Statute Details
- Title: Securities and Futures (Investor Compensation Scheme) Order 2018
- Act Code: SFA2001-S92-2018
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Key Enabling Provision: Section 181(b) of the Securities and Futures Act
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Legislative Citation: No. S 92
- SL Number: SL 92/2018
- Date Made: 20 February 2018
- Commencement: 23 February 2018
- Status: Current version as at 27 March 2026
- Key Provisions in Extract: (1) Citation and commencement; (2) Fidelity fund amount for Asia Pacific Exchange Pte. Ltd.
What Is This Legislation About?
The Securities and Futures (Investor Compensation Scheme) Order 2018 is a short but important piece of Singapore financial regulation. In practical terms, it sets the minimum funding level for a “fidelity fund” maintained by Asia Pacific Exchange Pte. Ltd. (APEX). This fidelity fund is part of the broader investor protection architecture under the Securities and Futures Act (SFA), designed to provide a measure of compensation to investors in specified circumstances.
Although the Order is brief, it performs a critical regulatory function: it translates the investor compensation scheme concept into a concrete financial requirement. By fixing a minimum amount for the fidelity fund, the Order helps ensure that the scheme has sufficient resources to respond to losses covered by the investor compensation framework. This is particularly relevant in the context of market infrastructure entities, where the integrity and reliability of financial operations are essential to investor confidence.
In plain language, the legislation answers a straightforward question: “How much money must APEX keep in its fidelity fund for the purposes of the investor compensation scheme?” The Order’s answer is a minimum of US$2,500,000.
What Are the Key Provisions?
Section 1: Citation and commencement provides the formal identification and timing of the instrument. It states that the Order is the “Securities and Futures (Investor Compensation Scheme) Order 2018” and that it comes into operation on 23 February 2018. For practitioners, this matters for determining the effective date of the funding requirement and for assessing compliance during the relevant period.
Section 2: Fidelity fund of Asia Pacific Exchange Pte. Ltd. is the substantive provision in the extract. It specifies that, for the purposes of section 181(b) of the Securities and Futures Act, the fidelity fund of APEX “must consist of an amount of not less than US$2,500,000.” This is a minimum capital-like threshold for the fidelity fund.
From a compliance perspective, the key legal effect is that APEX is required to maintain its fidelity fund at or above the stated minimum. The wording “must consist of an amount of not less than” indicates a hard floor rather than a target range. If APEX’s fidelity fund falls below US$2.5 million, it would likely constitute non-compliance with the Order, potentially triggering regulatory attention by MAS and raising questions about whether the investor compensation scheme remains adequately funded.
It is also important to note the statutory linkage. The Order does not stand alone; it is made “in exercise of the powers conferred by section 181(b) of the Securities and Futures Act.” This means the Order should be read as part of the SFA’s investor compensation scheme framework. Practitioners should therefore consider how section 181(b) operates within the broader SFA provisions (including any related requirements concerning the establishment, maintenance, administration, and use of the fidelity fund).
Finally, the Order includes the making clause and signature of MAS’s Managing Director, indicating that MAS has exercised its delegated legislative power. The instrument is dated 20 February 2018, with commencement on 23 February 2018. The short time gap is typical for subsidiary legislation that is intended to take effect promptly after being made.
How Is This Legislation Structured?
The Order is structured as a compact subsidiary instrument with a small number of provisions. Based on the extract, it contains:
(a) Enacting formula (the legal basis for MAS’s power to make the Order);
(b) Section 1 (citation and commencement); and
(c) Section 2 (the fidelity fund minimum amount for APEX).
There are no “Parts” shown in the extract, and the Order appears to be limited in scope. This is consistent with many funding-level Orders: they are designed to set a specific quantitative requirement rather than to create a detailed procedural regime.
Who Does This Legislation Apply To?
The Order is directed at Asia Pacific Exchange Pte. Ltd. It specifies the minimum composition of the fidelity fund that APEX must maintain for the purposes of the investor compensation scheme under the SFA. While the investor compensation scheme ultimately benefits eligible investors, the funding obligation in this Order is imposed on the market infrastructure entity identified in the instrument.
In terms of practical reach, the Order’s compliance burden is on APEX’s governance and finance functions—those responsible for maintaining the fidelity fund at the required minimum. MAS, as regulator, would use the Order as a benchmark when assessing whether the investor compensation scheme is adequately funded.
Why Is This Legislation Important?
Even though the Securities and Futures (Investor Compensation Scheme) Order 2018 is short, it is significant because it supports investor protection through financial preparedness. Investor compensation schemes are only credible if the relevant funds are maintained at adequate levels. By setting a minimum fidelity fund amount, the Order helps ensure that the scheme has resources available when needed.
For practitioners advising regulated entities or investors, the Order is important for two main reasons. First, it provides a clear, enforceable quantitative requirement—US$2,500,000 as a minimum fidelity fund level. Second, it clarifies that the requirement is grounded in the SFA’s delegated legislative framework, meaning it should be treated as part of the statutory investor compensation regime rather than as a standalone policy statement.
From an enforcement and risk-management perspective, the Order can affect how APEX structures its compliance. For example, counsel may need to consider whether the fidelity fund is held in forms that satisfy the “consist of” requirement, how it is measured, and how changes in the fund are documented. While the extract does not address these operational details, the minimum amount requirement is the baseline against which such issues are likely to be evaluated.
Additionally, the Order’s commencement date (23 February 2018) is relevant when reviewing historical compliance, disputes, or regulatory reporting for periods around the effective date. If an investor compensation issue arises, parties may examine whether the fidelity fund was maintained at the required level during the relevant time.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular section 181(b) (the enabling provision for this Order)
- Futures Act — referenced in the provided metadata as related legislation (practitioners should confirm the precise cross-references in the full legal framework)
- Investor Compensation Scheme framework under the SFA — including any provisions governing the establishment, maintenance, and use of fidelity funds
- Legislation timeline / amendments history — to confirm whether the US$2,500,000 minimum has been amended since 2018
Source Documents
This article provides an overview of the Securities and Futures (Investor Compensation Scheme) Order 2018 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.