Singapore legislation
Regulation 47B
of Securities and Futures (Licensing and Conduct of Business) Regulations
Regulation 47B
Dealing in securities as principal
Subregulation 1
Subject to paragraph (3), the holder of a capital markets services licence to deal in capital markets products shall not, as principal, enter into any transaction of sale or purchase of any specified product with any customer who is not the holder of a capital markets services licence to deal in capital markets products unless the holder first informs the customer that the holder is acting in the transaction as principal and not as agent.
Subregulation 2
The holder of a capital markets services licence to deal in capital markets products which enters into a transaction of sale or purchase of specified products, as principal, with a customer who is not the holder of a capital markets services licence to deal in capital markets products shall state in the contract note that the holder is acting in the transaction as principal and not as agent.
Subregulation 3
Paragraph (1) shall not apply to a transaction of sale or purchase of an odd lot of specified products that is entered into by the holder of a capital markets services licence to deal in capital markets products which is a member of an approved exchange or recognised market operator and specialises in transactions relating to odd lots of specified products.
Subregulation 4
Paragraphs (1) and (2) shall not apply to a market-maker when dealing in specified products in such capacity.
Subregulation 5
Where the holder of a capital markets services licence to deal in capital markets products fails to comply with paragraph (1) or (2) in respect of a contract for the sale of specified products by the holder, the purchaser of those specified products may, if he has not disposed of them, rescind the contract by a notice of rescission given in writing to the holder not later than 30 days after the receipt of the contract note.
Subregulation 6
Where the holder of a capital markets services licence to deal in capital markets products fails to comply with paragraph (1) or (2) in respect of a contract for the purchase of specified products by the holder, the vendor of those specified products may, in like manner, rescind the contract.
Subregulation 7
Nothing in paragraph (5) or (6) shall affect any right that a person has apart from those paragraphs.
Subregulation 8
Any person who contravenes any of the provisions of this regulation shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 12 months or to both.
Subregulation 9
For the purposes of this regulation —
a reference to the holder of a capital markets services licence to deal in capital markets products entering into a transaction of sale or purchase of specified products as principal includes a reference to the holder entering into such a transaction on behalf of —
a person associated with or connected to the holder;
a corporation in which the holder has a controlling interest; or
a corporation in which the holder’s interest and the interests of the directors of the holder together constitute a controlling interest;
a reference to specified products is a reference to specified products permitted to be traded on an organised market of —
an approved exchange;
an overseas exchange; or
a recognised market operator; and
a reference to a market-maker is a reference to —
the holder of a capital markets services licence which —
deals in capital markets products that are specified products for its own account;
regularly publishes bona fide competitive bids and offers quotations in respect of those specified products;
is ready, willing and able to enter into transactions at such quoted prices with other persons in respect of those specified products; and
is recognised as a market-maker by an approved exchange, an overseas exchange or the Authority; or
a designated market-maker referred to in paragraph 2(1)(i) of the Second Schedule.