Statute Details
- Title: Securities and Futures (Trading Venues for Derivatives Contracts in the United Kingdom) Regulations 2020
- Act Code: SFA2001-S1116-2020
- Legislation Type: Subsidiary legislation (sl)
- Authorising Act: Securities and Futures Act (Chapter 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Legal Basis: Powers conferred by sections 44(1) and 129N(1) of the Securities and Futures Act
- Citation and Commencement: Comes into operation on 2 January 2021
- Key Provisions:
- Regulation 2: Purpose of the Regulations
- Regulation 3: Exemption from section 7(1) of the Securities and Futures Act
- Regulation 4: Prescribed facilities for purposes of section 129J(1)(a) of the Act
- Schedule: “Facilities” (UK trading venues for derivatives contracts regulated under the UK Rules)
- Current Version Status: Current version as at 27 Mar 2026
- Noted Amendment: Amended by S 207/2025 with effect from 31 Mar 2025
What Is This Legislation About?
The Securities and Futures (Trading Venues for Derivatives Contracts in the United Kingdom) Regulations 2020 (“UK Trading Venues Regulations”) is a Singapore subsidiary legislative instrument designed to facilitate regulatory equivalence and cross-border market access between Singapore and the United Kingdom for derivatives trading venues.
In plain language, the Regulations recognise that certain UK trading venues for derivatives contracts are regulated under UK legal and regulatory requirements that are “comparable” to Singapore’s requirements for organised markets. The Regulations then create a controlled pathway for those UK venues to operate in Singapore’s regulatory ecosystem without triggering certain Singapore licensing/approval requirements—provided that specific investor-protection conditions are met.
At the same time, the Regulations also “prescribe” particular trading facilities (as listed in the Schedule) for a specific Singapore statutory purpose relating to section 129J(1)(a) of the Securities and Futures Act. This matters for market participants and intermediaries that need to know which foreign facilities can be used to execute specified derivatives contracts for the relevant statutory framework.
What Are the Key Provisions?
Regulation 2 (Purpose): The core policy objective is implemented through an “arrangement” between MAS and His Majesty’s Treasury (UK). The Regulations specify that the UK Rules—comprising UK legislation, directly applicable EU-derived regulations as they apply in the UK, and legally binding technical standards, as well as rules imposed by the UK Financial Conduct Authority (FCA)—are considered comparable to Singapore’s requirements for operators of organised markets.
Regulation 2 is also explicit about the scope of the “UK Rules.” It includes (i) UK law in force prior to 11 p.m. on 31 December 2020 implementing Directive 2014/65/EU (MiFID II), (ii) Regulation (EU) No. 600/2014 (MiFIR) as it applies in the UK under the European Union (Withdrawal) Act 2018, (iii) Regulation (EU) No. 596/2014 (Market Abuse Regulation) as it applies in the UK, (iv) legally binding technical standards made under those instruments, and (v) relevant FCA rules under the FCA Handbook.
Regulation 2(b) (Practical effects): The Regulations do two main things. First, they provide an exemption from the requirement in section 7(1) of the Securities and Futures Act for certain persons operating UK derivatives trading venues. Second, they prescribe specific UK trading venues as “facilities” through which a specified person may execute specified derivatives contracts for the purposes of section 129J(1)(a) of the Act.
Regulation 3 (Exemption from section 7(1) of the Act): This is the most operationally significant provision. As a starting point, section 7(1) of the Securities and Futures Act generally requires persons who operate organised markets (or hold themselves out as doing so) to be an approved exchange or a recognised market operator before establishing or operating an organised market, or holding themselves out as operating one.
Regulation 3(1) creates an exemption: despite section 7(1), a person may establish or operate an organised market that is a facility listed in the Schedule, or hold itself out as operating such an organised market, without complying with section 7(1). However, this exemption is subject to a strict investor-protection condition in Regulation 3(2).
Regulation 3(2) (Retail investor restriction): The exemption applies only if the operator ensures 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 critical compliance boundary. It is not merely a prohibition on trading by retail investors; it is framed as a prohibition on making offers or invitations to exchange, sell or purchase. In practice, lawyers advising operators and their distribution partners should treat this as a marketing/distribution constraint that must be reflected in business rules, listing rules, website access, order routing arrangements, and any communications that could be characterised as an “offer” or “invitation.”
Regulation 3(3) (Deemed satisfaction via rules): The condition is deemed satisfied if the organised market’s business rules or listing rules do not allow any offer or invitation to be made on the organised market by or to a retail investor in Singapore. This creates a compliance mechanism: operators can structure their rulebooks so that retail access is contractually and procedurally blocked, thereby meeting the condition without needing to prove every instance of marketing activity.
Regulation 3(4) (Definition of “retail investor”): The Regulations define “retail investor” as a person other than an accredited investor, an expert investor, or an institutional investor. This definition is important because it determines who is excluded from the exemption’s prohibition. Practitioners should cross-check how those categories are defined and applied under the Securities and Futures Act and related regulations, as classification affects whether an investor is treated as “retail” for the purposes of the restriction.
Regulation 4 (Prescribed facilities for section 129J(1)(a)): Regulation 4 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) of the Act.
While the extract does not reproduce the definitions of “specified person” and “specified derivatives contract,” the structure indicates that section 129J is part of a broader statutory regime governing how certain derivatives transactions may be executed (including possibly for regulatory capital, risk management, or eligibility purposes). Regulation 4 therefore has a direct operational impact: it tells market participants which foreign facilities qualify for that statutory pathway.
How Is This Legislation Structured?
The Regulations are concise and organised around four main elements:
(1) Enacting formula and commencement: The instrument is made by MAS under the Securities and Futures Act and comes into operation on 2 January 2021.
(2) Regulation 1 (Citation and commencement): Sets the short title and effective date.
(3) Regulation 2 (Purpose of Regulations): Explains the regulatory equivalence arrangement with the UK and the twofold purpose: (i) exemption from section 7(1) and (ii) prescription of facilities for section 129J(1)(a).
(4) Regulation 3 and Regulation 4: Regulation 3 provides the exemption with conditions (notably the retail investor restriction). Regulation 4 prescribes the facilities in the Schedule for the section 129J execution framework.
(5) The Schedule (“Facilities”): The Schedule lists the specific UK trading venues/facilities that benefit from the exemption and/or are prescribed for execution purposes. Because the Schedule is not reproduced in the extract, practitioners should consult the current version to identify the exact facilities covered, particularly given the noted amendment in 2025.
Who Does This Legislation Apply To?
The Regulations primarily apply to persons who establish or operate organised markets that correspond to the facilities listed in the Schedule—specifically, UK trading venues for derivatives contracts regulated under and in accordance with the UK Rules. It also applies to persons who seek to rely on the prescribed facilities for executing specified derivatives contracts under section 129J(1)(a).
In addition, the retail investor restriction in Regulation 3(2) effectively binds the market operator and its distribution/market access arrangements. Even though the exemption is framed as a permission not to comply with section 7(1), the operator must ensure that offers or invitations to trade are not made by or to retail investors in Singapore. This means that counterparties, brokers, and any Singapore-facing marketing channels may need to be contractually aligned to ensure compliance with the “retail investor” limitation.
Why Is This Legislation Important?
This Regulations is important because it operationalises cross-border regulatory recognition. Without such subsidiary legislation, a UK derivatives trading venue that is an “organised market” in Singapore’s regulatory sense might otherwise need to obtain approval as an approved exchange or recognised market operator under section 7(1). By granting a targeted exemption, MAS reduces unnecessary duplication while still protecting Singapore investors through conditions.
From a practitioner’s perspective, the key legal significance lies in the combination of (i) regulatory comparability and (ii) a concrete investor-protection condition. The exemption is not unconditional; it is tied to preventing retail investor access. The deemed satisfaction mechanism (via business rules or listing rules) is particularly useful for compliance design: it allows operators to embed the restriction into their governance documents, which can then be relied upon to demonstrate compliance.
Finally, Regulation 4’s prescription of facilities for section 129J(1)(a) supports legal certainty for market participants executing derivatives. Where statutory regimes require transactions to be executed on or through “prescribed facilities,” the Schedule becomes a practical checklist. Lawyers advising on documentation, execution venues, eligibility, and regulatory reporting should therefore treat the Schedule as a living compliance reference—especially in light of amendments (such as the 2025 amendment noted in the legislation timeline).
Related Legislation
- Securities and Futures Act (Chapter 289) (including sections 7(1), 129J(1)(a), and 129N(1))
- Futures Act
- Markets Act 2000
- Financial Services and Markets Act 2000 (UK) (as referenced for the FCA’s establishment and rulemaking framework)
- Directive 2014/65/EU (MiFID II) (as implemented in UK law prior to 31 December 2020)
- Regulation (EU) No. 600/2014 (MiFIR) (as applied in the UK under the EU (Withdrawal) Act 2018)
- Regulation (EU) No. 596/2014 (Market Abuse Regulation) (as applied in the UK under the EU (Withdrawal) Act 2018)
- European Union (Withdrawal) Act 2018 (UK) (for the application of EU-derived regulations in the UK)
Source Documents
This article provides an overview of the Securities and Futures (Trading Venues for Derivatives Contracts in the United Kingdom) Regulations 2020 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.