Market Participants are expected to uphold high standards with regards to their personal and professional integrity in their conduct, act in an ethical and professional manner, and exhibit clarity and accuracy in their communications, and protect confidential information. In relation to dealings with entertainment, favors and gifts, market participants are required to establish guidelines that are catered towards protection against abusive practices and excess. Meeting over meals is a legitimate practice, but this does not entail that it cannot be a source of abuse. For this reason, reasonable thresholds are put in place in accordance to the relationships and activities to which they relate. In addition to this fact, the solicitation of gifts is not encouraged unless it is considered as genuine and charitable acts. In relation to this, market participants are given the responsibility of notifying management and their compliance department whenever unusual or fraudulent activities take place.

A value spot refers to the conventional future day upon which a transaction done for immediate delivery settles. Quotations for foreign exchange are for value spot. A value spot marks two business days from the date of transaction except for certain currency exchanges such as USD/CAD and USD/PHP, as market convention value spots for the said exchanges are marked one business day from the date of transaction.

The guidelines for the application of FATF standards to countries and competent authorities covers the necessity to subject VASPs to licensing and registration requirements. Countries are deemed to have responsibility for ascertaining that their respective jurisdictions have designated one or more authorities to facilitate the licensure or registration of VASPs. Licensure and Registration of VASPs are required to take place in the jurisdiction in which they are created. The guidance further highlights the necessity to ensure that efficient legal or regulatory controls are put in place to prevent criminals or their associates from holding the controlling interest in VASPs. This includes the necessity to seek approval from authorities in the event that circumstances require substantive changes to be made with regards to the shareholders, business operations and structures in a VASP. Furthermore, it must be ensured the countries are equipped to conduct an identification of natural or legal persons that are unauthorized to carry out VA activities or operations and exact the appropriate sanctions.

The Singapore Guide to Conduct and Market Practices for the Wholesale Financial Markets mirrors the FX Global code by endorsing the same principles, extending its scope to include other asset classes and setting financial benchmarks. It serves the purpose of setting out additional principles that address specific circumstances revolving around the Singapore foreign exchange market. However, the guide is not prescriptive in nature. It adheres to the principle of proportionality; which implies that the principles that must be manifested and that the steps that must conducted should align with the principles adopted by the market participant in relation to wholesale financial markets.. It is important to note that the guide does not impose legal or regulatory obligations and while numerous efforts have been exerted to address the various aspects of conduct and market practice, it does not present to be exhaustive. Market participants are merely expected to draw upon the broad principles embodied by the guide.

Non-deliverable forwards are much like forward contracts in that they provide an avenue for locking in a certain rate for a period of time. However, as opposed to forward contracts, wherein the currency is delivered at the end of the contract, a cash settlement is instead put in order. This cash settlement is determined through extracting the difference between the contracted price and the settlement price.

Countries and obliged entities are required to devise CDD processes that help assess the ML/TF risks that are linked to the covered activities or business relationships and transactions. This is often done by opening and maintaining accounts that assist by providing a means in which CDD information may be collected when services are provided or engagement in VA activities are done on behalf of customers. If an occasional transaction is carried out, the threshold required to conduct CDD is USD/EUR 1000. The use of VA kiosks as an occasional transaction, whereby the provider or owner/operator of the kiosk and the customer using the kiosk transact on a one-off basis may be considered by some jurisdictions, but may also be deemed required to register as VASP because transactions are not interpreted as occasional. Multiple characteristics of VASPs come with their corresponding risks. This includes its global reach that have exposed them from abuse that may be imposed by criminals, money laundrers, terrorist financiers and other illicit actors.

The Guide emphasizes the responsibility of each Market Participant to manage the risks that stem from its activities. It is relevant to ascertain the establishment of a sound and effective governance framework that highlights the responsibility of enabling a comprehensive oversight of activities in the financial market and to cultivate responsible engagements in the market as well as to maintain control and adherence within the environment that paves way for effective identification, management and reporting of risks associated with their financial market activities. WIth regards to transactions with clients and counterparties, market participants are expected to develop policies and procedures that address the means by which transactions are carried out. Procedures should be inclusive of defining effective controls over client margin accounts. This is characterized by procedures on margin maintenance, margin call, top – up and close out. It is also required of them to conduct KYC checks on brokers and to investigate the reputation and market standing of brokers.

Brokers and submitters are expected to impose controls that will enable them to mitigate the risks of conflicts of interest. They must determine appropriate seating arrangements for staff responsible for submissions, for sales and trading and for reviewing the submission process. Market participants are, however, given the liberty to establish an organizational structure which they deem appropriate. In the absence of an implementation of segregation of duties, a market participant may be placed under enhanced mitigating controls.

International co-operation is relevant in the context of VASPs that seek to register or license themselves in one jurisdiction, and as well as in the provision of products or services “offshore” to customers located in other jurisdictions. It is therefore important for countries to establish tools that will enable them to co-operate with one another; providing mutual legal assistance, assisting in the identification, freezing, seizure and confiscation of proceeds and instrumentalities derived from a crime that may take the form of VAs as well as other traditional assets associated with VASP activities. Supervisors of VASPs are thus equipped with the capacity to exchange information promptly and constructively with their foreign counterparts and are thus requested to do so regardless of the supervisors’ nature or status or differences in the nomenclature or status of VASPs. Furthermore, the guidance states that the application of confiscation and provisional measures should be in accordance with the “property laundered from, proceeds from, instrumentalities used in, or instrumentalities intended for use in money laundering predicate offences, or terrorist financing; or property of corresponding value” in the context of VAs.

In accordance to the regulatory regime for markets, individuals seeking to establish or operate a market in Singapore are required to secure approval, recognition or exemption from the MAS prior to doing so. It is relevant to determine the systematic importance of the entities in order to ascertain the means through which they will be regulated. Among the many factors to be taken into consideration is the nature of the services provided, or to be provided, by the market to be operated by the corporation. In relation to this, the MAS conducts an examination of the range of services provided by the market operator, such as the provision of quotes, matching of orders and provision of data services in order to determine whether or not the market embodies systemic importance. The other options are definitive of the other factors that must be examined in order to identify whether an entity qualifies for systemic importance.

The Global Code is a code of conduct established for the global wholesale foreign exchange market, and the SFEMC has accordingly adopted the Global Code. Although the Global Code applies only to foreign exchange, this guide has extended its scope to other asset classes and the setting of financial benchmarks. The Global Code constitutes both generic and fx-specific principles. Generic principles refer to those that are equally applicable across asset classes, which have been deemed good practices in the non-foreign exchange markets. The SFEMC, thus adopted these principles from the Global Code to form part of the guide, and in order to be applied among all assets. The FX-specific principles, on the other hand, address specific concerns with the foreign exchange market and were thus excluded from the guide.

The FATF Recommendations require supervisors to allocate and prioritize more supervisory resources to areas of higher ML/TF risk. It is apparent that in order to do so, supervisors should determine the frequency and intensity by means of conducting assessments on a periodic basis with regards to the level in which the sector and individual VASPs are deemed exposed to ML/TF risks. In the event that a jurisdiction is given the discretion to consider an entire sector as higher risk, countries should maintain the ability to understand and as well as be given the opportunity to explain and expound on the granularity with regards to the categorization of individual VASPs within the sector with their customer base, involvement with other countries and the applicability of AML/CFT controls as basis. It is also relevant that competent authorities acknowledge that in a risk-based regime, the adoption of identical AML/CFT controls will not be systematically uniform across VASPs and that single, isolated incidents that represent a transfer or exchange of illicit proceeds do not immediately invalidate the integrity of a VASP’s AML/CFT controls.

The RMO regime governs the application of the MAS’ risk-based approach towards market operators; establishing substantial regulatory requirements inclined to address the risks posed by the market. Under Division 3 of Part II of the SFA, a number of minimal obligations are applicable to RMOs, depending on the functions that the market undertakes. Among these obligations are the necessity to ensure that every organized market it operates is a fair, orderly and transparent organized market, to ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers and to manage any risks associated with its business and operations prudently. However, to submit such additional information and reports in relation to the audit as the Authority considers necessary constitute an additional power of authority with respect to the governance of the performance of auditors’ duties. For this reason, it is not among the general obligations of an RMO.

The approach the SFEMC takes in dealing with market disruption depends on the nature and overall impact of the unforeseen circumstance on the financial markets in Singapore and their entirety. In general, they are tasked to work hand in hand with market participants and industry bodies both on local and foreign levels, and as well as with regulators to be able to mitigate the risks of uncertainty and reduce its possible impact on trading and settlement operations to an acceptable level.

U.S. approach utilizes the tools and authorities of the FinCEN, the U.S. FIU and administrator of the primary U.S. AML law, BSA, OFAC, IRS, the U.S. SEC, the U.S. CFTC; and other departments and agencies to support them in their risk mitigation endeavors. Under the U.S. approach, money transmitters are subject to the governance and monitoring of FinCEN. These money transmitters cover any person that possesses any engagement in the business of accepting and transmitting value from one person to another person or location by any means. They also conduct supervision and governance over derivatives on digital assets that are not considered as securities; over which the CFTC possesses complete regulatory control. However, The Federal Law for the Prevention and Identification of Operations with Resources of Illegal Proceeds are not among the considerations taken by the U.S. jurisdictional approach as this is a law existing in Mexico to cater to their own risk reduction needs.

One of the obligations that an RMO is expected to fulfill is to be responsive to the needs of the authority by means of providing the requisites that support the authority in the performance of their obligations. It is the duty of the RMO to secure all returns and provide these to the authority as necessary. In addition, RMOs are also obliged to furnish books and information containing information about its conduct of businesses. The Authority may also require books and information that contain the transactions, whether completed or uncompleted, effected through the organized market of the RMO. The guidelines, however, do not state that books and information relating to the settlement procedures that an RMO must establish is required to be submitted to the Authority under any circumstance. The necessity to establish settlement procedures, however, is highlighted as a requirement in the listing, de-listing, or trading of certain instruments, contracts and transactions.

A value date is referred to as the date in which a transaction takes place. The indication of a value date on pertinent documents is a requirement for the determination of the quotation of prices. Conflicts may arise due to the differences in the interpretation of the definition of “value date” and “business day”, because of the observance of different holidays in various financial centers. It is therefore expected of market participants to undertake the obligation of providing clarity to their counterparties with regards to the precise dates for settlement transactions. Interpretations of date conventions may vary across different locations. The guidance, therefore, recommends that the month be spelt out in order to address the confusion and other concerns attached to identifying the date in which quotation for prices must take place .

Effective systems must be established for the monitoring of VASPs and as well as for ensuring their compliance with national AML/CFT requirements. An array of effective, proportionate and dissuasive sanctions, whether criminal, civil or administrative, should be at the disposal of the authorities to manage VASPs that fail to comply with AML/CFT requirements. It is necessary for VASPs to be licensed or registered, however, a country is not expected to set up a separate licensing or registration system with regards to natural or legal persons already licensed or registered as financial institutions within that country due to the fact that they have already acquired the permission to engage in VASP activities and are already governed by the corresponding obligations associated with the capacity to do so. Furthermore, countries are required to obtain and hold the required accurate originator information and it is expected that the required beneficiary on virtual asset transfers shall submit the said information to the beneficiary VASP or financial institution in a prompt but secure manner to enable appropriate authorities to have access to it upon request.

Cap. 289 of the SFA defines the general powers of the authority. One of which is the power to remove officers. This becomes applicable under several circumstances under which the guide deems that it is appropriate. First and foremost, it can take effect in the event that authority is convinced that any breach has intentionally been made by an individual or that an approved exchange or recognized market operator has been manipulated in a manner that contravenes the act. In addition, the power is also made available in case there have been failures to adhere to the duties of the officer’s office or employment or in case of undischarged bankrupts located in Singapore or elsewhere. The guidance maintains emphasis on the need for compliance with the principles it lays out, and as well as other business rules. In case of failure to comply with these, and in the absence of a reasonable excuse, the power of authority to remove officers may come into play.

A benchmark administrator is held responsible for ascertaining the overall credibility, governance and supervision of a benchmark, and to pave way for a representative, transparent benchmark that is in accordance with clear governance and accountability mechanisms. An administrator must carry out their tasks independently without undue influence from market participants or groups of market participants.

Prior to seeking involvement in electronic trading activities, it is highly essential for all Market Participants to adopt prudent risk management frameworks, as well as to comply with the MAS. Any material breach of security to those systems, such as through hacking or other intrusions, should be immediately addressed. Transactions that are executed through electronic trading systems must be carried out in accordance with the provisions and all documents and agreements that have been established by the individual provider. A market participant is expected to honor orders that are keyed into the electronic system. In case of a line failure, it is important to contact the provider or counterparty involved immediately in order to clarify the transaction status. In the absence of applicable terms and conditions or any document with regards to the utilization of an electronic trading system, the guide shall apply. All the provisions shall apply uniformly across transactions and business conducted via electronic trading systems.

Submitters must engage in transactions while maintaining integrity, professionalism and adopt the highest ethical standards with regards to benchmark contribution and adopt policies that result in the substantiation of benchmark contributions against available objective evidence, safeguarding of risks and perceptions of conflict of interest between the benchmark contribution process and other activities and as well as the assurance of integrity embodied in the data submitted to the Calculation Agent.

The Act on Virtual Currency Providers was implemented to take effect beginning May 1, 2019, requiring VASPs to obtain authorization from the Finnish Financial Supervisory Authority (FIN-FSA). Those equipped with the capacity to provide services before the legislation came into force are deemed included among those who are required to obtain registration on or before November 1, 2019. Among the qualification requirements necessary for registration include basic fit and proper checks, requirements for handling customer funds, and simple rules regarding marketing. Before the implementation of the Act, the FIN-FSA had already been working with organizers of ICOs from the point of view of securities markets legislation and financial instruments. The supervision experience of the FIN-FSA has revealed that VASPs are now open and willing with regards to being governed and adhering with the necessity to seek supervisor endorsement for their activities

A market’s efficient functioning is highly dependent on the ethical and responsible conduct of market participants as they undertake market activities. The principles laid out in the guide extends its applicability to all asset classes. In terms of price/rate quotations, market participants, whether acting as a principal or broker, are obliged to provide clarity with regards to whether the prices they are quoting are firm or merely indicative. Unless otherwise qualified, prices quoted by brokers are assumed to be firm in marketable amounts. A market participant is correspondingly expected to quote a firm price/rate and state his requirements to a broker and deal at those terms with an acceptable name, regardless of the market level. Brokers are, on the hand, given the responsibility to regularly confirm with their principal with regards to whether the latter’s interests at specific prices/rates are still firm.

Among the best practices of surveyed and traded benchmarks are experience, seniority, and character, supervision, and management of information. This entails that the staff tasked with the oversight of the submission process should possess substantial experience and seniority, and are deemed to be committed to standard of conduct. This shall further enable them to appropriately govern the submission in an effective manner. In addition, information is required to be managed in such a way that will ensure the proper governance over contributions.

The Regulatory Regime for Markets lays out the necessary guidelines that govern the Monetary Authority of Singapore’s pursuit of the regulatory objectives on markets. This is to ascertain that the promotion of fair, orderly, and transparent markets, the facilitation of efficient markets for the allocation of capital & the transfer of risks; and as well as the reduction of systemic risk are made the utmost priority in terms of market operation. The establishment and operation of markets in Singapore by any person are subject to the approval and regulation of the MAS. They may either be recognized as an approved exchange or as an RMO or may all together obtain an exemption from regulation. Generally speaking, approved exchanges are subject to a higher level of statutory obligations than that required of RMOs. Furthermore, Corporations operating markets are likewise covered by the guidelines: in that, they may either be regulated as RMOs or be exempted depending on their systematic importance.

The chapter governing general dealing principles and market conduct indicates that direct dealing among market participants must be subject relevant guidelines in order to ascertain ethical and responsible conduct among participants with regards to their transactions. Market Participants are not expected to fulfill the responsibility of quoting whenever called upon. However, it is deemed necessary for an answering party to respond and immediately express its unwillingness to quote whenever applicable. Dealing on predetermined amounts is not a requisite that market participants are expected to comply to. Market participants are, although, expected to deviate from placing orders with brokers with the intention of identifying the counterparty,in order to conclude the full amount of the order in a direct transaction.

The general assumption with regards to corporations operating markets is that those that embody systemic importance shall be regulated by the MAS as approved exchanges. In order to examine whether or not an entity represents systemic importance, a list of factors was made available to which the MAS draws reference. One of the factors is the size and structure, or proposed size and structure, of the market operated by the corporation among others. In respect of this, the MAS examines the volume and value of transactions conducted on the market, the number of investors trading on the market and the number of participants in order determine if there are indications of the market’s systemic importance. In addition, the structure of the market is in reference to the means by which the market is organized. The other options are definitive of the other factors that must be examined to determine the systemic importance of an entity.

Confidentiality is made to ascertain that information on contributions shall only be made available for the exclusive use of those involved in or is responsible for the benchmark contribution process. In case any doubts arise with regards to this, the information may be forwarded to regulators.

In accordance with Part II of the SFA, approved exchanges and RMOs are expected to adhere with a list of common obligations. In order to achieve the desired status quo, a supplementary guideline that deems to ensure that access for participation in its facilities is subject to a criteria that are fair and objective. Having said this, the MAS expects approved exchanges and RMOs to ensure that the ability to participate in a market is dependent upon a criteria that is not restrictive and does not limit access on grounds unless the operations of its market becomes susceptible to risks. The approved exchange or RMO is also required to undertake the responsibility of disciplining its members in a fair and objective manner. Proper and sufficient systems and controls should additionally be established to aid in the identification, assessment, monitoring and management of risks to its market operations.