In force2020 Revised Edition

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Securities and Futures Act 2001 · 2020 Revised Edition · Schedules

Schedule 2 · Regulated activities

SECOND SCHEDULESections 2(1) and 340(1) and (4)Regulated activitiesPart 1TYPES OF REGULATED ACTIVITIESThe following are regulated activities for the purposes of this Act:

(a)

dealing in capital markets products;

(b)

advising on corporate finance;

(c)

fund management;

(d)

real estate investment trust management;

(e)

product financing;

(f)

providing credit rating services;

(g)

providing custodial services.Part 2InterpretationIn this Schedule —“agreement” includes arrangement;“advising on corporate finance” means giving advice —

(a)

to any person (whether as principal or agent, or as trustee of a trust) concerning compliance with or in respect of laws or regulatory requirements (including the listing rules of an approved exchange) relating to the raising of funds by any entity, trustee of a trust on behalf of the trust or responsible person of a collective investment scheme on behalf of the collective investment scheme;

(b)

to a person making an offer —

(i)

to subscribe for or purchase specified products; or

(ii)

to sell or otherwise dispose of specified products,concerning that offer;

(c)

concerning the arrangement, reconstruction or take‑over of a corporation or any of its assets or liabilities; or

(d)

concerning the take‑over of a business trust or any of its assets or liabilities held by the trustee‑manager on behalf of the business trust;“credit rating” means an opinion expressed using an established and defined ranking system of rating categories, primarily regarding the creditworthiness of a rating target;“dealing in capital markets products” means (whether as principal or agent) making or offering to make with any person, or inducing or attempting to induce any person to enter into or to offer to enter into any agreement for or with a view to acquiring, disposing of, entering into, effecting, arranging, subscribing for, or underwriting any capital markets products;“financial institution” means —

(a)

any bank licensed under the Banking Act 1970;

(b)

any merchant bank licensed under the Banking Act 1970; or

(c)

any finance company licensed under the Finance Companies Act 1967;“fund management” means managing the property of, or operating, a collective investment scheme, or undertaking on behalf of a customer (whether on a discretionary authority granted by the customer or otherwise) —

(a)

the management of a portfolio of capital markets products; or

(b)

the entry into spot foreign exchange contracts for the purpose of managing the customer’s funds,but does not include real estate investment trust management;“leveraged foreign exchange trading” means entering into a spot foreign exchange contract where one counterparty provides to the other counterparty or the counterparty’s agent money, securities, property or other collateral which represents only a part of the value of the spot foreign exchange contract;“offer” or “offering” includes invitation to treat;“product financing” means providing any credit facility, advance or loan to facilitate (directly or indirectly) —

(a)

the subscription of specified products listed or to be listed on an organised market;

(b)

the purchase of specified products listed or to be listed on an organised market;

(c)

the purchase of such specified products as the Authority may prescribe; or

(d)

where applicable, the continued holding of specified products mentioned in paragraph (a), (b) or (c),whether or not the specified products are pledged as security for the credit facility, advance or loan, but does not include the provision of —

(e)

any credit facility, advance or loan that forms part of an arrangement to underwrite or sub‑underwrite specified products;

(f)

any credit facility, advance or loan to —

(i)

a holder of a capital markets services licence to deal in capital markets products in respect of specified products;

(ii)

a holder of capital markets services licence for product financing; or

(iii)

a financial institution,for the purposes of facilitating the acquisition or holding of specified products;

(g)

any credit facility, advance or loan by a company to its directors or employees to facilitate the acquisition or holding of its own specified products;

(h)

any credit facility, advance or loan by a member of a group of companies to another member of the group to facilitate the acquisition or holding of specified products by that other member; or

(i)

any credit facility, advance or loan by an individual to a company in which he or she holds 10% or more of its issued share capital to facilitate the acquisition or holding of specified products;“providing credit rating services” means preparing, whether wholly or partly in Singapore, credit ratings in relation to activities in the securities and futures industry for —

(a)

dissemination, whether in Singapore or elsewhere, or with a reasonable expectation that they will be so disseminated; or

(b)

distribution by subscription, whether in Singapore or elsewhere, or with a reasonable expectation that they will be so distributed,but does not include —

(c)

preparing a private credit rating pursuant to an individual order which is intended to be provided exclusively to the person who placed the order and not intended for public disclosure or distribution by subscription; or

(d)

preparing credit scores, credit scoring systems or similar assessments related to obligations arising from consumer, commercial or industrial relationships;“providing custodial services” means, in relation to specified products, providing or agreeing to provide any service where the person providing the service has, under an arrangement with another person (the customer), possession or control of the specified products of the customer and carries out one or more of the following functions for the customer:

(a)

settlement of transactions relating to the specified products;

(b)

collecting or distributing dividends or other pecuniary benefits derived from ownership or possession of the specified products;

(c)

paying tax or other costs associated with the specified products;

(d)

exercising rights, including without limitation voting rights, attached to or derived from the specified products;

(e)

any other function necessary or incidental to the safeguarding or administration of the specified products,but does not include —

(f)

the activities of a corporation that is a Depository as defined in section 81SF;

(g)

the provision of services to a related corporation or connected person, so long as none of the specified products in respect of which such services are provided is —

(i)

held on trust for another person by the related corporation or connected person;

(ii)

held as a result of any custodial services provided by the related corporation or connected person to another person; or

(iii)

beneficially owned by any person other than the related corporation or connected person;

(h)

the provision of services by a nominee corporation that are solely incidental to the business of the nominee corporation; and

(i)

any other conduct the Authority may, by order, prescribe;“rating category” means a rating symbol, such as a letter or numerical symbol which might be accompanied by appending identifying characters, used in a credit rating to provide a relative measure of risk to distinguish the different risk characteristics of the types of rating targets;“rating target” means the subject of a credit rating which may be —

(a)

a person other than an individual;

(b)

the government of a sovereign country, including the Government of Singapore; or

(c)

capital markets products;“real estate investment trust management” means managing the property of, or operating, a real estate investment trust;“spot foreign exchange contract” means a spot contract of which the underlying thing is a currency.[2/2009; 35/2014; 4/2017;1/2020; S 376/2008; S 20/2012]

Terms defined in this Act

advising on corporate finance
Defined · s 2
“advising on corporate finance” has the meaning given in the Second Schedule;
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approved exchange
Defined · s 2
“approved exchange” means a corporation that is approved by the Authority under section 9(1)(a) as an approved exchange;
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Authority
Defined · s 2
“Authority” means the Monetary Authority of Singapore established under the Monetary Authority of Singapore Act 1970;
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business
Defined · s 46AAA
“business” includes affairs and property;
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business trust
Defined · s 2
“business trust” has the meaning given by section 2 of the Business Trusts Act 2004;
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capital markets products
Defined · s 2
“capital markets products” means any securities, units in a collective investment scheme, derivatives contracts, spot foreign exchange contracts for the purposes of leveraged foreign exchange trading, and such other products as the Authority may prescribe as capital markets products;
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capital markets services licence
Defined · s 2
“capital markets services licence” means a licence that is granted by the Authority under section 86 to a person to carry on a business in any regulated activity;
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collective investment scheme
Defined · s 2
“collective investment scheme” means —(a)an arrangement in respect of any property —(i)under which the participants do not have day‑to‑day control over the management of the property, whether or not the participants have the right to be consulted or to give directions in respect of such management;(ii)under which either or both of the following characteristics are present:(A)the property is managed as a whole by or on behalf of a manager;(B)the contributions of the participants, and the profits or income out of which payments are to be made to the participants, are pooled; and(iii)under which either or both of the following characteristics are present:(A)the effect of the arrangement is to enable the participants (whether by acquiring any right, interest, title or benefit in the property or any part of the property or otherwise) —(AA)to participate in or receive profits, income, or other payments or returns arising from the acquisition, holding, management, disposal, exercise, redemption or expiry of, any right, interest, title or benefit in the property or any part of the property; or(AB)to receive sums paid out of such profits, income, or other payments or returns;(B)the purpose, purported purpose or purported effect of the arrangement is to enable the participants (whether by acquiring any right, interest, title or benefit in the property or any part of the property or otherwise) —(BA)to participate in or receive profits, income, or other payments or returns arising from the acquisition, holding, management, disposal, exercise, redemption or expiry of, any right, interest, title or benefit in the property or any part of the property; or(BB)to receive sums paid out of such profits, income, or other payments or returns,whether or not —(BC)the arrangement provides for the participants to receive any benefit other than those set out in sub‑paragraph (BA) or (BB) in the event that the purpose, purported purpose or purported effect is not realised; or(BD)the purpose, purported purpose or purported effect is realised; or(b)an arrangement which is an arrangement, or is of a class or description of arrangements, specified by the Authority as a collective investment scheme by notice in the Gazette,but does not include —(c)an arrangement operated by a person otherwise than by way of business;(d)an arrangement under which each of the participants carries on a business other than investment business and enters into the arrangement solely incidental to that other business;(e)an arrangement under which each of the participants is a related corporation of the manager;(f)an arrangement made by or on behalf of an entity solely for the benefit of persons, each of whom is —(i)a bona fide director or equivalent person, a former director or equivalent person, a consultant, an adviser, an employee or a former employee of that entity or, where that entity is a corporation, a related corporation of that entity; or(ii)a spouse, widow or widower, or a child, adopted child or stepchild below 18 years of age, of such director or equivalent person, former director or equivalent person, employee or former employee;(g)an arrangement made by or on behalf of 2 or more entities solely for the benefit of persons, each of whom is —(i)a bona fide director or equivalent person, a former director or equivalent person, a consultant, an adviser, an employee or a former employee of any of those entities or, where any of those entities is a corporation, a related corporation of the entity which is a corporation; or(ii)a spouse, widow or widower, or a child, adopted child or stepchild below 18 years of age, of such director or equivalent person, former director or equivalent person, employee or former employee;(h)a franchise;(i)an arrangement under which money received by an advocate and solicitor from his or her client, whether as a stakeholder or otherwise, acting in his or her professional capacity in the ordinary course of his or her practice, or under which money is received by a statutory body as a stakeholder in the carrying out of its statutory functions;(j)an arrangement made by any co‑operative society registered under the Co‑operative Societies Act 1979 in accordance with the objects thereof solely for the benefit of its members;(k)an arrangement made for the purposes of any chit fund permitted to operate under the Chit Funds Act 1971;(l)an arrangement arising out of a life policy within the meaning of the Insurance Act 1966;(m)a closed‑end fund constituted either as an entity, a sub‑fund or a trust;(n)an arrangement under which the whole amount of each participant’s contribution is a deposit as defined in section 4B of the Banking Act 1970;(o)an arrangement of which —(i)the predominant purpose is to enable the participants to share in the use or enjoyment of the property or to make its use or enjoyment available gratuitously to others; and(ii)the property does not consist of any of the following:(A)any currency of any country or territory;(B)any capital markets products;(C)any policy as defined in the First Schedule to the Insurance Act 1966;(D)any deposit as defined in section 4B of the Banking Act 1970;(E)any credit facilities as defined in section 2(1) of the Banking Act 1970;(p)an arrangement which is an arrangement, or is of a class or description of arrangements, specified by the Authority as not constituting a collective investment scheme by notice in the Gazette;
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company
Defined · s 2
“company” has the meaning given by section 4(1) of the Companies Act 1967;
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connected person
Defined · s 2
“connected person”, in relation to —(a)an individual, means —(i)the individual’s spouse, son, adopted son, stepson, daughter, adopted daughter, stepdaughter, father, stepfather, mother, stepmother, brother, stepbrother, sister or stepsister; and(ii)a firm, a limited liability partnership or a corporation in which the individual or any of the persons mentioned in sub‑paragraph (i) has control of not less than 20% of the voting power in the firm, limited liability partnership or corporation, whether such control is exercised individually or jointly; or(b)a firm, a limited liability partnership or a corporation, means another firm, limited liability partnership or corporation in which the firstmentioned firm, limited liability partnership or corporation has control of not less than 20% of the voting power in that other firm, limited liability partnership or corporation,and a reference in this Act to a person connected to another person is to be construed accordingly;
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corporation
Defined · s 2
“corporation” has the meaning given by section 4(1) of the Companies Act 1967;
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customer
Defined · s 2
“customer” means —(a)in relation to a holder of a capital markets services licence —(i)for the purposes of Parts 4, 6, 7 and 15, a person on whose behalf the holder carries on or will carry on any regulated activity; or(ii)for the purposes of Part 5 —(A)a person on whose behalf the holder carries on or will carry on any regulated activity; or(B)any other person with whom the holder, as principal, enters or will enter into transactions for the sale or purchase of capital markets products,but does not include such person or class of persons as may be prescribed for the purposes of this sub‑paragraph; or(b)for the purposes of Part 3 and the definition of “user”, a person on whose behalf a member of an approved exchange, an approved clearing house, a recognised clearing house or a recognised market operator (as the case may be) carries on any activity regulated under this Act, but does not include —(i)the member, with respect to dealings for the member’s own account;(ii)any officer, director, employee or representative of the member; or(iii)a related corporation of the member, with respect to accepted instructions to deal for an account belonging to, and maintained wholly for the benefit of, that related corporation;
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dealing in capital markets products
Defined · s 2
“dealing in capital markets products” has the meaning given in the Second Schedule;
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entity
Defined · s 2
“entity” includes a corporation, an unincorporated association, a partnership and the government of any state, but does not include a trust;
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fund management
Defined · s 2
“fund management” has the meaning given in the Second Schedule;
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leveraged foreign exchange trading
Defined · s 2
“leveraged foreign exchange trading” has the meaning given in the Second Schedule;
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manager
Defined · s 2
“manager”, in relation to a collective investment scheme, means a person, by whatever name called, who is responsible for managing the property of, or operating, the collective investment scheme;
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member
Defined · s 2
“member”, in relation to an approved exchange, a recognised market operator, an approved clearing house or a recognised clearing house, means a person who holds membership of any class or description in the approved exchange, recognised market operator, approved clearing house or recognised clearing house, whether or not the person holds any share in the share capital of the approved exchange, recognised market operator, approved clearing house or recognised clearing house, as the case may be;
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organised market
Defined · s 2
“organised market” has the meaning given in the First Schedule;
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principal
Defined · s 2
“principal”, in relation to a representative, means a person whom the representative is in the direct employment of, is acting for or is acting by arrangement with, and on behalf of whom the representative carries or will carry out any regulated activity;
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product financing
Defined · s 2
“product financing” has the meaning given in the Second Schedule;
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property
Defined · s 46AAH
“property” includes property, right and power of every description;
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providing credit rating services
Defined · s 2
“providing credit rating services” has the meaning given in the Second Schedule;
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providing custodial services
Defined · s 2
“providing custodial services” has the meaning given in the Second Schedule;
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real estate investment trust
Defined · s 2
“real estate investment trust”, except in Division 3 of Part 7, means a collective investment scheme —(a)that is authorised under section 286 or recognised under section 287;(b)that is a trust;(c)that invests primarily in real estate and real estate‑related assets specified by the Authority in the Code on Collective Investment Schemes; and(d)all or any units of which are listed for quotation on an approved exchange;
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real estate investment trust management
Defined · s 2
“real estate investment trust management” has the meaning given in the Second Schedule;
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related corporation
Defined · s 2
“related corporation” has the meaning given by section 4(1) of the Companies Act 1967;
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responsible person
Defined · s 2
“responsible person”, in relation to a collective investment scheme, means —(a)in the case of a scheme that is constituted as a VCC or a sub‑fund — the VCC;(b)in the case of a scheme that is constituted as a corporation other than a VCC — the corporation; or(c)in the case of any other scheme — the manager for the scheme;
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securities
Defined · s 2
“securities” means —(a)shares, units in a business trust or any instrument conferring or representing a legal or beneficial ownership interest in a corporation, partnership or limited liability partnership;(b)debentures; or(c)any other product or class of products as may be prescribed,but does not include —(d)any unit of a collective investment scheme;(e)any bill of exchange;(f)any certificate of deposit issued by a bank or finance company, whether situated in Singapore or elsewhere; or(g)such other product or class of products as may be prescribed;
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settlement
Defined · s 48
“settlement”, in relation to a market contract, includes partial settlement;
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share
Defined · s 2
“share” has the meaning given by section 4(1) of the Companies Act 1967;
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specified products
Defined · s 2
“specified products” means securities, specified securities‑based derivatives contracts or units in a collective investment scheme;
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spot contract
Defined · s 2
“spot contract” means a contract or an arrangement for the sale or purchase of any underlying thing at the spot price, where it is intended for a party to the contract or arrangement to take delivery of the underlying thing immediately or within a period which must not be longer than the period determined by the market convention for delivery of the underlying thing;
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spot foreign exchange contract
Defined · s 2
“spot foreign exchange contract” has the meaning given in the Second Schedule;
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underlying thing
Defined · s 2
“underlying thing” means —(a)in relation to a derivatives contract or a spot contract —(i)a unit in a collective investment scheme;(ii)a commodity;(iii)a financial instrument;(iv)the credit of any person; or(v)an arrangement, event, index, intangible property, tangible property or transaction that is, or that belongs to a class of arrangements, events, indices, intangible properties, tangible properties or transactions that is, prescribed by regulations made under section 341 to be an underlying thing in relation to a derivatives contract or a spot contract,but does not include any arrangement, event, index, intangible property, tangible property or transaction that is, or that belongs to a class of arrangements, events, indices, intangible properties, tangible properties or transactions that is, prescribed by regulations made under section 341 not to be an underlying thing in relation to a derivatives contract or a spot contract; and(b)in relation to a financial benchmark —(i)an investment product as defined in section 2(1) of the Financial Advisers Act 2001;(ii)a commodity;(iii)a financial instrument;(iv)any intangible property or class of intangible properties; or(v)any arrangement, event or transaction that is, or that belongs to a class of arrangements, events or transactions that is, prescribed by regulations made under section 341 to be an underlying thing in relation to a financial benchmark,but does not include any arrangement, event, intangible property or transaction that is, or that belongs to a class of arrangements, events, intangible properties or transactions that is, prescribed by regulations made under section 341 not to be an underlying thing in relation to a financial benchmark;
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Report

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