When is approval or recognition required?
A company will need an Approved Clearing House (ACH) or Recognised Clearing House (RCH) licence if it wishes to operate a clearing facility as defined under Part II of the First Schedule to the SFA .
What are the activities conducted by an ACH or RCH?
An entity that seeks to offer clearing or settlement services in Singapore must be authorised by MAS as a clearing facility under Part III of the SFA before it can commence operations. As a general rule, a Singapore corporation that operates a clearing facility will be deemed systemically important and regulated by MAS as an ACH.
Foreign entities operating clearing houses offering services to participants in Singapore are subject to a recognition regime as RCHs where MAS places reliance on the home regulator for the supervision of the foreign entity.
A key consideration for recognition as a RCH is that the regulatory regime of the home jurisdiction of the foreign entity should be comparable to the SFA, of which an important criterion is the application of the Principles for Financial Market Infrastructures standards by the home jurisdiction.
There also has to be adequate arrangements for supervisory cooperation between MAS and the home regulator of the foreign clearing house.
Foreign entities operating clearing houses offering services to participants in Singapore are subject to a recognition regime as RCHs where MAS places reliance on the home regulator for the supervision of the foreign entity.
A key consideration for recognition as a RCH is that the regulatory regime of the home jurisdiction of the foreign entity should be comparable to the SFA, of which an important criterion is the application of the Principles for Financial Market Infrastructures standards by the home jurisdiction.
There also has to be adequate arrangements for supervisory cooperation between MAS and the home regulator of the foreign clearing house.
What are the business conduct requirements?
ACHs and RCHs are obliged to ensure that access for participation in the clearing facility is subject to criteria that are fair and objective, and are designed to ensure the safe and efficient functioning of its facility and to protect the interests of the investing public.
For more details on key requirements, see the regulations, notices and guidelines below:
For more details on key requirements, see the regulations, notices and guidelines below:
- Securities And Futures (Clearing Facilities) Regulations 2013
- Securities and Futures (Corporate Governance of Approved Exchanges, Approved Clearing Houses and Approved Holding Companies) Regulations 2005
- Notice on Financial Market Infrastructure Standards (SFA 02A/03-N01)
- Notice on Technology Risk Management (CMG-N02)
- Notice on Reporting of Suspicious Activities & Incidents of Fraud (CMG-N01)
- Guidelines on Business Continuity Management
- Guidelines on Regulation of Clearing Facilities
- Guidelines on Application of Section 339 (Extra-Territoriality) of the Securities and Futures Act
- Guidelines on Technology Risk Management
- Guidelines on Fit and Proper Criteria
- Guidelines on Outsourcing