In Singapore, capital market firms include traders, investment administrators, REIT (Real estate investment trust) administrators, corporate finance advisors, securities-based crowdfunding providers, credit rating agencies, accredited CIS trustees, registered trust companies, and financial consultants.

Broker-dealers, corporate financial advisors, credit rating firms, real estate investment trust (REIT) managers, and stock-based crowdfunding providers are regulated by the Securities and Futures Act (SFA).

Entities such as brokers, corporate finance advisors, and credit rating agencies require a CMS license. A corporation must hold a capital market services (CMS) license to perform operations governed under the Securities and Futures Act.

The scope of the operations of the broker-dealer can include: the purchase, sale, delivery or delivery of capital markets products on behalf of another person; induce another entity to obtain, sell, transfer or obtain capital market products; offer funding to another entity for the acquisition or selling of capital market products; and/or offer custodial services for securities.

If a firm plans to acquire and sell shares or futures contracts on behalf of customers and the operation of those transactions are carried out on a scheme, recurrence, and continuation basis, it is likely to be regarded as a broker-dealer and will need to be licensed.

Depending on their business model, SCF operators can participate in controlled capital market transactions for securities or fund management products, unless an exception applies. Where an investment portfolio is managed by the SCF operator on behalf of the owners, the SCF operator must be authorized for the operation of the funds.

Prospectus waivers are required for deals such as personal offers of no more than $5 million in any 12 month period; offers of not more than 50 individuals in any 12 month period; offers to institutional investors, and offers to registered investors and family members. Further detail on the exemption from prospectus can be found in Sections 272 to 279 of the SFA.

The SCF operator is expected to enforce regulations, procedures and controls that are commensurate with the size, scope and sophistication of its company, including a separate enforcement feature in Singapore. It should also comply with the protection of clear financial documents and the issuance of account statements and risk reports to customers, as well as the MAS’ anti-money laundering provisions.

International companies running clearinghouses providing services to Singapore participants are subject to a registration scheme such as the Recognized Clearing House (RCH) Licence, where MAS depends on the home regulator to oversee the foreign company.

It must be approved as a Licensed Trade Repository (LTR) by MAS. External organizations providing trade monitoring services to allow participants to meet their obligations under the MAS monitoring requirement are liable to licensing as a Licensed Foreign Trade Repository (LFTR).

If a firm gathers and holds the assets of third-party participants in a pooled investment arrangement or invests them in separate portfolios of capital markets items such as stock, fixed income, and financial derivatives, it is investing the assets and will need to be authorized or registered to do so. On the other hand, whether a corporation holds patented assets or resources belonging to a particular entity or group of similar individuals, it is likely to be excluded from licenses or registering.

LFMC Retail – Investment management business for all kinds of clients, including institutional investors. Certified / Institutional LFMC – Company of investment management for certified and institutional investors only. Venture Capital Fund Manager – Oversees the venture capital assets. These funds must follow some qualifying requirements for the investment, such as investing primarily in start-ups.

Activities include: the examination of facts or data; the formulation or drafting of an opinion on the creditworthiness of a rating target; the assessment or approval of a credit rating; the tracking or revision of a credit rating issued; the creation or scripting of credit rating techniques or models; and the evaluation or approval of credit rating methodologies or designs.

The Financial Advisers Act is the act which governs financial advisers and their agents and managers, and for other reasons relating thereto or related thereto.(Chapter 110)

A provisional delegate shall be an experienced citizen who transfers from overseas to Singapore and shall be allowed a grace period of 3 months in order to conform with the applicable review requirements.

In addition to the qualifying criteria, persons must: be in the process of migration or have already transferred to Singapore; have at least 3 years of work experience applicable to the supervised activities to be carried out as a provisional representative; and comply with relevant evaluation standards within 3 months of being named as a provisional representative.

It shall be effective for a period of up to 3 months from the date of appointment of the provisional representative. He can continue to carry out supervised activities as a designated representative after his business has informed MAS of the fulfillment of the applicable inspection criteria by means of a one-time application of Form 3D; and his name has been recorded in the Public Register of representatives.

Examples include if a firm is engaging in bonds with approved investors, specialist investors or retail investors. If a company is investing on its own account or on a similar company’s account (i.e. exclusive investing) with or through authorized financial institutions. If a company is currently authorised by MAS as a bank, merchant bank, investment company or insurance company. However, the corporation would be expected to comply with the official notice and the provisions of the SFA for the conduct of operation. The organization shall inform MAS by sending the form 26 within 14 days of the commencement of the controlled operation under the SFA.

Creation of an express trust; serving as a trustee of an express trust; arrangements for another individual to serve as trustee of an express trust; and the provision of trust management services to an express trust are trust services that will need to be approved under the TCA.

International companies running clearing houses providing services to participants in Singapore are subject to a registration scheme as RCHs (recognized clearing houses) where MAS relies on the home regulator to monitor the foreign company.

As a general concept, markets that are systemically relevant will be governed by the MAS as (approved exchange) AEs. Other markets can be regulated as RMOs (recognized market operators). AEs are expected to conform with a higher degree of regulatory requirements than those provided by the RMOs.

If the financial advisor primarily gives guidance or market reviews to no more than 30 approved clients. The corporation is expected to submit Form 20 within 14 days of the start of operations. (Form 20: Notice of Commencement of Business by Persons Exempt from Holding a Financial Adviser’s Licence under Section 23(1)(f) read with Regulation 27(1)(d)

Full banks may conduct universal banking practices, including the following: deposit, cheque services and loans, and all other entities controlled or approved by MAS, including financial advisory services, insurance brokers, and stock market services. Full banks are forbidden from participating in non-financial operations. Section 30 of the Banking Act describes the approved activities.

Wholesale banks are authorized according to and regulated by the Banking Act. Wholesale banks can indulge in the same type of banking activity as full banks, except that they do not engage in Singapore dollar retail banking activities.

Merchant banks are authorized under the Singapore Monetary Authority (MAS) Act and work under the Merchant Bank Instructions and the Merchant Bank Operations Guidelines. Their operations include: lending, wealth management, private banking, stock trading, and underwriting and investment banking.

The factors are: Financial soundness, track record, global rating, and credibility of the FI (financial institution), parent group, and core shareholders. Power of oversight of the home government, and the readiness and capacity of the home supervisory authority to collaborate with the MAS and its structure for cross-border cooperation. Approved permission of the supervisory authority of the native country to set up a banking operation in Singapore. Well-considered banking and financial services policy in Singapore and clear growth strategies to ensure sustainable economic viability. Robust risk control mechanisms and procedures that are commensurate with the complexity of the FI and the planned sector.

Dealing with capital market securities, stock finance and the provision of custodial services are practices for which brokers are usually expected to hold a CMS license.

Examples of exemptions open to fund management are: where a company maintains a pool of immovable assets for approved and retail investors; when a company manages funds for similar corporations; or where a company handles capital belonging to a particular group of associated family members.

Markets that are systemically relevant would be governed by MAS as AEs. AEs are expected to comply with a higher degree of regulatory requirements than those provided by RMOs. Global companies providing services to participants in Singapore are subject to the approval system as RMOs, where MAS depends on the home regulator to regulate the international agency.

Representatives are expected of entities conducting key roles in a REIT company, such as fund management, wealth control, finance, marketing, and investor relations.