Statute Details
- Title: Securities and Futures (Trading Venues for Derivatives Contracts in the European Union) Regulations 2019
- Act Code: SFA2001-S242-2019
- Type: Subsidiary Legislation (SL)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Commencement: 2 April 2019
- Key Provisions:
- Section 2: Purpose of the Regulations
- Section 3: Exemption from section 7(1) of the Securities and Futures Act
- Section 4: Prescribed facilities for section 129J(1)(a) of the Act
- Schedule: Facilities (prescribed trading venues/facilities)
- Legislative Status (as provided): Current version as at 27 Mar 2026
- Amendment History (from extract): Amended by S 1008/2020 and S 1115/2020; original SL 242/2019 dated 2 Apr 2019
What Is This Legislation About?
The Securities and Futures (Trading Venues for Derivatives Contracts in the European Union) Regulations 2019 (“EU Trading Venues Regulations”) are a targeted Singapore regulatory instrument designed to facilitate cross-border recognition and market access between Singapore and the European Union (EU) for derivatives trading venues.
In plain terms, the Regulations implement an “arrangement” between MAS (the Singapore regulator) and the European Commission. The arrangement is based on a comparability assessment: MAS recognises that EU rules governing trading venues for derivatives contracts are comparable to Singapore’s requirements for organised markets, and the European Commission recognises the reverse comparability for Singapore’s organised market framework.
The Regulations therefore do not create a general “open door” for all foreign trading venues. Instead, they provide (i) a specific exemption from Singapore’s approval requirement for certain EU trading venues, and (ii) a mechanism to prescribe particular EU-regulated facilities as venues through which a “specified person” may execute specified derivatives contracts for the purposes of section 129J(1) of the Securities and Futures Act (“SFA”).
What Are the Key Provisions?
1. Section 2 (Purpose): comparability and targeted exemptions
Section 2 sets out the legislative purpose in two linked parts.
First, it gives effect to the arrangement between MAS and the European Commission. Under that arrangement, the European Commission recognises that Singapore’s requirements for operators of organised markets are comparable to EU requirements under EU legislative instruments—most notably Directive 2014/65/EU (MiFID II), and EU Regulations 600/2014 (MiFIR) and 596/2014 (Market Abuse Regulation).
Second, MAS recognises that EU requirements for operators of trading venues for derivatives contracts under the EU rules are comparable to Singapore’s requirements for operators of organised markets. This comparability is the regulatory foundation for the exemptions and “prescribed facilities” mechanism that follow.
2. Section 3 (Exemption from section 7(1) of the SFA): no approval requirement, subject to a retail investor restriction
Section 3 is the core operational provision. It provides that, despite section 7(1) of the SFA, a person may establish or operate an organised market that is a facility set out in the Schedule—or hold itself out as operating such an organised market—without complying with section 7(1).
In practice, section 7(1) of the SFA generally requires approval for persons operating organised markets (or holding themselves out as doing so). Section 3 creates a carve-out for certain EU trading venues/facilities listed in the Schedule, but only if a specific condition is met.
The condition: the operator must ensure that no offer or invitation to exchange, sell or purchase any derivatives contract, securities, or units in a collective investment scheme is made on the organised market by or to a retail investor in Singapore.
This is a significant limitation. It means that the exemption is not merely about regulatory equivalence; it is also about protecting retail investors in Singapore from being solicited through the exempted foreign venue.
Deemed satisfaction: Section 3(3) provides that the condition is deemed satisfied if the organised market’s business rules or listing rules do not allow offers or invitations to be made on the organised market by or to a retail investor in Singapore.
This “rules-based” approach is important for compliance. It allows operators to demonstrate compliance through governance and rule design, rather than relying solely on ad hoc monitoring of every communication.
Definition of “retail investor”: Section 3(4) defines “retail investor” as a person other than an accredited investor, an expert investor or an institutional investor. This aligns with Singapore’s investor classification framework under the SFA regime and ensures that the restriction is calibrated to Singapore’s regulatory categories.
3. Section 4 (Prescribed facilities for section 129J(1)(a) of the SFA): execution of specified derivatives contracts
Section 4 links the Regulations to section 129J(1)(a) of the SFA. It provides that the facilities set out in the Schedule are prescribed as facilities on or through which a “specified person” may execute a “specified derivatives contract” for the purposes of section 129J(1)(a).
While the extract does not reproduce the text of section 129J, the structure indicates that section 129J governs a particular category of permitted execution arrangements—likely involving cross-border trading, execution venues, or regulatory permissions for certain market participants.
Accordingly, Section 4 performs a “designation” function: it tells the market (and regulated persons) which EU facilities count as acceptable execution venues for the relevant statutory purpose.
4. The Schedule (Facilities): the list that triggers the exemption and prescription
Both Section 3 and Section 4 depend on the Schedule. The Schedule lists the “Facilities” that are (i) facilities set out for the exemption from section 7(1), and (ii) prescribed facilities for section 129J(1)(a).
From a practitioner’s perspective, the Schedule is therefore not ancillary—it is determinative. Whether a given EU trading venue benefits from the exemption or is usable for the section 129J execution permission will turn on whether it appears in the Schedule.
How Is This Legislation Structured?
The Regulations are structured in a short, functional format:
- Section 1 (Citation and commencement): confirms the name of the Regulations and their commencement date (2 April 2019).
- Section 2 (Purpose of Regulations): explains the legislative intent—implementation of the MAS–European Commission arrangement and the comparability rationale.
- Section 3 (Exemption from section 7(1) of Act): provides the exemption for specified EU facilities, subject to the retail investor restriction and a deemed compliance mechanism through business/listing rules.
- Section 4 (Prescribed facilities for section 129J(1)(a)): designates the Schedule facilities as prescribed execution venues for the relevant statutory purpose.
- The Schedule (Facilities): lists the specific facilities that trigger both the exemption and the prescription.
This structure reflects the Regulations’ narrow scope: they are not a comprehensive trading venue code. Instead, they operate as a bridge between Singapore’s organised market approval framework and EU trading venue regulation, with a protective retail investor constraint.
Who Does This Legislation Apply To?
Operators of organised markets / trading venues are the primary direct beneficiaries. A person that establishes or operates an organised market that is a facility listed in the Schedule may rely on the exemption from section 7(1) of the SFA, provided the retail investor restriction is satisfied.
“Specified persons” and execution of “specified derivatives contracts” are the relevant parties for Section 4. The Regulations prescribe which EU facilities may be used for execution under section 129J(1)(a). In practice, this will matter to market participants that are authorised or permitted under the SFA framework to execute derivatives through particular venues, including cross-border venues.
Although the extract does not define “specified person” and “specified derivatives contract,” the statutory cross-reference indicates that applicability is conditional on meeting the definitions and permissions in the SFA itself. The Regulations therefore function as a venue list and compliance gatekeeping instrument rather than a standalone permission regime.
Why Is This Legislation Important?
For practitioners, the Regulations are important because they enable a controlled form of regulatory interoperability. Without such instruments, foreign derivatives trading venues would typically face Singapore approval requirements to operate or hold themselves out as organised markets. The exemption in Section 3 reduces duplicative regulatory burdens for EU venues that are already regulated under EU rules deemed comparable by MAS.
However, the exemption is not unconditional. The retail investor restriction is a key policy choice. By prohibiting offers or invitations to exchange, sell or purchase derivatives contracts, securities, or collective investment scheme units by or to retail investors in Singapore, the Regulations preserve Singapore’s investor protection objectives while still allowing institutional or professional participation.
From an enforcement and compliance standpoint, the deemed satisfaction mechanism in Section 3(3) is particularly practical. Operators can structure their business rules and listing rules to ensure that retail investors in Singapore are not targeted or permitted to participate through the venue. This shifts compliance from a purely operational monitoring exercise to a governance-and-rules compliance exercise—often easier to evidence to regulators and auditors.
Finally, Section 4’s prescription of facilities for section 129J(1)(a) is crucial for transaction structuring. If a regulated participant needs to execute derivatives through an EU venue for a permitted purpose, the Schedule determines whether that venue qualifies. In cross-border derivatives execution, venue eligibility can affect legal permissibility, reporting obligations, and risk management frameworks.
Related Legislation
- Securities and Futures Act (Cap. 289) (including sections 7(1), 129J(1)(a), 129N(1), and 44(1) as referenced in the enacting formula)
- Futures Act (listed in the provided metadata as related legislation)
- EU legislative instruments referenced in the purpose clause: Directive 2014/65/EU (MiFID II); Regulation (EU) No 600/2014 (MiFIR); Regulation (EU) No 596/2014 (Market Abuse Regulation)
Source Documents
This article provides an overview of the Securities and Futures (Trading Venues for Derivatives Contracts in the European Union) Regulations 2019 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.