions in Sections 4 and 5 to apply. The extract indicates that Section 4 and Section 5 are triggered “where all the circumstances mentioned in regulation 6(1) are present”. Although the remainder of the text is truncated in the extract you provided, the structure strongly suggests that regulation 6(1) contains a checklist of conditions—likely including matters such as:
- the existence and scope of the cross-border arrangement;
- the nature of regulated activities and product types that fall within “qualifying business”;
- requirements relating to foreign regulatory oversight (for example, whether the foreign jurisdiction provides adequate regulation and supervision);
- requirements relating to AML/CFT controls and possibly cooperation with MAS or relevant foreign regulatory authorities;
- conditions concerning the role and conduct of foreign representatives.
For legal work, the key point is that exemption is conditional. Even if the corporate structure and notice history appear to qualify, the exemption will fail if any condition in regulation 6(1) is not met. Practitioners should therefore treat regulation 6(1) as the “gatekeeper” provision and conduct a compliance mapping exercise against each condition.
How Is This Legislation Structured?
The Regulations are structured as a short, targeted subsidiary instrument with six main provisions:
- Section 1 sets out the citation and commencement date (9 October 2021).
- Section 2 provides definitions, including the concepts of FRC, specified person, cross-border arrangement, foreign representative, and the product/contract categories relevant to qualifying business.
- Section 3 addresses the prescribed form (Form FN) used for the Regulations’ purposes.
- Section 4 provides the exemption for FRCs currently carrying on qualifying businesses under cross-border arrangements, and for their foreign representatives.
- Section 5 provides the exemption for FRCs previously carrying on qualifying businesses under cross-border arrangements, and for their foreign representatives.
- Section 6 sets out the circumstances required for the exemptions to apply.
Who Does This Legislation Apply To?
The Regulations apply to foreign related corporations of a “specified person” that are engaged in regulated activities through a cross-border arrangement. The exemption is therefore not aimed at the general public or at all foreign firms; it is aimed at a particular category of corporate group structure where the Singapore entity is already within a defined licensing-exemption ecosystem.
In addition, the exemption extends to foreign representatives of the FRC. This matters because regulated activity in practice is often performed by individuals (or representatives) who may be located abroad. The Regulations’ design indicates that MAS intends the exemption to cover not only the corporate entity but also the people acting for it in connection with the qualifying business.
Why Is This Legislation Important?
For practitioners advising financial institutions and corporate groups, these Regulations are important because they provide a legally recognised mechanism to structure cross-border capital markets activities without requiring the foreign affiliate to obtain a full Singapore capital markets services licence for the relevant activities—subject to conditions.
From a compliance perspective, the Regulations also clarify that exemption is not automatic. The notice history embedded in the definition of “qualifying business” and the conditional nature of the exemption in regulation 6(1) mean that lawyers must verify both (i) the Singapore specified person’s eligibility and (ii) the operational and regulatory safeguards in the cross-border arrangement. This is particularly relevant for groups dealing with OTC derivatives, foreign exchange-related contracts, and other product categories where regulatory expectations are stringent.
Finally, the inclusion of a “previously carrying on” exemption (Section 5) is practically significant for corporate transitions. It can reduce the risk of regulatory disruption during restructuring, migration of business lines, or changes in cross-border arrangements—again, but only if the conditions are satisfied and the exemption is properly administered using the prescribed form(s).
Related Legislation
- Securities and Futures Act (Cap. 289) — including section 337(1) (making power) and the licensing framework referenced in the definitions of “specified person”.
- Monetary Authority of Singapore Act 1970 — referenced indirectly through the definition of “foreign regulatory authority”.
- Securities and Futures (Licensing and Conduct of Business) Regulations — referenced through the notice-based eligibility framework and the Second Schedule provisions.
- Financial Action Task Force (FATF) — referenced through the AML/CFT definition context (not as a statute, but as a regulatory benchmark).
Source Documents
This article provides an overview of the Securities and Futures (Exemption for Cross-Border Arrangements) (Foreign Related Corporations) Regulations 2021 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.