Why is MAS regulation for brokers important?

Why is MAS regulation for brokers important?

The Securities and Futures Act (SFA) covers financial market operators including brokers for leveraged forex trading in Singapore. It ensures the proper functioning of the market. For individuals, the immediate concern is the protection of own trading and investing capital.

MAS regulated brokers for leveraged forex trading

Updated 17 January 2017, MAS webpage for financial institutions. There are seven new players. Total number of forex brokers with Capital Markets Services license from Monetary Authority of Singapore now 29.

1. BLACKROCK (SINGAPORE) LIMITED
2. CIMB SECURITIES (SINGAPORE) PTE. LTD.
3. CITIGROUP GLOBAL MARKETS SINGAPORE PTE. LTD.
4. CMC MARKETS SINGAPORE PTE LTD
5. EATON VANCE MANAGEMENT INTERNATIONAL (ASIA) PTE. LTD.
6. FIRST STATE INVESTMENTS (SINGAPORE)
7. GAIN CAPITAL SINGAPORE PTE. LTD.
8. GMO SINGAPORE PTE. LIMITED
9. GOLDMAN SACHS (SINGAPORE) PTE.
10. G.K. GOH FINANCIAL SERVICES (S) PTE. LTD.
11. IG ASIA PTE LTD
12. KGI FUTURES (SINGAPORE) PTE. LTD.
13. MAYBANK KIM ENG SECURITIES PTE. LTD.
14. MERRILL LYNCH (SINGAPORE) PTE. LTD.
15. MF GLOBAL SINGAPORE PTE LIMITED (IN CREDITORS’ VOLUNTARY LIQUIDATION)
16. MILLENNIUM CAPITAL MANAGEMENT (SINGAPORE) PTE. LTD.
17. MORGAN STANLEY ASIA (SINGAPORE) PTE.
18. OANDA Asia Pacific Pte. Ltd.
19. OCBC SECURITIES PRIVATE LIMITED
20. PHILLIP FUTURES PTE LTD
21. PICTET ASSET MANAGEMENT (SINGAPORE) PTE LTD
22. RWC SINGAPORE (PTE.) LIMITED
23. SAXO CAPITAL MARKETS PTE. LTD.
24. SG SECURITIES (SINGAPORE) PTE. LTD.
25. SYSTEMATICA INVESTMENTS SINGAPORE PTE. LTD.
26. UOB BULLION AND FUTURES LIMITED
27. UOB KAY HIAN PRIVATE LIMITED
28. WORLDQUANT (SINGAPORE) PTE. LTD.
29. WUBS FINANCIAL SERVICES (SINGAPORE) PTE. LTD.

Changes from last update in 09 January 2015

There is quite a number of changes since our own last update back in 09 January 2015. MAS updates this information yearly.

1. Overall the number of players with CMS license for Leveraged Foreign Exchange Trading increased from 24 to 29.

2. New names are:

• EATON VANCE MANAGEMENT INTERNATIONAL (ASIA) PTE. LTD.
• GMO SINGAPORE PTE. LIMITED
• MILLENNIUM CAPITAL MANAGEMENT (SINGAPORE) PTE. LTD.
• RWC SINGAPORE (PTE.) LIMITED
• SG SECURITIES (SINGAPORE) PTE. LTD.
• SYSTEMATICA INVESTMENTS SINGAPORE PTE. LTD.
• WORLDQUANT (SINGAPORE) PTE. LTD.

3. Gain Capital Singapore replaced City Index Asia. Gain Capital acquired City Index back in November 2014 so in fact should be updated by January 2015.

4. KGI FUTURES SINGAPORE PTE. LTD. replaced KGI ONG CAPITAL PTE. LTD.

5. CUSTOM HOUSE CURRENCY EXCHANGE (SINGAPORE) PTE. LIMITED and GFT GLOBAL MARKETS ASIA PTE LTD were dropped.

Key information of each broker

Alternatively, you can visit MAS webpage for financial institutions directly.

If you follow the links, you will arrive at a page for each broker listing its licensed activities and critical information. In this example for IG Markets, an established broker in Singapore.

Under the Act, operators must apply for a CMS license

CMS licensed brokers must comply with many things. Some important points are listed here:

1. Approval of key personnel including the CEO and director(s)
2. Proper qualification and registration of trading representatives
3. Proper book keeping
4. Proper handling of customer assets (no co-mingling, held in separate accounts)
5. Proper reporting and auditing
6. Proper disclosure and no conflict of interest
7. A system of enforcement and penalties

Beware forex fraud, message from central banks

Monetary Authority of Singapore (MAS)

“Consumers are strongly encouraged to deal only with persons that are regulated by MAS. MAS’ regulatory regime aims at safeguarding the interests of consumers by ensuring that only competent and professional persons may provide financial services. If a consumer chooses to deal with persons that are not regulated by MAS, he forgoes the protection afforded under laws administered by MAS, particularly if these persons are based overseas.” Consumer alert on the pitfalls of dealing with unregulated persons

Bank Negara Malaysia

“Bank Negara Malaysia would like to caution members of the public not to participate in any illegal investment or training programme on foreign currency trading offered by individuals or companies both domestic and foreign.” Under the Exchange Control Act 1953 (ECA), it is an offence for a person in Malaysia to buy or sell foreign currency

Members of the public are usually enticed to attend such investment or training programmes with promises of quick and good returns. The modus operandi of such programmes have included:
Offering free training, seminars or workshops to lure investors…
Recruitment of fresh graduates as marketing executives and encouraging them to get their family and friends to trade…
Requiring investors to deposit an amount of money into a bank account to begin trading foreign currency, and subsequently, requesting for a top up on their initial investment…

Forex Scam: Fraudulent setup claiming to be regulated broker One of the best advice comes from Bank Negara Malaysia. In fact our very own encounter documented here tells us that Bank Negara understands the type of monkey business going on.. Read ‘Forex Scam: Fraudulent setup claiming to be regulated broker‘ or listen to the audio below.
A forex scam that could happen to stocks, futures and commodities as well

Reserve Bank of India (RBI)

“It has been observed that overseas foreign exchange trading has been introduced on a number of internet /electronic trading portals luring the residents with offers of guaranteed high returns based on such forex trading…any person resident in India collecting and effecting / remitting such payments directly /indirectly outside India would make himself/ herself liable to be proceeded against with for contravention of the Foreign Exchange Management Act (FEMA), 1999.”Overseas forex trading through electronic / internet trading portals. Circular No. 46

US Commodities Futures Trading Commission

“The Forex market is volatile and carries substantial risks. It is not the place to put any money that you cannot afford to lose, such as retirement funds, as you can lose most or all it very quickly. The CFTC has witnessed a sharp rise in Forex trading scams in recent years and wants to advise you on how to identify potential fraud.” CFTC fraud advisories

MAS-regulated brokers for leveraged forex trading in Singapore

(Why is Singapore a good place to trade forex?)

The number of Capital Markets Services (CMS) licensees for Leveraged Foreign Exchange Trading or regulated brokers in short are growing in Singapore. This is probably in line with the adoption of leveraged forex trading by individual investors and speculators.

Year	2006	2007	2008	2009	2010	2011*	2012#	2013!	2014¹	2016²
Number	13	14	18	19	19	19	23	24	24	29

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 Financial Directory

Number of Financial Institutions and Relevant Organisations in Singapore (Last updated as at 07 Feb 2017 )

All Institutions (alphabetical order)

Type of Institution Number of Institutions Commercial Banks 126 Local Banks 5 Foreign Banks 121 Foreign Full Banks 29 Wholesale Banks 55 Offshore Banks 37 Financial Holding Companies 4 Merchant Banks 31 Representative Offices of Banks 41 Institutions with Asian Currency Units 154 Money Changers 386 Remittances 81 Finance Companies 3 Money Brokers 12 Singapore Government Securities Market - Primary Dealers 13 Singapore Government Securities Market - Secondary Dealers 16 Approved Holding Companies 4 Approved Exchanges 3 Approved Clearing Houses 4 Recognised Clearing Houses 2 Licensed Trade Repositories 1 Licensed Foreign Trade Repositories 0 Recognised Market Operators 32 Holders of Capital Markets Services Licence 576 Dealing in Securities 147 Securities Members 26 Non-Member Companies of SGX-ST 121 Trading in Futures Contracts 71 Derivatives Clearing Members 19 Derivatives Trading Members 6 Non-Member Companies of SGX-DT 46 Leveraged Foreign Exchange Trading 29 Advising on Corporate Finance 46 Fund Management 400 Securities Financing 19 Providing Custodial Services for Securities 40 Real Estate Investment Trust Management 38 Providing Credit Rating Services 4 Holders of Financial Adviser's Licence 63 Advising others, either directly or through publications or writings, and whether in electronic, print or other form, concerning the following investment products, other than - (i) in the manner specified in paragraph 2 of the Second Schedule to the Financial Advisers Act (Cap. 110); or (ii) advising on corporate finance within the meaning of the Securities and Futures Act (Cap. 289) 58 Futures contracts 1 Contracts or arrangements for the purposes of foreign exchange trading 1 Contracts or arrangements for the purposes of leveraged foreign exchange trading 1 Life policies 51 Securities other than collective investment schemes 29 Collective investment schemes 47 Structured deposits 5 Advising others by issuing or promulgating research analyses or research reports, whether in electronic, print or other form, concerning the following investment products 40 Futures contracts 2 Contracts or arrangements for the purposes of foreign exchange trading 2 Contracts or arrangements for the purposes of leveraged foreign exchange trading 2 Life policies 26 Securities other than collective investment schemes 30 Collective investment schemes 36 Structured deposits 3 Marketing of any collective investment scheme 42 Arranging of any contract of insurance in respect of life policies 51 Registered Fund Management Companies 269 Exempt Financial Advisers 480 Persons exempted from the requirement to hold a Capital Markets Services licence under Section 99(1)(a),(b),(c) and (d) 116 Exempt Financial Advisers - Companies providing financial advisory services to not more than 30 accredited investors 51 Exempt Corporate Finance Advisers - Companies advising on corporate finance to only accredited investors 79 Holders of Trust Business Licence 58 Exempt Persons Carrying on Trust Business 35 Banks 23 Merchant Banks 8 Advocates and Solicitors 4 Licensed Insurers 182 Direct Insurers 80 Life Insurers 17 Including Life Insurers with defined market segments 6 General Insurers 56 Including General Insurers with defined business lines 13 Composite Insurers 7 Reinsurers 31 Life Reinsurers 3 General Reinsurers 20 Composite Reinsurers 8 Captive Insurers 71 Authorised Reinsurers 4 Life Reinsurers 0 General Reinsurers 3 Composite Reinsurers 1 Lloyd's Asia Scheme 28* Representative Offices of Insurers and Reinsurers 1 Insurance Brokers 77 Direct Insurance Brokers 43 General Reinsurance Brokers 12 Life Reinsurance Brokers 0 Direct and General Reinsurance Brokers 21 General Reinsurance and Life Reinsurance Brokers 1 Insurance Brokers Licensed To Place Business With Lloyd's 6 Exempt Insurance Brokers Carrying on Business as Direct Insurance Brokers 31 Approved CIS Trustees 13 Other Relevant Organisations 17

* No. of Lloyd’s syndicates and 1 Administrator

Last updated on 07 Feb, 2017

Ref:http://www.terraseeds.com/blog/mas-regulated-forex-brokers-singapore/