Statute Details
- Title: Securities and Futures (Exemption for Cross-Border Arrangements) (Foreign Related Corporations) Regulations 2021
- Act Code: SFA2001-S760-2021
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Power: Monetary Authority of Singapore (MAS) under section 337(1) of the Securities and Futures Act
- Commencement: 9 October 2021
- Status: Current version (as at 27 March 2026)
- Key Provisions (as reflected in the extract):
- Section 1: Citation and commencement
- Section 2: Definitions (including “cross-border arrangement”, “FRC”, “foreign representative”, and “qualifying business”)
- Section 3: Forms (Form FN to be used for these Regulations)
- Section 4: Exemption for FRCs of specified persons carrying on qualifying businesses in regulated activities under cross-border arrangements, and their foreign representatives
- Section 5:
- Exemption for FRCs of specified persons previously carrying on qualifying businesses in regulated activities under cross-border arrangements, and their foreign representatives
- Section 6: Circumstances for exemption (conditions that must be satisfied)
- Amendments Noted in 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 (“the Regulations”) create a targeted exemption framework within Singapore’s capital markets licensing regime. In essence, the Regulations allow certain foreign related corporations (“FRCs”)—that are part of a corporate group with a “specified person”—to carry on specified regulated activities from outside Singapore under a “cross-border arrangement”, without needing to hold a Singapore capital markets services licence for those activities, provided strict conditions are met.
The Regulations are designed to address a practical compliance problem: corporate groups often structure their regulated capital markets activities across jurisdictions. Where the Singapore entity (the “specified person”) is already exempt from holding a licence (or is a “specified licence holder”), the group may still need its foreign affiliate to perform regulated functions abroad. Without an exemption, the foreign affiliate could be treated as carrying on regulated activities in Singapore (or in a way that triggers Singapore licensing requirements), even though the activity is performed under a cross-border arrangement.
Accordingly, the Regulations focus on (i) defining what counts as a “cross-border arrangement” and a “qualifying business”; (ii) identifying the relevant persons (FRCs and their “foreign representatives”); and (iii) setting out the circumstances in which an exemption applies. The Regulations also contemplate transitional scenarios—captured in the separate exemption for FRCs that were “previously” carrying on qualifying businesses.
What Are the Key Provisions?
1. Definitions that drive the exemption
The Regulations’ operative scope is largely determined by the definitions in section 2. Several terms are central:
- FRC (foreign related corporation): a foreign company that is a related corporation of the specified person.
- Specified person: a person exempt from the requirement to hold a capital markets services licence under specified provisions of the Securities and Futures Act or the Securities and Futures (Licensing and Conduct of Business) Regulations, or a “specified licence holder” (with a carve-out for certain fund management licence holders).
- Cross-border arrangement: an arrangement between an FRC of a specified person and the specified person under which the FRC carries on a “qualifying business”.
- Foreign representative: a representative of the FRC who carries out regulated activity for the FRC in respect of which the FRC is carrying on the qualifying business under the cross-border arrangement.
- Qualifying business: a business in specified regulated activities, but only where the specified person has made the required filings/notifications to MAS (and has not made certain other filings) under the earlier licensing and conduct framework.
2. “Qualifying business” and the filing/notification conditions
The definition of “qualifying business” is detailed and is one of the most practitioner-relevant parts of the Regulations. It ties eligibility to whether the specified person has lodged particular notices with MAS under regulation 14(4)(a) of the Securities and Futures (Licensing and Conduct of Business) Regulations (as in force immediately before 8 October 2018, or under the updated provisions), and whether the specified person has not lodged a notice under regulation 14(4)(b) before, on, or after 8 October 2018.
Further, the definition distinguishes between different categories of regulated activities. For example, where the specified person is exempt from holding a licence for regulated activities other than “dealing in capital markets products”, the qualifying business is the business in the relevant regulated activity for which the specified person has lodged the required notice and has not lodged the disqualifying notice. Where the exemption relates to “dealing in capital markets products”, the qualifying business is structured around particular types of capital markets services products and includes a combination of regulated activities such as:
- dealing in capital markets products (for the relevant product types);
- product financing in respect of specified products;
- providing custodial services in respect of the relevant capital markets products that are specified products.
The extract also indicates a further category for block futures contracts, where the specified person is exempt under a specific paragraph of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations, but the broader point is that “qualifying business” is not open-ended. It is anchored to particular regulated activities and product types, and to the specified person’s compliance history with MAS notifications.
3. Exemption for current qualifying businesses (Section 4)
Section 4 provides the principal exemption. Where all the circumstances in regulation 6(1) are present, an FRC of a specified person carrying on qualifying businesses in regulated activities under cross-border arrangements—and its foreign representatives—may be exempt from the requirement to hold a capital markets services licence for those regulated activities.
Although the extract does not reproduce the full text of regulation 6(1), the structure is clear: section 4 is the “grant” provision, and regulation 6(1) supplies the conditions. Practically, counsel should treat regulation 6(1) as the compliance checklist that must be satisfied for the exemption to apply. This typically includes requirements relating to the cross-border arrangement’s design, the role of the specified person, and safeguards ensuring that the foreign activity is appropriately supervised and aligned with Singapore’s regulatory objectives.
4. Transitional exemption for previously carried on qualifying businesses (Section 5)
Section 5 mirrors section 4 but addresses a transitional scenario: it grants an exemption for FRCs of specified persons that were previously carrying on qualifying businesses in regulated activities under cross-border arrangements, and for their foreign representatives, again subject to the circumstances in regulation 6(1).
This matters for group reorganisations, changes in business lines, or corporate restructuring where an FRC may have stopped or changed its activities and later seeks to rely on the exemption for continuity. For practitioners, the key question will be whether the facts fall within the “previously carrying on” concept and whether the exemption’s conditions are met at the relevant time.
5. Forms (Section 3)
Section 3 provides that Form FN is to be used for the purposes of these Regulations, and that the form is set out on the Authority. In practice, this means that even where an exemption is available, there may be an administrative step—such as filing, notification, or submission—required to operationalise the exemption. Lawyers should confirm the current version of Form FN and the manner of submission (including any supporting documents) as part of implementation.
6. Circumstances for exemption (Section 6)
Section 6 is the gatekeeper. The Regulations repeatedly refer to “where all the circumstances mentioned in regulation 6(1) are present”. This indicates that the exemption is conditional and not automatic. For a practitioner, the most important work is to map the client’s cross-border arrangement and compliance controls against each element of regulation 6(1).
Given the Regulations’ definitions include references to AML/CFT requirements and the FATF (Financial Action Task Force), it is reasonable to expect that regulation 6(1) includes requirements relating to anti-money laundering and countering the financing of terrorism standards, as well as the regulatory equivalence or alignment of the foreign jurisdiction’s regime. The inclusion of “foreign regulatory authority” and “foreign jurisdiction” definitions also suggests that the exemption may depend on the presence of appropriate foreign regulatory oversight and cooperation.
How Is This Legislation Structured?
The Regulations are structured as a short, targeted instrument with six sections:
- Section 1: Citation and commencement (9 October 2021).
- Section 2: Definitions, including the concepts of cross-border arrangement, FRC, foreign representative, and the detailed definition of qualifying business.
- Section 3: Forms—Form FN is prescribed for use under the Regulations.
- Section 4: Exemption for FRCs carrying on qualifying businesses under cross-border arrangements (current activities).
- Section 5: Exemption for FRCs previously carrying on qualifying businesses (transitional/continuity scenario).
- Section 6: Circumstances for exemption—conditions that must be satisfied for sections 4 and 5 to apply.
Who Does This Legislation Apply To?
The Regulations apply to foreign related corporations of a “specified person” and to the foreign representatives of those FRCs. The specified person is not any Singapore entity; it is limited to persons who are exempt from holding a capital markets services licence under specified provisions of the Securities and Futures Act and related regulations, or to certain “specified licence holders” (with a carve-out for a particular fund management licence category).
In practical terms, the Regulations are relevant to corporate groups where Singapore’s regulatory posture already provides a licensing exemption for the specified person, and where the group’s foreign affiliate performs regulated capital markets functions abroad under a cross-border arrangement. The exemption is not designed for general market participants; it is a structured relief mechanism tied to the group’s existing regulatory status and to specific qualifying business categories.
Why Is This Legislation Important?
For practitioners, the Regulations are important because they provide a legally workable pathway for cross-border group structures in capital markets. Without such exemptions, foreign affiliates performing regulated activities could face licensing exposure or compliance uncertainty. The Regulations reduce that risk by clarifying when an FRC and its foreign representatives can operate without a Singapore licence for the relevant regulated activities.
From an enforcement and compliance perspective, the Regulations also reinforce Singapore’s regulatory expectations. The exemption is conditional on meeting the circumstances in regulation 6(1), and the definition of qualifying business is tied to MAS notification history. This means that the exemption is not merely a formal label; it is a compliance outcome that depends on documented filings and ongoing adherence to the prescribed conditions.
Finally, the existence of both sections 4 and 5 highlights that the Regulations are designed to support both ongoing and transitional arrangements. This is particularly relevant for legal teams managing reorganisations, changes to product lines (e.g., dealing in capital markets products, product financing, custodial services), or adjustments to how the group allocates regulated functions across jurisdictions.
Related Legislation
- Securities and Futures Act (Cap. 289) (including section 337(1) and the licensing framework for capital markets services)
- Securities and Futures (Licensing and Conduct of Business) Regulations (including regulation 14 and the Second Schedule provisions referenced in the definitions)
- Monetary Authority of Singapore Act 1970 (referenced indirectly through the definition of “foreign regulatory authority”)
- Financial Action Task Force (FATF) (referenced through AML/CFT-related definitions)
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.