Statute Details
- Title: Securities and Futures (Trading Venues for Derivatives Contracts in the United Kingdom) Regulations 2020
- Act Code: SFA2001-S1116-2020
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Chapter 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Enacting Formula (powers): Sections 44(1) and 129N(1) of the Securities and Futures Act
- Citation and commencement: Comes into operation on 2 January 2021
- 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 Securities and Futures Act
- Schedule: “Facilities” (trading venues for derivatives contracts in the United Kingdom)
- 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”) are subsidiary legislation made under the Securities and Futures Act (Chapter 289) (“SFA”). In plain terms, the Regulations create a Singapore regulatory pathway for certain UK-based trading venues for derivatives contracts to be used in Singapore without triggering the full Singapore licensing/approval requirements that would otherwise apply to operators of organised markets.
The Regulations are anchored in an “arrangement” between the Monetary Authority of Singapore (MAS) and His Majesty’s Treasury (UK). The arrangement is premised on regulatory comparability: MAS recognises that the UK regulatory requirements applicable to trading venues for derivatives contracts are comparable to the requirements imposed in Singapore on operators of organised markets.
Practically, the Regulations do two main things. First, they provide an exemption from the SFA requirement that an operator of an organised market must be an approved exchange or a recognised market operator (under section 7(1) of the SFA), but only if a key retail investor restriction is satisfied. Second, they prescribe certain UK facilities as venues through which a specified person may execute specified derivatives contracts for the purposes of section 129J(1)(a) of the SFA.
What Are the Key Provisions?
1. Purpose and regulatory basis (Section 2)
Section 2 sets out the legislative intent and the mechanism by which the exemption and facility prescription operate. MAS is required to “give effect” to an arrangement with His Majesty’s Treasury. Under this arrangement, MAS recognises two comparability propositions:
- UK requirements on persons who operate trading venues for derivatives contracts are comparable to Singapore requirements on persons who operate organised markets; and
- the UK requirements are identified by reference to specific UK legal instruments and regulatory frameworks.
The “UK Rules” are defined broadly and include: (i) UK law implementing Directive 2014/65/EU (MiFID II) prior to 11 p.m. on 31 December 2020; (ii) EU-derived UK-retained regulations (including Regulation (EU) No. 600/2014 and Regulation (EU) No. 596/2014 as they apply in the UK under the European Union (Withdrawal) Act 2018); (iii) legally binding technical standards made under those instruments; and (iv) relevant rules imposed by the UK Financial Conduct Authority (FCA) under the FCA Handbook.
2. Exemption from section 7(1) of the SFA (Section 3)
Section 3 is the core operative 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).
However, this exemption is conditional. The condition in section 3(2) is a retail investor prohibition: 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.
Section 3(3) provides a helpful compliance mechanism. The retail investor 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 retail investors in Singapore. This deeming provision is important for practitioners because it shifts the compliance focus from proving actual conduct (offers made) to ensuring that the venue’s rules do not permit retail-facing dealing in Singapore.
Section 3(4) defines “retail investor” by exclusion: it is a person other than an accredited investor, expert investor, or institutional investor. This matters because the exemption is not a blanket prohibition on all non-institutional participants; it is specifically tied to the Singapore regulatory investor classification.
3. Prescribed facilities for section 129J(1)(a) (Section 4 and the Schedule)
Section 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 SFA.
Although the extract provided does not reproduce the Schedule’s list of facilities, the legal effect is clear: the Schedule identifies the particular UK trading venues that qualify as “prescribed facilities.” For practitioners, this means that the ability to execute specified derivatives contracts through those venues is not merely a matter of commercial choice; it is a statutory permission tied to the Schedule.
4. Interaction with the SFA’s organised market regime
While the Regulations are short, they operate within a broader Singapore framework. Section 3’s exemption is expressly “despite section 7(1)” of the SFA, signalling that without the exemption, an operator would need to be an approved exchange or recognised market operator to establish or operate an organised market (or hold itself out as doing so). The Regulations therefore function as a targeted carve-out for specified UK facilities, justified by regulatory comparability and constrained by the retail investor condition.
How Is This Legislation Structured?
The Regulations are structured in a conventional format for Singapore subsidiary legislation:
- Section 1 (Citation and commencement): sets the short title and commencement date (2 January 2021).
- Section 2 (Purpose of Regulations): explains the legislative objective and the regulatory comparability arrangement between MAS and His Majesty’s Treasury, including the definition of the “UK Rules.”
- Section 3 (Exemption from section 7(1) of Act): provides the exemption and the retail investor restriction, including the deeming rule based on business/listing rules.
- Section 4 (Prescribed facilities for section 129J(1)(a) of Act): designates the Schedule facilities as prescribed execution venues.
- THE SCHEDULE (Facilities): lists the specific UK trading venues/facilities that qualify for the exemption and/or prescription.
Who Does This Legislation Apply To?
The Regulations primarily apply to persons who establish or operate an organised market that is a facility set out in the Schedule—specifically, trading venues for derivatives contracts in the United Kingdom that are regulated under and in accordance with the UK Rules.
In addition, section 4 indicates that the prescribed facilities are relevant to “a specified person” executing “a specified derivatives contract” under section 129J(1)(a) of the SFA. While the extract does not define those terms, the structure implies that the SFA already contains a category of persons and contracts for which execution through prescribed facilities is permitted. Accordingly, the Regulations are best read together with the SFA provisions on cross-border execution and derivatives trading.
Finally, the retail investor restriction in section 3(2) effectively applies to the operator’s conduct and rules concerning offers or invitations made “by or to a retail investor in Singapore.” This is a compliance obligation that will matter to both UK venue operators and any Singapore participants or intermediaries that interact with them.
Why Is This Legislation Important?
For practitioners, the UK Trading Venues Regulations are significant because they provide a practical legal mechanism for cross-border derivatives market access. Without such regulations, UK trading venues might need to seek Singapore recognition/approval as organised market operators, which can be time-consuming and may require substantial regulatory engagement.
The Regulations also illustrate a common Singapore regulatory approach: equivalence by arrangement. MAS does not simply accept foreign regulation at face value; instead, it identifies the relevant UK legal and regulatory instruments (including retained EU law and FCA rules) and then grants a limited exemption based on comparability.
From an enforcement and risk perspective, the retail investor condition is the key safeguard. It ensures that even if a UK venue is exempt from Singapore’s organised market approval requirement, it cannot be used to facilitate retail-facing dealing in Singapore. The deeming provision based on business/listing rules is particularly important for compliance planning: operators can structure their rulebooks to prevent retail offers/invitations, thereby satisfying the condition without needing to monitor every transaction in real time.
Finally, the prescription of facilities under section 4 affects how Singapore-regulated entities can execute derivatives contracts. This can influence trade routing, execution venue selection, and documentation. In disputes or regulatory reviews, practitioners will likely focus on whether the relevant venue is indeed included in the Schedule and whether the retail investor restriction is properly implemented.
Related Legislation
- Securities and Futures Act (Chapter 289) (including sections 7(1), 129J(1)(a), 129N(1), and section 44(1) as the enabling provision)
- Futures Act
- Markets Act 2000
- UK regulatory framework referenced as “UK Rules” (Directive 2014/65/EU; Regulation (EU) No. 600/2014; Regulation (EU) No. 596/2014; FCA Handbook rules; and related technical standards)
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.