Commodity options trading 2008 singapore

For the establishment of a Compensation Fund, or any other scheme or system, accepted by the Board, to compensate customers who suffer pecuniary loss of money through the oversight or failure of a member, or any of its directors or employees. The following article is an overview of the legislation, licensing and compliance requirements pertaining to OTC commodities derivatives trading business in Singapore. Businesses that are dealing in commodity futures contracts are required to hold a Capital Market License from MAS. When the proposed changes become effective, entities dealing in both commodity derivatives and commodity futures will require only a Capital Market License from MAS instead of the current dual license requirement. The commodities trading sector is strictly regulated in Singapore. The decision of the Minister will be final. February 2012 by MAS and IE, proposing the transfer of regulatory oversight of OTC commodity derivatives under the CTA to the SFA.

Persons who engage in trading on their own account not involving public funds. The rationale for the proposal is to streamline regulatory approach between commodity derivatives and commodity futures. To conduct the business with due regard to the interests and protection of the public. Trustee of prescribed trust or Other Persons prescribed by IE. Singapore also commands seamless connectivity to more than 600 ports in over 120 countries. Apart from the exempted categories of persons, any person who provides broking services, advisory services or operates a pool for commodity futures contracts, commodity forward contracts, trading in differences, leveraged commodity trading and certain forms of spot commodity trading, must apply for licenses. Industry, within one month after the notification of rejection. Minister may by notification in the Gazette, prescribe to be a commodity. The license issued by IE Singapore is valid for a period of one year and is renewable thereafter. Constitution of the proposed commodity market, certified to be the true copies thereof by the person signing the application, must accompany the application.

Persons or firms engaged in any form of commodity trading activities are subjected to strict regulations under the Commodity Trading Act, enacted in 1992. In exceptional circumstances IE may issue licenses with different validity periods. Now, although there are tough competitors emerging to challenge its position, the Singapore government has preemptively devised and revised strategies to sustain its traction to the commodity traders. Presently International Enterprises is administering the CTA. Similarly, entities operating markets and clearing facilities for futures and derivatives will require approval from MAS alone instead the present system that requires approval of MAS and IE. Please note that this is neither a comprehensive compilation of requirements nor a professional advice but a broad overview of requirements for OTC derivatives trading business. Entities operating market that list commodity derivatives and entities operating clearing house for commodity derivatives require the approval of IE. An application for approval as a commodity market or clearing house shall be made in the prescribed form as the IE may determine. OTC paper trading and a well regulated transparent exchange traded futures market.

The necessary application forms along with relevant documents and fees need to be submitted to IE Singapore for processing. With the transfer of the regulatory oversight of commodity derivatives from the CTA to the SFA, the remaining regulatory scope of the CTA will be spot commodity trading. It must be noted that post amendment to CTA in 2008, entities which engage in broking transactions in both commodity derivatives and commodity futures are dually licensed by IE and MAS. Proprietary account trading details of the pool operator, advisers and directors, or a statement explaining why such details are not forthcoming for each such person. When the transfer is complete, a single Capital Market License will allow you to participate in all forms of commodity derivative trading, market operations and clearing facilities. This applies to commodity brokers and spot commodity brokers. IE Singapore will receive the required application forms, supporting documents and fees.

You must obey CTA regulations unless you qualify for an exemption under Section 14A. IE licensing will no longer be necessary. Real or potential conflicts of interest you may have with a director or broker. Memorandum and Articles of Association that is attached to the application form. The IE issues the license. You must regularly send written detailed statements to customers showing transactions, profit and loss of money, funds held, financial charges, credits and other important information. Records that account for and explain transactions such that you can create accurate financial statements that will withstand audit.

IE gives you more time. Should I registered GST for my Company? Account for this money separately from your own. Protect your records from loss of money, damage or falsification. How much each participant is liable for that exceeds the amount contributed. If you operate a commodity pool, send an annual report to each pool participant. How you figure fees and how much you charge. You sure do if you broker trading in commodity derivatives apart from futures. The CTA will still be active in regulating spot, or current, commodity trading.

Ready to setup your Commodity Trading Company in Singapore? If you operate a commodity pool, give each potential customer a document disclosing details in a set format before you ask for or accept money, securities or other property. You need a license to operate a commodity derivatives market or clearing house in Singapore. Make sure the statements are correct, fairly report your assets and liabilities, and are properly signed. Licensing suppresses bucket shops and other unscrupulous schemes. However, the international drive toward stronger regulation of OTC derivatives prompted the MAS in 2012 to propose that the SFA assume oversight of all commodity derivatives. CTA requirement for segregated customer funds for five days in a row, submit weekly financial reports until you correct the condition, and then for eight weeks more. If you are looking for an excellent place to set up a commodity trading business, look no further than Singapore.

Get the reports over to the IE by Monday of the following week. If you want approval to start a clearing house or commodity market, fill out the application provided by IE. This move streamlines and optimizes control over futures and other derivatives. MAS and IE if you broker commodity derivative and futures transactions. Make sure you and two directors sign the statements. Do You Need a License? Send the statements at the close of business on the last day of the month or some other regular date, but you must send them within three months. How often the pool distributes its profits or capital, along with any salient details.

You can appeal a rejected application within a month to the Minister for Trade and Industry. CTA explains in its regulations. Records and contracts for at least six years. Click Commodity Trading Act for a list of legitimate companies. Those trading physical commodities should consult the Trading Company Setup Guide. You must obtain an MAS Capital Market License if you want to operate in the Singapore commodity futures sector. The company director or secretary must certify these copies. This includes futures for gold, oil, and other assets. The CTA fights fraud and protects investors.

The CTA is administered by International Enterprises Singapore. Monetary Authority of Singapore, or MAS. Set up a separate trust account for any property, securities or money you hold on behalf of your customers. Commodity Trading Act of 1992, or CTA, regulates the commodities trading sector. Details and descriptions of how much the pool spent and will spend on expenses in the previous and upcoming year. The market must immediately report you to the IE. CTA requirement for segregated customer funds, whichever is greater. IE can decide to cut you some slack regarding capital requirements, as long as you play ball.

Every quarter, submit your financial statements to IE within 30 days of the end of the quarter. What kind of performance you actually had over the last three years and why any material differences regarding performance exists among accounts. Other accredited investors can be trustees or others specified by IE. All participants must strictly adhere to its rules. How your trading program works, what types of contracts you trade and any trading restrictions. Singapore, including issues relating to compliance, legislation, and licensing. For more information about Singapore Company Incorporation, please click Singapore Company Incorporation. Your license enables you to trade all types of commodity contracts. Other commodity derivatives, such as options, stayed under the CTA. An announcement that you will send participants monthly or quarterly account statements and certified annual reports.

IE and follow the directions of the Board. If you are a commodity broker or a spot commodity broker, hire an auditor to check your accounts. If you are member of the commodity market, you must inform the market and do what they recommend. Financial statements that have been audited according to generally accepted financial standards. The MAS controls all types of futures, both commodities and financial instruments. But they usually end up losing their entire investment. CFA was renamed the CTA.

Apart from the exempted categories of persons, any person who provides broking services, advisory services or operates a pool for commodity forward contracts, trading in differences, leveraged commodity trading and certain forms of spot commodity trading, must apply for licenses. Exemption will be primarily based on whether trading activities are financed using public funds. Was there public consultation in the drafting of the amendments? If they are unsure, they should seek legal advice. Why is there a need to retain OTC and spot trading to be regulated under the Commodity Trading Act? MAS and IE met with the industry on several occasions to consult on the transitional measures, and released details on the proposed transitional arrangements in a consultation paper issued in November 2006. The intention was not, however, to impede legitimate dealing in OTC commodity derivatives and commodity spot broking. The public may seek advice from their lawyers or from CASE to ascertain if they have any legal recourse for monies owing to them. MAS to prescribe transitional regulations.

Hence, consumers are advised to invest with caution, especially for investment proposals with high risks involved. How does one apply for licences? Act to ascertain whether they need to apply for licences. If you wish to make a report, you can do so at any police station. If trading involves the use of public funds, traders must apply for a license. However, the Board may issue licenses for different validity periods in exceptional circumstances. MAS and IE had conducted a joint public consultation, which concluded on 15 January 2007. Can I appeal if my application is rejected?

We will continue to monitor market developments and ensure that our regulatory regime is kept relevant and effective. For this reason, MAS prescribed transitional regulations to facilitate the transfer of regulatory oversight of entities under the CTA to the SFA and FAA. Who needs to apply for the licences? How do consumers prevent themselves from falling prey to unlicensed commodity trading firms? What were the key amendments? MAS and IE have published responses to address the feedback provided by the public to the consultation. While the business conduct requirements in the SFA and CTA are broadly similar, there are differences in areas such as capital and financial requirements.

Thereafter, the decision by the Minister will be final. The transfer of regulatory oversight of commodity futures trading from IE Singapore to MAS took effect from 27 February 2008. Principal to principal traders in respect of physical trade. The Bill also makes a consequential amendment to the Income Tax Act to allow members of the Singapore Commodity Exchange and other prescribed exchanges to continue to qualify for tax incentives after the transfer. Application forms can be obtained from IE Singapore. As the current regime continues to serve its purpose, we do not propose any changes to the regulatory framework for OTC commodity derivatives and spot commodity contracts under the revised CTA. Investigations will be carried out and actions taken if the shops are found to be operating without a licence.

This is regardless of whether remuneration is on a commission basis, or otherwise. The licence will be issued by IE Singapore for a period of one year and this is renewable annually. Who enforces the Commodity Trading Act? After the transfer, commodity futures will be subject to the same regulatory framework as other types of futures contracts already regulated under the SFA and FAA. The Minister for Trade and Industry may add to or amend the Schedule when necessary. When did the latest amendmends take effect? Who is exempted from licensing?

Completed forms should be submitted to IE Singapore for processing. CTA will be regulated under the SFA and FAA. To this end, IE Singapore has granted exemptions from the licensing requirement to bona fide players operating in institutional markets. What is the validity period of the licence? This has to be done within one month after the notification of rejection. The consultation indicated generally positive support for the transfer of regulatory oversight of commodity futures to MAS. The transitional arrangements should provide sufficient time for the affected entities to institute the relevant systems and processes for compliance with the regulatory framework under the SFA and FAA. Which agency should a member of the public report to, if they suspect that certain business schemes are illegal under the Act? The trade and business community is advised to examine the Schedule carefully to check if they are exempted.

How do I know if a trading firm or broker has been licensed? Hardcopies of the Act may be purchased online at www. Board may, by notification in the Gazette, prescribe to be a commodity that the Minister may by notification in the Gazette, prescribe to be a commodity; but does not include any produce, item, goods or article that is the subject of a commodity futures contract and any index, right or interest in such a produce, item, goods or article. It introduces the various derivative products typically traded for commodities and describes how these models can be calibrated and used for pricing and risk management. The book includes practical descriptions of market conventions and quote codes used in commodity markets alongside typical products seen in broker quotes and used in calibration. There are also sections on the products encountered in commodities such as crack spread and spark spread options and alternative commodities such as carbon emissions, weather derivatives, bandwidth and telecommunications trading, plastics and freight. Commodity Option Pricing is ideal for anyone working in commodities or aiming to make the transition into the area, as well as academics needing to familiarize themselves with the industry conventions of the commodity markets.

Gold, silver and other precious metals are addressed, including gold forward and gold lease rates, as well as copper, aluminium and other base metals, crude oil and natural gas, refined energy and electricity. Also discussed are commodity models and their mathematical derivation and volatility surface modelling for traded commodity derivatives. The book has been developed with input from traders and examples using real world data, together with relevant up to date academic research. Guide covers commodity option pricing for quantitative analysts, traders or structurers in banks, hedge funds and commodity trading companies. September of 2006, but it was discontinued late the following year. Limited, which has established and currently manages 10 exchanges in India, Dubai, Singapore, Africa, Mauritius and Bahrain. Under the terms of the MoU, both parties will work together with a view to explore mechanisms to enhance market liquidity and system efficiencies within each exchange, including the joint development of new business opportunities.

It now hosts trading on a diversified basket of commodities including futures and options contracts on precious metals, base metals, agricultural commodities, energy, currencies and indices. The exchange and clearing house are expected to transition to the ICE trading and clearing platforms in the second half of 2014. The contract would enable a member to execute two simultaneous trades in two different maturity contracts of the same commodity, by entering a single order. ICE completes acquisition of Singapore Mercantile Exchange. SMX to Launch Commodities Trade Aug. New Exchange For a New Economic World Order, Global Financial Market Summit Announces The Singapore Mercantile Exchange. SMX appoints RBS as settlement bank.

SMX and the clearing house for SMX trades. SMX is competing for market share with the Singapore Exchange who also announced on August 31 that they would be introducing base metals futures contracts in a joint venture with the London Metal Exchange. This would allow a member to take two separate positions, one in the near month and the other in the far month, while only entering one order. McMahon had previously been president of the Hong Kong Mercantile Exchange. ICE Futures Singapore Launches with Commodity and FX Contracts Serving Asian Markets. SMX CEO identifies 34 futures contracts to launch. Middle East and India. SMX, the final approval needed to operate as a regulated and licensed exchange.

In August 2010, the exchange commenced trading of gold futures, West Texas Intermediate crude oil and eurodollar futures contracts on August 31. The acquisition marked the first time a western bourse has set up infrastructure in Singapore. On February 1, 2012, the Singapore Mercantile Exchange announced the introduction of a new spread contract based on copper. SMX had already signed Standard Chartered Bank and ICICI Bank to settlement bank partnership deals. Singapore And CBOT To Set Up Commodity Exchange. SMX Sets Date To Trade. New exchange for a new economic world order. Tokyo Commodity Exchange and Singapore Mercantile Exchange.

August 31, 2010 was shut down by ICE and relaunched as ICE Futures Singapore in November 2015, initially listing five products, crude oil, gasoil, gold and two Renmimbi futures. SGX and ICE signal hopes for closer ties. SMX Sign MOU for Cooperative Agreement to Advance Derivatives Trading Landscape in Asia. ICE Announces Management Appointments and Board for ICE Futures Singapore and ICE Clear Singapore. ICE Futures Singapore in 2013. SMX finalises preparations for January launch.

In April of 2009, SMX announced Thomas McMahon had been named SMX president. SMX will conduct conformance testing with settlement banks and other technology partners in advance of its scheduled launch date. Melamed Resigns From Post At New Singapore Exchange. SMX offers market participants clearing and settlement through its clearing house, the Singapore Mercantile Exchange Clearing Corporation. SMX to launch spread contracts on copper. Singapore Mercantile Exchange Pte Limited. Intercontinental Exchange to Acquire Singapore Mercantile Exchange; Broadens Exchange and Clearing Operations to Asian Markets and Customers.

Monetary Authority of Singapore grants final approval to Singapore Mercantile Exchange as Regulated and Licensed Commodity and Currency Derivatives Exchange from Singapore. The Singapore Government takes a firm stance against unlicensed commodity trading firms and individual traders, and illegal commodity trading activities. The public will also be able to check online whether the firm or individual that they are dealing with has been licensed before dealing with them in commodity trading activities. Singapore is the regulatory body responsible for administering the CTA. The scope under CTA was expanded to cover all commodities and all forms of commodities trading activities, including brokering or advisory functions in relation to trading in commodity futures contracts, commodity forward contracts, leveraged commodity trading, trading in differences and spot commodity trading. While the CTA provides a safeguard for the public, the public must also remain vigilant and be wary of fraudulent firms and individuals in commodity trading. The CTA now covers all commodities and regulates commodity trading activities, including commodity forward contracts, leveraged commodity trading, trading in differences and spot commodity trading etc. The CTA promotes bona fide trading as well as protect investors and the public against bucket shops. After the transfer, MAS will take over regulatory oversight of commodity derivative trading under the SFA, while IE Singapore will continue regulatory function for spot commodity trading under the CTA.

IE Singapore invites interested parties to give their views and comments on the two proposals contained in the consultation paper. The Response to the Consultation Paper on the Transfer of Regulatory Oversight of Commodity Derivatives from IE Singapore to MAS published in Feb 2012 is available here. IE Singapore proposes to maintain the objective of the CTA to protect the public. The Consultation Paper on Proposed Amendments to the IESBA is available here. We invite interested parties to forward their views and comments on the proposed amendments. Members of the public have submitted their responses to the February 2012 joint policy consultation and were generally supportive of the transfer. For more information about the CTA, please visit www. OTC derivatives, and second, greater clarity to industry participants on the regulatory approach towards commodity futures and other commodity derivatives.

This includes the licensing of persons engaged in broking or advisory functions in relation to trading in commodity forward contracts, leveraged commodity trading, trading in differences and spot commodity trading. Entities broking in commodity derivatives and entities operating markets or clearing facilities for commodity derivatives will come under the regulatory oversight of MAS as a result of the proposed transfer. This includes the regulation of commodity derivatives. US taxes, except for ADRs. ADRs in the US.