MAS Proposes to Exempt Exchanges/Market Operators Offering Limited Post-Trade Services from Regulation as Clearing Facilities

The Monetary Authority of Singapore (“MAS“) is seeking comments on its proposal to exempt an approved exchange (“AE“) or a recognised market operator (“RMO“) which provides limited post-trade services after the execution of a trade on its platform from being regulated as a clearing facility under the Securities and Futures Act (“SFA“). It is proposed that the exemption will be granted to AEs or RMOs which only provide post-trade services relating to verifying the transactions conducted on the organised market that they operate and calculating the obligations of the parties under those transactions before the transactions are cleared or settled bilaterally between the transacting parties. Such activities fall within the definition of “clearing or settlement”, in relation to a clearing facility, under the SFA.

The proposal is set out in the MAS “Consultation Paper on Proposed Exemptions for Approved Exchanges and Recognised Market Operators that Provide Certain Clearing and Settlement Services”. The Consultation Paper is open for consultation until 9 September 2022.

This Update provides a summary of the requirements for qualifying for the proposed exemptions for such AEs and RMOs which provide limited post-trade services that fall within the definition of “clearing or settlement” under the SFA.