Attributes of a fair market include proper trading practices, non-discriminatory access to market facilities and information, and not tilting the playing field in favor of some participants over others. The presence of these attributes will be capable of providing investors with greater confidence to trade in a market knowing that they will not be cheated by other investors with an unfair advantage.

Transparency is the degree to which information about trading (both pre-trade and post-trade) is made available to the public on a real-time basis. All material information embodied in corporate announcements relating to the securities should always be made available to investors in an understandable manner and on a timely basis to allow them to make informed judgements with regards to the transactions they enter and in order to reflect market prices of executed trades.

“Whether electronic or otherwise” implies that all market operators are subject to the same market regulatory regime whether they operate brick-and-mortar trading floors or fully electronic trading platforms. In relation to this, the mere establishment or presence of an electronic facility or channel of communications does not immediately conclude the operation of a market. Other factors must be considered in order to be deemed as a market operator subject to the regulatory regime.

Securities, whether listed or unlisted, which have been offered to investors in the past and are now made available for secondary trading are referred to as issued securities. Unlike primary offerings of securities, issued securities are within the scope of the regulatory regime for markets under Part II of the SFA.

A prospective market operator must apply to MAS to either obtain approval as an approved exchange, to acquire recognition as RMO, or to procure an exemption and operate as an EMO. A pre-assessment must be conducted by a market operator to determine whether to apply as an approved exchange or an EMO. This is done by taking into consideration the factors listed under Paragraph 5.4 of the Guidelines on the Regulation of Markets.

An investor in Singapore is considered to have direct access to the market if he/she possesses the ability to purchase or sell futures contracts or securities available on the market without having to rely on an overseas intermediary. Investors who obtain access to an overseas market by means of an intermediary in Singapore who only redirects the order to another intermediary in the jurisdiction where the market is located cannot be deemed as having direct access to the market.

Price discovery refers to the means of disclosing the full-information value of an asset. This is considered as an inherent attribute of a well-functioning market.

MAS regulatory objectives are primarily achieved by means of requiring systemically important entities to procure an approval as approved exchanges and by imposing a higher level of statutory obligations. Approved exchanges may also be exempt from adhering to certain requirements if the MAS is convinced that these exemptions would not encumber the achievement of regulatory objectives.

A bulletin board provides a platform on which participants are enabled to publish indicative prices, volumes, and counters of the securities they desire to transact in. The facility is treated as a market as it publishes information that is capable of prompting parties to enter into transactions.

“Regularly” refers to the presence of systematic and recurring transactions. Part II of the SFA is not intended to monitor one-off transactions. It is necessary for offers and invitations to be made on the facility on a regular basis. This, however, does imply that transactions must be accomplished at specific intervals or on a continuous basis.

Orderliness is relevant in ensuring confidence in the financial system and in effectively facilitating the intermediation of financial flows because it provides a premise of an expectation that the market will smoothly operate on an uninterrupted basis. Markets characterized by orderliness minimizes the risks of market failure.

Technology service providers merely function as suppliers of infrastructure or software that directs orders to overseas intermediaries who forward the orders to the relevant market. Orders are not performed through these proprietary terminals.

Corporations are given opportunities to conduct operations through fixed income electronic facilities that source market makers who are, in turn, tasked to post quotes for government securities. These market makers are also provided with the ability to control which users are allowed to view quotes or interact with the market maker.

To be deemed and regulated as a market, ir is necessary for a facility to pool together numerous buyers and sellers on a centralised basis. Facilities utilized by a single person for the purpose of making and accepting offers or invites to sell, and, buying and exchanging securities or futures contracts are not qualified as markets.

Corporations arrange proprietary trading terminals in order to provide a platform on which institutional investors may enter orders and transact on the overseas market from the premises of Singapore. In that sense, these facilities also bestow upon institutional investors direct access to the overseas market.

In order to confirm the systemic importance of a market , the MAS looks into the size and structure, or proposed size and structure of the market operated by the corporation, the nature of the investors or participants, or proposed investors or participants, who may use or have an interest in the market to be operated by the corporation and whether the corporation is regulated by MAS under the SFA or any other written law, among other factors. This assessment is relevant in coming up with the decision whether to regulate the market operator as an approved exchange or as an RMO.

The regulation of markets is imposed in order to succeed in promoting fair, orderly and transparent markets, in facilitating efficient markets for the allocation of capital, in transferring of risks and in reducing systemic risk. These objectives are in accordance with the objective of supervision embodied in the “Objectives and Principles of Financial Supervision in Singapore” Monograph 1.They are also established in order to reinforce the public policy objectives laid out by other international standard setting bodies .

Ensuring confidence in the financial system and facilitating the effective inter-mediation of financial flows are achieved through maintaining fair, orderly, and transparent capital markets that do not tilt the playing field in favor of some participants over others. These markets ensure that investors have the confidence that they are able to trade without the threat of being cheated due to the unfair advantage possibly possessed by other investors.

Electronic trading facilities manage the trading of corporate and government bonds. It works by automatically executing and clearing a firm-price order once a match is found in the form of an existing firm-price order. Since the facility paves way for the automatic matching of orders with firm prices, it becomes reasonable to presume that the orders published on the facility will lead to the conclusion of a transaction.

Exemptions may be bestowed on market operators that are already undergoing regulation by MAS or on market operators that pose minimal risks to the regulatory objectives of the MAS; with its non observance generally causing only a lean impact on the financial sector. The MAS grants exemptions if the activities and risks associated with the market operator are deemed to be incapable of hindering the objectives of the regulatory regime.

Approved exchanges and RMOs are subject to compliance with minimal obligations under Part II of the SFA. Among the minimal obligations expected to be fulfilled are the operation of fair, orderly and transparent markets, the management of risks, not acting contrary to the interests of the public and having sufficient financial, human and system resources. The MAS also possesses the ability to subject the RMO to comply with additional obligations depending on functions undertaken by the market.

Obtaining sufficient financial, human and system resources are among the obligations that are required to be fulfilled by regulated market operators to ensure the operation of fair, orderly and transparent markets, to adequately respond to contingencies and disasters, and to establish adequate security arrangements. An RMO is expected to maintain a degree of resources adequate to support trading activities and meet the business and operational needs.

Approved exchanges and RMOS are expected to maintain both suffcient systems and controls and appropriate emergency procedures and business continuity plans. They are also expected to ensure that such systems, procedures and continuity plans are tested and reviewed on a periodic basis. Besides the operation of the market, possible risks relating to associated businesses must also be considered.

In making amendments to business or listing rules, approved exchanges or RMOs must determine the impact of the changes on the participants. In doing so, they must allot a reasonable time between publish date and effectivity date, give the participants with the opportunity to comment on the proposals made by means of a consultation, and provide the MAS with a summary of the comments received post-consultation

An operator of an overseas market must be open to sharing information with the MAS, must have formed adequate arrangements with both the regulator of the head office and the market operator in Singapore regarding regulatory co-operation and the supervision of corporations and must have a head office with an established regulatory regime comparable in degree to those laid out in Section 5 of the SFA.

An RMO must take into consideration the nature of investors in terms of their level of sophistication, importance to the system and the impact that any market failure may have on them and the broader financial sector. A systemically-important market is usually one that is widely utilized by retail investors.

Approved exchanges are expected to maintain appropriate and adequate surveillance and enforcement programmes in place to be able to monitor compliance of members with business rules and ensure that members are disciplined through fair and objective means. These support the smooth and stable operation of the market.

Centralized price discovery works by means of sourcing multiple market makers who allow participants to interact with quotes on the platforms where the market makers facilitate offers and invites to sell, and as well as the purchase and exchange of fixed income products on a centralized basis. These electronic facilities perform the price discovery function of a market and are therefore subject to the regulatory framework of Part II of the SFA.

A systemic risk indicates the possibility of being subject to critical instability, resulting from particular company events, that is capable of prompting the collapse of an industry or the economy as a whole. It is necessary to reduce systemic risk to a minimal level in order to ensure public confidence in the stability of financial systems.

Efficient markets are achieved by maintaining an unhindered and reliable process of the interaction of bids and offers and price discovery. This paves way for the efficient allocation of scare capital and facilitation of risk transfers.