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)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Authorising Act: Securities and Futures Act (SFA) (Cap. 289)
- Legal Basis: Powers under sections 44(1) and 129N(1) of the SFA
- Commencement: 14 March 2019
- Regulations: Sections 1 to 4 and a Schedule (Facilities)
- Key Provisions:
- Section 2: Purpose of the Regulations
- Section 3: Exemption from section 7(1) of the SFA (subject to conditions)
- Section 4: Prescribed facilities for section 129J(1)(a) of the SFA
- Schedule: Lists the US trading facilities/venues that are treated as prescribed facilities
- Status / Versioning: Current version as at 27 March 2026 (with amendments noted in the legislation timeline)
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 subsidiary legislation made under the Securities and Futures Act (SFA). In practical terms, the Regulations create a Singapore regulatory “bridge” for certain derivatives trading venues located in the United States.
The Regulations implement an arrangement between MAS and the United States Commodity Futures Trading Commission (CFTC). The arrangement is designed to recognise regulatory comparability between (i) Singapore’s requirements for operators of organised markets and (ii) the United States’ requirements for trading venues for derivatives contracts under the US Commodity Exchange Act.
Most importantly, the Regulations provide targeted exemptions and prescriptions so that specified US-regulated trading venues can be used in Singapore for certain purposes without triggering the full Singapore licensing/approval regime that would otherwise apply to organised market operators. The Regulations also impose a key investor-protection limitation: the exempt organised market must not be used to solicit or offer derivatives (or related financial products) to retail investors in Singapore.
What Are the Key Provisions?
1. Purpose and regulatory intent (Section 2)
Section 2 sets out the legislative purpose in two layers. First, it gives effect to the MAS–CFTC arrangement. MAS recognises that US requirements applicable to persons who operate organised markets in Singapore are comparable to US requirements applicable to persons who operate trading venues for derivatives contracts under the US Commodity Exchange Act. Conversely, the US regulator recognises comparability of Singapore’s requirements.
Second, Section 2 identifies the specific mechanisms the Regulations will implement. These include: (a) exempting persons who establish or operate US trading venues, under and in accordance with the US Commodity Exchange Act, from Singapore’s requirement to be an approved exchange or recognised market operator (under section 7(1) of the SFA) before establishing or operating an organised market; and (b) prescribing US trading venues as “facilities” through which a specified person may execute specified derivatives contracts for the purposes of section 129J(1) of the SFA.
2. Exemption from the organised market approval requirement (Section 3)
Section 3 is the core operative provision. Under section 7(1) of the SFA, persons who establish or operate an organised market (or hold themselves out as operating one) generally must be an approved exchange or a recognised market operator. Section 3(1) provides an exemption: despite section 7(1), 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).
Condition: no offers/invitations to retail investors in Singapore (Section 3(2))
The exemption is not unconditional. Section 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 significant investor-protection and conduct-of-business restriction. It is not limited to derivatives alone; it extends to securities and collective investment scheme units as well. The practical compliance challenge for operators is to ensure that their market access, marketing, communications, and order-routing arrangements do not result in retail investors in Singapore being solicited or invited to trade.
Deemed satisfaction via business rules or listing rules (Section 3(3))
Section 3(3) provides a compliance “safe harbour” (or at least a deemed-mechanism): the condition in section 3(2) is deemed satisfied if the organised market’s business rules or listing rules do not allow offers or invitations to exchange, sell or purchase the relevant products to be made by or to a retail investor in Singapore.
For practitioners, this means the exemption can be supported by governance and rule design at the venue level. However, the wording is careful: it is the rules that must not allow such offers/invitations. Lawyers advising venue operators should therefore scrutinise whether the rules are sufficiently operationalised (e.g., whether there are enforcement mechanisms, membership/access controls, and compliance processes that ensure the rules are actually effective in practice).
Definition of “retail investor” (Section 3(4))
Section 3(4) defines “retail investor” as a person other than an accredited investor, an expert investor, or an institutional investor. This definition aligns with Singapore’s broader investor classification framework. The exemption therefore turns on whether the counterparty is within those categories. In cross-border trading arrangements, this typically requires robust investor classification and onboarding documentation.
3. Prescribed facilities for section 129J(1)(a) of the SFA (Section 4)
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 does not reproduce section 129J itself, the structure indicates that section 129J governs a particular regulatory pathway for executing derivatives contracts—likely involving specified persons (for example, certain financial institutions or intermediaries) and specified derivatives contracts. Section 4 therefore performs a “designation” function: it tells the market which US trading facilities can be used for that statutory purpose.
4. Schedule-driven scope
Both the exemption in section 3 and the prescription in section 4 depend on the Schedule. The Schedule lists the “Facilities”. In practice, the Schedule is where the legal effect becomes concrete: only the facilities named there qualify for the exemption and prescription. For legal work, the Schedule should be treated as a living compliance reference point—especially given the legislation’s amendment history.
How Is This Legislation Structured?
The Regulations are structured in a straightforward, practitioner-friendly format:
Section 1 sets out the citation and commencement date (14 March 2019).
Section 2 states the purpose of the Regulations, including the MAS–CFTC arrangement and the two main outcomes (exemption from section 7(1) and prescription of facilities for section 129J(1)(a)).
Section 3 provides the exemption from the organised market approval requirement, but only for facilities listed in the Schedule and only subject to the retail investor restriction (with deemed satisfaction through business/listing rules).
Section 4 prescribes the Schedule facilities as permitted execution facilities for the relevant derivatives execution pathway under section 129J(1)(a).
The Schedule is the key operational component. It lists the specific US trading facilities/venues that qualify. Any practitioner advising on whether a particular US venue can be used in Singapore should start by confirming whether that venue appears in the Schedule.
Who Does This Legislation Apply To?
The Regulations apply primarily to persons who establish or operate organised markets that are facilities set out in the Schedule—specifically, trading venues for derivatives contracts in the United States that are regulated under and in accordance with the US Commodity Exchange Act.
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 legislative design suggests that Singapore intermediaries or other regulated entities may rely on the prescribed facilities designation to execute particular derivatives transactions.
Finally, the retail investor restriction in section 3(2) affects conduct and market access. Even if a venue qualifies for the exemption, the operator must ensure that no offers or invitations are made by or to retail investors in Singapore. This means the Regulations have practical implications for compliance teams, membership arrangements, marketing practices, and investor onboarding processes.
Why Is This Legislation Important?
This Regulations matters because it enables cross-border derivatives market participation while maintaining Singapore’s regulatory and investor-protection boundaries. Without such an exemption and prescription, operators of US trading venues might need to meet Singapore’s approval/recognition requirements to operate an organised market or hold themselves out as doing so.
Regulatory comparability and market access
The Regulations operationalise regulatory comparability. By recognising that US requirements under the Commodity Exchange Act are comparable to Singapore’s requirements under the SFA, MAS reduces duplication and facilitates efficient market integration. This is particularly important for derivatives markets, where liquidity and execution quality depend on access to established trading venues.
Investor protection through the retail investor limitation
The exemption is conditioned on preventing retail investor solicitation or invitations in Singapore. This reflects a policy choice: while sophisticated or eligible investors may access derivatives markets through appropriate channels, retail investors should not be exposed to risks without the protections that Singapore’s organised market framework is designed to deliver.
Practical compliance implications
For practitioners, the deemed satisfaction mechanism (section 3(3)) is both helpful and potentially risky. It allows operators to rely on business/listing rules that prohibit offers/invitations to retail investors in Singapore. However, lawyers should advise clients to ensure that the rules are enforceable, operationally implemented, and consistent with actual trading and marketing practices. In cross-border contexts, compliance failures often arise not from the formal rules but from execution pathways, communications, or access controls that inadvertently permit retail participation.
Additionally, because the legal effect hinges on the Schedule, practitioners should treat the Schedule as a compliance checklist item. Any change to the listed facilities (including through amendments) may alter the scope of the exemption and the availability of prescribed execution facilities under section 129J.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular sections 7(1), 129J(1)(a), and 129N(1) (as the authorising provision for these Regulations)
- United States Commodity Exchange Act — the US statutory framework referenced for the regulatory comparability arrangement
- Futures Act — referenced in the provided metadata as related legislation
- Legislation Timeline / Amendments — amendments noted as S 833/2022 and S 889/2023 (as reflected in the legislation timeline)
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.