Singapore Capital Markets Services (CMS) License - Foreign Exchange Trading

1. Who needs to apply? Companies which may be required to hold a CMS license include broker-dealers, corporate finance advisers, credit rating agencies, real estate investment trust (REIT) managers, fund managers and securities-based crowdfunding (SCF) operators. A company must hold a capital markets services (CMS) license to conduct activities regulated under the Securities and Futures Act. If your company wishes to conduct regulated activities of dealing in capital markets products under the Securities and Futures Act (SFA), it must hold a CMS license. 2. What are the admission criteria? When assessing an application for a CMS license, MAS takes into account factors such as:

• Fitness and propriety of the applicant, its shareholders and directors.

• Track record and management expertise of the applicant and its parent company or major shareholders.

• Ability to meet the minimum financial requirements prescribed under the SFA.

• Strength of internal risk management and compliance systems.

• Business model/ plans and projections and the associated risks.

Your company will also need to appoint the following individuals:

• Minimum of 2 directors, at least one is resident in Singapore.

• Chief Executive Officer with least 10 years of relevant experience and is resident in Singapore.

• Minimum of 2 full-time Singapore-based individuals for the regulated activity. Such individuals are required to be appointed as representatives under the SFA.

3. What are the applicable financial requirements? The base capital requirement ranges from S$50,000 to S$5 million, depending on the types of products offered, clientele type, whether the broker-dealer is a member of an approved clearing house or exchange, if it carries any customers’ positions in its books or handles customers’ money or assets or enter into transactions with customers as principal. If the broker-dealer is licensed to conduct more than one regulated activity, the highest base capital requirement among all its regulated activities will apply. For example, if the broker-dealer conducts dealing in capital market products that are securities, units in a CIS or exchange-traded derivatives contracts as a clearing member (where the applicable base capital requirement is S$5 million) and product financing (where the applicable base capital requirement is S$1 million), it will be required to maintain a minimum base capital of S$5 million. A broker-dealer is required to maintain financial resources which are in excess of its total risk requirements. A broker-dealer which is licensed to conduct spot foreign exchange contracts for the purposes of leveraged foreign exchange trading is required to collect margins from the investors. 4. How to apply for a CMS license? If your company is applying for a CMS license, your company should submit Form 1 under the Securities and Futures (Licensing and Conduct of Business) Regulations (SF(LCB)R). In addition, if you hire or appoint individuals to conduct the regulated activity under your license, you have to appoint these individuals as an appointed or provisional representative for that regulated activity. 5. How much is the application fee and how to make payment? A non-refundable application fee of $1,000 is required. A fee advice and instructions on the amount and manner of payment for the application fee will be e-mailed to your company by MAS. 6. What is the processing time required? MAS expects to take not more than 4 months to review and process an application if the business model is straightforward, the applicant meets the relevant admission criteria fully, and the application is complete and clear. For more complex cases, or cases where information is assessed to be incomplete or inaccurate, MAS will need a longer time to review the application. 7. What is the annual fee to be paid by a holder of a CMS license? There are two types of annual fees – (i) annual fees for the CMS license; and (ii) annual fees for the representatives appointed by the CMS licensee. The annual fee is the sum of the annual fees payable across all regulated activities of a CMS licensee. The annual fee ranges from $2,000 to $8,000, depending on the type of capital markets products offered and whether the CMS licensee is a member of an approved exchange or clearing house.