Statute Details
- Title: Securities and Futures (Trading Venues for Derivatives Contracts in the United States of America) Regulations 2019
- Act Code: SFA2001-S133-2019
- Type: Subsidiary Legislation (sl)
- Authorising Act: Securities and Futures Act (Cap. 289)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Legal Basis: Sections 44(1) and 129N(1) of the Securities and Futures Act
- Commencement: 14 March 2019
- Regulations’ Status: Current version as at 27 March 2026
- Key Provisions: Regulation 2 (Purpose); Regulation 3 (Exemption from section 7(1)); Regulation 4 (Prescribed facilities); Schedule (Facilities)
- Amendments Noted in Timeline: Amended by S 833/2022; Amended by S 889/2023
What Is This Legislation About?
The Securities and Futures (Trading Venues for Derivatives Contracts in the United States of America) Regulations 2019 (“US Derivatives Trading Venues Regulations”) are Singapore subsidiary legislation made by MAS under the Securities and Futures Act (the “SFA”). In plain terms, the Regulations create a regulatory bridge between Singapore’s framework for organised markets and the United States regulatory regime for derivatives trading venues.
The Regulations implement an “arrangement” between MAS and the United States Commodity Futures Trading Commission (CFTC). The arrangement is designed to recognise regulatory comparability: Singapore’s requirements for operators of organised markets are treated as comparable to the United States requirements for trading venues for derivatives contracts, and vice versa. This mutual recognition supports cross-border market access while maintaining Singapore’s investor protection and market integrity objectives.
Practically, the Regulations do two main things. First, they provide an exemption from Singapore’s baseline 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 for certain US-regulated trading venues and subject to a key retail investor restriction. Second, they prescribe specific US trading 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?
Regulation 1 (Citation and commencement) is straightforward: it provides the short title and states that the Regulations come into operation on 14 March 2019.
Regulation 2 (Purpose of Regulations) sets out the legislative intent in detail. MAS explains that the purpose is to give effect to the MAS–CFTC arrangement. The arrangement includes two core recognition statements: (i) the CFTC recognises that Singapore’s requirements for operators of organised markets are comparable to US requirements for operators of derivatives trading venues under the US Commodity Exchange Act; and (ii) MAS recognises that US requirements are comparable to Singapore’s requirements under the SFA.
Regulation 2 then identifies the specific regulatory outcomes. In particular, it states that the Regulations (a) exempt persons who establish or operate US trading venues for derivatives contracts under and in accordance with the US Commodity Exchange Act from the requirement in section 7(1) of the SFA to be an approved exchange or recognised market operator before establishing or operating an organised market (or holding themselves out as operating one); and (b) prescribe US trading venues as “facilities” through which a specified person may execute specified derivatives contracts for the purposes of section 129J(1)(a) of the SFA.
Regulation 3 (Exemption from section 7(1) of Act) is the operational heart of the Regulations. 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). This is a significant concession: it removes the need for the US venue operator to obtain Singapore approval/recognition that would otherwise be required for organised market operation.
However, the exemption is conditional. Regulation 3(2) requires that the person ensures that no offer or invitation to exchange, sell or purchase any derivative 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 protective limitation aimed at preventing retail participation in cross-border trading venues that are not directly approved/recognised under Singapore’s organised market framework.
Regulation 3(3) provides a practical compliance mechanism: 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 shifts the compliance focus to the venue’s rulebook architecture—if the rules prohibit retail access, the exemption condition is treated as met.
Regulation 3(4) defines “retail investor” as a person other than an accredited investor, expert investor, or institutional investor. For practitioners, this definition is crucial because it determines the boundary between permitted professional/eligible participation and prohibited retail solicitation or access.
Regulation 4 (Prescribed facilities for purposes of section 129J(1)(a) of Act) complements the exemption. It states 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. In other words, the Schedule is not merely descriptive; it has legal effect by designating the relevant US trading venues as eligible execution facilities for the statutory pathway in section 129J.
The Schedule (Facilities) is referenced as the list of facilities. While the extract provided does not reproduce the facility names, the Schedule is where the legal “coverage” is determined. For counsel, the Schedule is typically the first place to check when advising on whether a particular US venue is within the exemption and/or within the prescribed execution facilities regime.
How Is This Legislation Structured?
The Regulations are structured in a compact, functional format typical of Singapore subsidiary legislation implementing cross-border regulatory arrangements. The document comprises:
(1) Enacting formula (MAS’s authority under the SFA);
(2) Regulations 1 to 4, covering citation/commencement, purpose, the exemption mechanism, and the prescription of facilities; and
(3) The Schedule, which lists the relevant trading facilities. The Schedule is central because Regulation 3’s exemption applies only to an organised market that is a facility set out in the Schedule, and Regulation 4’s prescription likewise depends on the Schedule.
Who Does This Legislation Apply To?
The Regulations apply primarily to persons who establish or operate trading venues for derivatives contracts in the United States of America under and in accordance with the US Commodity Exchange Act. These persons may be trading venue operators, exchange operators, or other entities that fall within the operational scope of “organised market” concepts under the SFA.
In addition, the Regulations operate in relation to specified persons and specified derivatives contracts under section 129J(1)(a) of the SFA. While the extract does not define “specified person” or “specified derivatives contract” (those definitions are typically found in the SFA or related subsidiary instruments), the Regulations make clear that the prescribed US facilities are eligible execution venues for those statutory purposes.
Finally, the retail investor restriction in Regulation 3(2) means that the exemption’s practical benefit depends on the venue’s conduct and rules regarding offers/invitations to retail investors in Singapore. Even where a venue is listed in the Schedule, the exemption can be undermined if the venue’s arrangements permit retail solicitation or access contrary to the condition.
Why Is This Legislation Important?
This legislation is important because it enables regulatory interoperability between Singapore and the United States for derivatives trading venues. Without such instruments, a US venue operator that wishes to operate an organised market in Singapore (or hold itself out as doing so) could face Singapore’s approval/recognition requirements under section 7(1) of the SFA. The exemption reduces friction and supports cross-border market development.
At the same time, the Regulations preserve a key investor protection safeguard: no offers or invitations to retail investors in Singapore. This is a targeted limitation rather than a blanket prohibition on all Singapore participation. By defining “retail investor” by reference to accredited/expert/institutional categories, the Regulations align with Singapore’s broader approach of calibrating regulatory intensity to investor sophistication and risk.
For practitioners, the Regulations also have compliance and advisory implications. Counsel advising a US venue operator should (i) confirm whether the venue is included in the Schedule; (ii) assess whether the operator’s business rules or listing rules effectively prevent offers/invitations to retail investors in Singapore; and (iii) ensure that marketing, onboarding, and execution arrangements do not create a de facto retail solicitation pathway that could be inconsistent with Regulation 3(2). For Singapore-side intermediaries or “specified persons,” counsel should verify that the relevant execution venue is “prescribed” under Regulation 4 for the intended derivatives execution activity under section 129J(1)(a).
Finally, the Regulations’ purpose clause underscores that the exemption is grounded in a formal recognition of comparability between regulatory regimes. That comparability premise can matter in enforcement and supervisory contexts: if regulatory standards diverge over time, MAS may revisit the arrangement or the scope of prescribed facilities through amendments.
Related Legislation
- Securities and Futures Act (Cap. 289) (including sections 7(1), 129J(1)(a), 129N(1), and section 44(1))
- United States Commodity Exchange Act (the US statutory framework referenced for comparability and for the operation of trading venues)
- Futures Act (noted in the provided metadata as related legislation)
- Legislation Timeline / Amendments (e.g., S 833/2022; S 889/2023) for current scope and any updates to the Regulations or Schedule
Source Documents
This article provides an overview of the Securities and Futures (Trading Venues for Derivatives Contracts in the United States of America) Regulations 2019 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.