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Commodity Trading

Overview


Any person conducting business activities involving “spot commodity trading” should ensure that his/her intended business activities are in compliance with the Commodity Trading Act (CTA) and all applicable legal and regulatory requirements in Singapore.


Business activities involving “spot commodity trading” is regulated under the CTA to promote a fair and transparent commodity trading environment in Singapore. Any person conducting business activities involving “spot commodity trading” is subject to licensing under the CTA unless specifically exempted.


Commodities covered under “spot commodity trading”


Specifically for “spot commodity trading”, “commodity” means any produce, item, goods or article that is the subject of any “spot commodity trading”, and includes an index, a right or an interest in such 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 produce, item, goods or article.


Regulated business activities involving “spot commodity trading”


Any person who is a “spot commodity broker”, “spot commodity broker’s representative”, “spot commodity pool operator” or “spot commodity pool operator’s representative” is subject to licensing under the CTA.


“Spot commodity trading” is defined as the purchase or sale of a commodity at its current market or spot price, where it is intended that such transaction results in the physical delivery of the commodity. The licences covering “spot commodity trading” include licences for “spot commodity broker”, “spot commodity broker’s representative”, “spot commodity pool operator” and “spot commodity pool operator’s representative”.


Regulatory Body

The Enterprise Singapore Board (Enterprise Singapore) is the regulatory body responsible for administering the CTA.


Regulatory oversight of “commodity futures contracts” is administered by the Monetary Authority of Singapore (MAS).


Entities whose business activities involve “commodity contracts” (also known as “over-the-counter or OTC commodity derivatives”) come under the regulatory oversight of the MAS.


Licensing exemptions for business activities involving “spot commodity trading”


The following persons are exempted from licensing:


a. a person who carries on spot commodity trading on the person’s own account and does not solicit any funds from any member of the public or any section of the public in connection with the carrying out of any spot commodity trading; and


b. a person who solicits or accepts orders for the purchase or sale of any commodity by way of spot commodity trading for a customer in the following circumstances:


  1. the person is not a party to any contract for the purchase or sale of the commodity;

  2. the person does not carry the customer’s position, margin or account in the person’s own books; and

  3. the person does not accept money or assets from the customer as settlement of, or a margin for, or to guarantee or secure any contract for any contract for the purchase or sale of any commodity.


Unlicensed and illegal business activities involving “spot commodity trading” may result in an offence.


Fees payable for licences


Licence fees are as follows for “spot commodity trading”:

Application for or renewal of a licence as a “spot commodity broker” or “spot commodity pool operator” - S$1,200.00 per annum.

Application for or renewal of a licence as a “spot commodity broker’s representative” or “spot commodity pool operator’s representative” - S$100.00 per annum.


Validity period of licence


Licences are valid for a period of one year and are renewable annually. However, licenses for different validity periods may be issued in exceptional circumstances.


Licence application query


For licensing enquiries and new licence applications (for “spot commodity broker”, “spot commodity broker’s representative”, “spot commodity pool operator”, and/or “spot commodity pool operator’s representative”), please contact us.




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