Statute Details
- Title: Securities and Futures (Licensing and Conduct of Business) Regulations
- Act Code: SFA2001-RG10
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act 2001 (SFA 2001) (as indicated by the Act code and regulatory framework)
- Status: Current version (as at 27 Mar 2026)
- Commencement Date: Not specified in the provided extract
- Part I: Preliminary (ss. 1–2)
- Part II: Licensing, representative notification and related matters (ss. 3–14A)
- Part III: Customer’s moneys and assets (ss. 15–38)
- Part IV: Conduct of business (ss. 39–47E)
- Part V: Dealing in government securities (s. 48)
- Part VI: Miscellaneous (ss. 49–55)
- Part VII: Exemptions (ss. 56–64)
- Schedules: First (repealed), Second (exemptions), Third (fees), Fourth (product advertisement)
What Is This Legislation About?
The Securities and Futures (Licensing and Conduct of Business) Regulations (“SFA Regulations”) are a core regulatory instrument under Singapore’s securities and futures framework. In plain language, they set out the detailed rules that govern (i) how market intermediaries are licensed, (ii) how their representatives are notified and managed, and (iii) how licensed persons must handle customers’ money and assets and conduct their business.
While the Securities and Futures Act 2001 (SFA) provides the overarching statutory architecture—such as licensing categories, regulated activities, and enforcement powers—the Regulations translate those broad requirements into operational obligations. They are therefore highly practical: they specify what documents must be lodged, what registers must be kept, what deposits are required, and what conduct standards apply to trading, advertising, credit, and risk disclosures.
In addition, the Regulations include an exemptions framework. Certain persons or activities may be exempt from specified provisions of the SFA, but only if the conditions in the Regulations are met. For practitioners, this matters because exemptions can be the difference between lawful conduct and regulatory breach, particularly where an intermediary’s business model does not fit neatly within standard licensing pathways.
What Are the Key Provisions?
1. Licensing mechanics and representative notification (Part II). Part II focuses on the “plumbing” of licensing and ongoing compliance. It begins with procedural requirements for forms and lodgment (including provisions for representative-related undertakings and notifications). The Regulations also require maintaining a register of interests in listed specified products (ss. 4 and 4A), and they address how representatives must update information when particulars change or when additional regulated activities are undertaken (s. 5).
Part II also contains the financial and status mechanics of licensing. Notably, it provides for a deposit to be lodged in respect of certain capital markets services licences (s. 7) and sets out return of deposit (s. 8), lapse of licences (s. 9), and cessation of status of appointed representatives (s. 9A). These provisions are significant because they link licensing continuity and representative status to regulatory safeguards and administrative triggers.
2. Governance duties of licence holders and directors (ss. 12–13H). The Regulations impose duties on holders of capital markets services licences, including requirements relating to the appointment of key officers and directors (s. 12) and the duties of licence holders (s. 13). They further introduce criteria for determining breach by chief executive officers and directors (ss. 13A and 13C), and they tailor governance expectations for specific licence types—such as fund management (ss. 13B and 13C) and real estate investment trust (REIT) management (ss. 13D–13H).
For REIT management, the Regulations include detailed independence requirements. They require disclosure of a director’s independence in annual reports (s. 13E) and set out independence from management of the holder and the REIT (s. 13F), independence from business relationships (s. 13G), and independence from substantial shareholders of the holder and substantial unitholders of the REIT (s. 13H). Practitioners should treat these as high-risk areas: independence failures can lead to regulatory findings and reputational harm, and they may also affect compliance with corporate governance expectations.
3. Customer’s moneys and assets safeguards (Part III). Part III is one of the most operationally important sections of the Regulations. It establishes rules for how licensed persons must handle customer money and customer assets, including segregation, custody arrangements, investment restrictions, and withdrawal mechanics.
For customer’s moneys, the Regulations define what counts as money received on account of customers (s. 16) and require maintenance of a trust account with specified financial institutions (s. 17). They also require notifications and acknowledgments from those institutions (s. 18) and impose disclosure obligations to customers (s. 18A). The Regulations address how customer money may be deposited with approved clearing houses (s. 19), how it may be invested (s. 20), and special rules for moneys received from retail customers (s. 20A). Withdrawal of money from trust accounts is regulated (s. 21), and the treatment of interest arising from trust accounts is addressed (s. 22). There are also provisions preventing the placement of the licensee’s own money in trust accounts except as permitted (s. 23) and clarifying that lawful claims or liens are not affected (s. 24).
For customer’s assets, Division 3 requires duties on receipt of customer assets (s. 26) and maintenance of a custody account with specified custodians (s. 27). As with moneys, there are disclosure obligations to customers (s. 27A) and notification/acknowledgment from custodians (s. 28). The Regulations include suitability requirements for custodians (s. 29) and rules for customer assets held with approved clearing houses (s. 30). They also require customer agreements and custody agreements (ss. 31–32), and they address complex issues such as lending of customer’s specified products (s. 33) and mortgage of customer’s assets (s. 34). Special provisions apply to assets received from retail customers (s. 34A). Withdrawal of customer assets is regulated (s. 35), and again, lawful claims or liens are not affected (s. 36).
4. Conduct of business standards (Part IV). Part IV governs day-to-day conduct. It requires books of account (s. 39), provision of statements of account to customers (s. 40), and documentation required by the Authority, approved exchanges, or approved clearing houses (s. 41). It also addresses contract notes (s. 42), limits for unsecured credit and credit facilities (s. 43), and the priority of customers’ orders (s. 44).
Part IV also includes rules on specified products borrowing and lending (s. 45), and a detailed framework for product advertisements (ss. 46–46AD). These provisions include approval requirements for product advertisements (s. 46AA), exemptions from regulation 46(1) (s. 46AB), and record-keeping of approvals (s. 46AC). They also include rules for advertisements other than product advertisements (s. 46AD) and prohibit certain representations (s. 46A).
Finally, Part IV includes trading and risk disclosure standards. It sets trading standards (s. 47), addresses disclosure of certain interests in underwriting agreements (s. 47A), and regulates dealing in securities as principal (s. 47B) and dealing as agent (s. 47BA). It also covers trading against customers (s. 47C), cross-trading (s. 47D), and general risk disclosure requirements (s. 47DA), including risk disclosure by certain persons (s. 47E). For litigators and compliance counsel, these provisions are frequently implicated in disputes about suitability, conflicts of interest, and whether disclosures were adequate and timely.
How Is This Legislation Structured?
The Regulations are organised into seven Parts. Part I contains preliminary matters, including citation and definitions (ss. 1–2). Part II deals with licensing and representative-related processes, including forms, deposits, licence lapsing, cessation of representative status, governance duties, and fit-and-proper requirements (including s. 14A). Part III is split into divisions for definitions, customer’s moneys, customer’s assets, and miscellaneous computation/holding rules. Part IV sets conduct-of-business requirements, including documentation, customer order priority, credit limits, advertising controls, and trading/risk disclosure standards. Part V contains a specific dealing-in-government-securities provision. Part VI includes miscellaneous matters such as position limits and offences. Part VII provides exemptions and defines the scope of those exemptions through specified conditions and schedules.
Who Does This Legislation Apply To?
In general, the Regulations apply to holders of capital markets services licences and their representatives, as well as other persons to the extent they fall within specified definitions or are granted exemptions. The obligations in Parts II–IV are directed at licence holders because they are the entities that manage customer money and assets, interact with customers, and conduct regulated activities.
However, the Regulations also extend to certain persons and activities through exemptions (Part VII) and specific provisions addressing particular categories (for example, rules tailored to fund management and REIT management governance). Practitioners should therefore read the definitions in Part I and the relevant licensing/regulated activity provisions in the SFA framework to confirm whether a given entity is a “holder” or “representative” for these purposes.
Why Is This Legislation Important?
The SFA Regulations are important because they operationalise investor protection. The customer money and assets rules in Part III are designed to reduce the risk of customer funds being misused, commingled, or exposed to the intermediary’s own insolvency. The trust account and custody account framework, coupled with disclosure and agreement requirements, creates a compliance trail that regulators and courts can rely on in enforcement and dispute contexts.
From a governance and accountability perspective, the director and CEO duties (including breach criteria and REIT independence requirements) are significant. They ensure that senior management cannot treat compliance as a purely operational matter; instead, the Regulations embed compliance expectations into board-level oversight and independence structures.
Finally, the conduct-of-business provisions in Part IV—especially advertising approvals, trading standards, credit limits, order priority, and risk disclosures—directly affect how intermediaries market products and execute trades. In practice, many regulatory investigations and civil claims turn on whether these standards were met, whether disclosures were accurate and complete, and whether conflicts were properly managed.
Related Legislation
- Securities and Futures Act 2001 (authorising Act; licensing and conduct framework)
- Accounting Standards Act 2007
- Electronic Transactions Act 2010
- Futures Act
- Income Tax Act 1947
- Timeline (legislative versioning/amendment history reference)
Source Documents
This article provides an overview of the Securities and Futures (Licensing and Conduct of Business) Regulations for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.