Clearing houses

Clearing houses are licensed and governed under the Securities and Futures Act 2001 (SFA)  and its subsidiary legislation, including the Securities and Futures (Clearing Facilities) Regulations 2013 .

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.