According to the granting of a Capital Markets Services (CMS) license based on the SFA guidelines, the individual or organization would qualify if:
a. the business ownership form is a corporation
b. should have relevant and established track record of capital markets products for at least the past five years
c. must have a physical office in Singapore

Under the minimum PII quantum, the licensee and its representatives, employees, agents or contractors are insured in case of breaching professional duty, infidelity or dishonesty, loss of documents evidencing title of assets belonging to customers.

It was set out in Annex 1 on the Guidelines on Criteria for the Grant of a Capital Markets Services License Other than for Fund Management and Real Estate Investment Trust Management that S$1 million is the allocated BCR for a non-member.
For clearing member, trading member, introducing broker has an allocation of S$5 million, S$1 million, and S$500,000, respectively.

Under the guidelines on criteria for the granting of CMS license, the MAS may grant an applicant (who did not satisfy all the requirements et-out in paragraphs 3.1 to 3.20) a CMS license given that another license conditions will be imposed. The applicant will need to procure a banker’s guarantee, PII, or Letter of Undertaking at the time of application as per with the SFA section 88.

In the ammended guidelines of CMS license grant on October 8, 2018, Other Regulated Activities under SFA, the Base Capital Requirement for the regulated activities are as follows:
S$ 1 million for the dealing in capital markets products that are spot foreign exchange contracts for leveraged foreign exchange purposes with any customer who is an accredited investor, institutional investor, or expert investor while S$5 million for the customers who are not
the carrying out of product financing and providing custodial services are both S$1 million S$250,000 each for advising on corporate and providing credit rating service.

MAS requires REIT managers to obtain PII. According to guidelines, the amount of PII deductible of the applicant should not exceed 20% of its base capital. Under paragraph 2 in Annex 2, when an applicant carries out the regulated activities of fund management and advising on corporate finance and advising on corporate finance, the minimum PII coverage is cumulative. Also, MAS may consider alternative forms of PII provided that the applicant has assessed the PII without compromising the investors’ interests.

The criteria for CMS License under the Boutique Corporate Finance Advisor Scheme, a corporation should satisfy the following:
-either Singapore citizens or Singapore permanent residents are the majority shareholders
-at least three corporate finance professionals (which at least one substantial shareholder and two with at least 5-year direct and relevant experience in corporate finance advisory
-PII requirements with a minimum amount of S$2.5m advising on corporate finance, including BCF

Following the SFA per Guidelines on Criteria for the Grant of a Capital Markets Services, non-clearing member with non-retail clients (not a member of an approved clearing house) has S$1 million BCR. As for the non-clearing with retail clients has S$5 million BCR, the clearing member with S$5 million, and others (a corporation that does not carry any customer’s positions, margins,or accounts in over-the-counter derivatives contracts in its books).

As stated in paragraph seven on the guidelines criteria for grant of the additionally regulated activity of dealing in capital markets products for CMS licenses, a BCF can apply for an additional regulatory activity for dealing in capital markets products to conduct placement and underwriting concerning IPOs. Also, BCF should satisfy the financial and reporting requirements such as maintaining at least S$5 million as base capital and extending PII to cover the dealing in capital markets products and advising on corporate finance activities.

The introducing broker, which carries on the business only of soliciting or accepting orders for the purchase or sale of those capital markets products from any customer allocates with S$250,000 BCR, is indicated in the PII.

The removal of the REITs Notification Requirements as proposed by MAS is a compliance under section 305 of the SFA that explains the exemption of the REITs to notification requirements. The REITs are under the Authorization Regime of the MAS, this means they are not necessary required for notification requirements. Thus, relying on the mentioned exemptions in section 275 and 305 of the SFA, the REITs will no longer comply.

In recalibrating the REITs leverage limit, they will be allowed to take more on debt under the following conditions:
a. meet the minimum of ICR proposed by MAS
b. ability assessment in providing sufficient operating income to service interest payment
c. not incur further borrowings and deferred payment arrangements
d. demonstrate good financial discipline
According to MAS, the higher the ICR Threshold will be allowed with higher leverage.

The investors, analysts, and credit rating agencies consider the REIT’s ability to service the debt obligations in evaluating its credit profiles. According to the Securities and Future Act, the Interest Coverage Ratio(ICR) is a measure of a REIT’s ability to service its debt obligations from regular sources of income, wherein a minimum ICR can strengthen its debt-servicing.

Based on the ammended paragraph 9 of the guidelines for the grant of CMS license for the regulated activity of providing credit rating services on January 2012, the applicant should describe its business model, rating methodologies, and internal code of conduct. The applicant should describe on how it and its employees and its appointed representatives will comply with the Code of Conduct for Credit rating Agencies.
In terms of its provided list of ancillary services, the applicant should also provide explanation and reasons that these services do not have any conflict of interest with its credit rating business.

As regulated on the SFA under the Disclosure of Interests, the listed issuer defines as:
a. a company any or all of the shares that are listed for quotation on the official list of a securities exchange
b. a corporation (which is not a company, or a corporation constituted as CIS) any or all of the shares that are listed for quotation on the official list of a securities exchange
c. a registered business trust any or all of the units in which are listed for quotation on the official list of a securities exchange
d. a recognized business trust any or all of the units in which are listed for quotation on the official list of a securities exchange
e. a real estate investment trust

The following contracts are under the samples of commercial transactions:
In Trading contracts when Party A decided to sell back the purchased property (with no interim payments) from and to Party B at the prevailing market price, Party A is not obligated to repay or refund the initial purchase with interest.

When Party A buys property from Party B, Party A sets its terms to let Party B hold the property until Party A possess or dispose of it. This applies to storage contracts.

Under Sale and lease-back arrangements, when Party A purchases a property from Party B with a concurrent agreement to lease back to Party B, Party B has no more obligations, in case another tenant lease the property.

Consignment arrangements – when Party A purchase goods with a consignment from Party B (act as sale agent), if unable to look for a buyer, Party B return the goods to Party A.

Traditionally, in the Collective Investment Scheme (CIS), the participants’ contributions are pooled. Investors hand over the property management to the scheme operator, and it will collectively manage the property with the assets of other participants. The only thing is in the Collectively-Managed Investment Scheme, the participants’ contributions are not pooled.
Both traditional CIS and Collectively-Managed Investment Scheme face the same risks.

Precious metals are technically non-financial assets that are widely considered as important as financial assets. It’s real currency equivalent, transferability, and market liquidity makes it underlying assets used as collateral. In the agreement between parties, “funds made available will be repaid with interest at the entire arrangement, and the transfer of ownership of the investment precious metal under the arrangement is for security and not consumption purposes.”

In the proposed amendment of the REITs’ requirements, the REITs are currently given a 45% leverage limit to ensure of not over-extending themselves of acquiring highly geared property. The REITs practice of maintaining a 5% buffer from the regulated 45% limit in order to have a better response on the changing market conditions like declining property prices.

In respect to the board of directors, CEO, and representative applicant criteria, the applicant must uphold governance standards and practices, with a minimum of two board of directors members, wherein one is a resident of Singapore.
CMS license will be granted if the CEO of the applicant is a Singapore resident.

In the proposed regulatory framework of MAS, the buy-back arrangement has a “buy-back guarantee” wherein the purchaser(Party A) buys assets from Party B, giving the rights to sell the asset back to the seller at a prevailing market price. This sale and re-purchase financial assets are under the regulatory requirements of MAS. According to paragraph 2.4 in the Consultation Paper on Proposals to enhance REgulatory Safeguards for Investors in the Capital Markets: As is consistent with the practice in other jurisdictions, the rights, obligations, and recourse available to the contracting parties under such arrangements are governed by well-established general law, and not subject to financial regulation.

Under the definition set out in the SFA, Collective Investment Scheme (CIS) are arrangements in respect of any property, whether securities or futures, commodities, or real estate, wherein the participants (investors)contributions and profits (scheme income) are pooled, and have a lack of day-to-day control over the property management. In this case, the participants entrust the collective management of the property to the scheme operator who’s knowledgeable with dealing scheme property. The CIS arrangements aim to let the participants partake in profits arising from the scheme property.

MAS requires REIT managers to obtain PII. According to guidelines, the amount of PII deductible of the applicant should not exceed 20% of its base capital. Under paragraph 2 in Annex 2, when an applicant carries out the regulated activities of fund management and advising on corporate finance and advising on corporate finance, the minimum PII coverage is cumulative. Also, MAS may consider alternative forms of PII provided that the applicant has assessed the PII without compromising the investors’ interests.

The offeror of CIS would be granted an authorization from the Authority when they have received via OPERA “a copy of the signed trust deed, and written and duly signed confirmation by the responsible person and trustee, or their solicitors, that the trust deed complies with the requirements of the SFR.” The Authority would checked if the submitted copies were signed responsible person and trustee, or solicitors if the trust deed complies with the set out requirements (scheme constituted as a unit trust); “a copy of the written and duly signed confirmation by the responsible person and custodian, or their solicitors, that the constitution of the VCC and contractual arrangements in respect of the scheme comply with the requirements of the SFR and the Variable Capital Companies Act 2018.”
As to the foreign scheme, they are subjected to granting of recognition. They are not required to trust deed or constitution compliance unless when a final recognition will be granted.

Regarding on CIS’ signatures on documents lodged with the Authority, the name and designation of the signatory should be stated below his signature. The authorized person may assign its representative to sign on his behalf the document, wherein both of their names must be clearly stated below the authorized person’s signature. In terms of the signatures are done electronically, the signatory must have his username and password using his personal computer. The signatures must be done via electronic signing software and representatives are not allowed to sign on behalf of the signatory.

The SFA and FAA set out MAS’ regulatory framework for the offer and distribution of capital markets products to give protection to the investors. The regulatory frameworks require the offerers to disclose to the investors the material information to come up with an informed decision. It is essential to give sufficient information like how the projected returns are made, investment horizon, and exit options available. MAS observed an increase of alternative investments offered on non-conventional products, which are structured outside and opposes the regulatory perimeter of the SFA. With the fact that investing has risk, this regulatory does not guarantee the viability of products offered nor have expected returns.

The application for authorization or recognition of Retail CIS: An offeror must fill out and submit Form 1 or Form 2 together with a credit card payment of an application fee of $1,200. An electronic image PDF copy of the duly signed copy of the completed Form 1 or Form 2 must be submitted to the Authority via OPERA.
Schemes that will be constituted inside and outside Singapore are given at least 21 days before the proposed launch date to submit applications of authorization and recognition to the Authority. While for schemes that do not fall into the categories set out in the regulation will be given 45 days to apply as long as it has novel features that will have an impact on investors.

Unlike with the normal sale and purchase agreements which involve real estate, the developer is responsible for the building of the units, and when the development is completed, purchasers will have rights to the property as opposed to rights to participate in pooled profits arising from the building of the apartments. The arrangements say that “investors are offered units (through fractional interests or a room in a block of apartments) in real estate.” In this case, the investor will be “entitled to participate in rental income generated from the scheme operator’s management of the properties as a whole.”

The registration of the lodgment of prospectuses must made electronically on OPERA from 8:00 a.m. to 5:00 p.m. (12 p.m. to 1:00 p.m. not included); registrations later than 5:00 p.m. will be accepted on the next working day. The registration confirmation will take to seven to 21 days from the date of lodgment, and the offeror or solicitor will be informed through a writing or via OPERA.
In the final copy of the prospectus that will be registered and be distributed to investors must contain its registration and expiration date, including also “the risk classification for funds under the CPFIS, which is required under the Authority’s prospectus checklist, and interest rates payable on the Ordinary and Special Accounts of CPF members which are required to be included by the CPF Board.”

Under 285 section of the SFA, the offer of units in Collective Investment Schemes(CIS) must be authorized or recognized. Also, the offer must be lodged with MAS (the Authority).
As regulated in section 296 (Prescribed Period and Prescribed Day for Registration of Prospectus and Profile Statement), the registration of the prospectus (from the date of its lodgement) will be on any inclusive day between the 7th and 21st day. When an extension is given, the Authority may register a prospectus until the 28th day.
A simultaneous application for authorization or recognition and lodgement registration is not permitted by the SFA. The offerors will be advised to obtain approval of authorization before the prospectus is lodged in case of longer processing time.