How are markets and exchanges regulated in Singapore?
An entity operating a market in Singapore for securities, derivatives contracts or units in a CIS, may be considered to be operating an organised market under Part II of the SFA. A person who operates an organised market must be regulated by MAS. As a general principle, markets that are systemically-important will be regulated by MAS as AEs (Approved Exchanges). Other markets may be regulated as RMOs (Recognised Market Operators). AEs are required to comply with a higher level of statutory obligations than that required of RMOs.
Operating a market in Singapore is a licensable activity. A company will need an AE or RMO licence if it wishes to operate an organised market. A corporation that MAS considers to be "systemically-important" will be reuglated as an AE. Markets outside of this definition will be regulated as RMOs or exempted.
A person seeking to establish or operate a market in Singapore can only do so if the person is either approved as an approved exchange, recognised as a RMO or exempted as an exempt market operator (“EMO”) by MAS.
As a general principle, corporations operating markets that are systemically-important will be regulated by MAS as approved exchanges. Corporations operating other markets may be regulated as RMOs or exempted from regulation. Approved exchanges are required to comply with a higher level of statutory obligations than that required of RMOs.
Platforms such as SGX or Asia Pacific Exchange that facilitate access to equity and/or debt markets may constitute a market in Singapore. Markets are licensed either as an Approved Exchange (AE) or a Recognised Market Operator (RMO).