1 Introduction
This chapter establishes the market map: what the markets do, who participates, which institutions regulate or support them, and why authority must be checked activity by activity.
1.1 Introduction to this Guide
Section titled “1.1 Introduction to this Guide”The FMRP syllabus sets the conduct, control and market-practice expectations for wholesale financial-market activities in Singapore. It is a study aid, not a substitute for the legislation, MAS notices, contractual documents or the employer’s procedures.
1.2 Financial Markets Structure
Section titled “1.2 Financial Markets Structure”Financial markets connect providers and users of capital and liquidity. A dealer must understand both the product being traded and the institutional roles that make execution, risk transfer, settlement and supervision possible.
1.2.1 What Are Financial Markets?
Section titled “1.2.1 What Are Financial Markets?”Financial markets are organised or over-the-counter venues in which participants raise funding, invest, hedge exposures, manage liquidity and transfer risk. Prices are formed through orders, quotes, transactions and information, subject to applicable conduct rules.
1.2.2 Types of Financial Markets
Section titled “1.2.2 Types of Financial Markets”The covered markets are equity, debt, foreign-exchange, money-market, derivatives and government securities. The Blue Book focus — the syllabus scope — is wholesale FX, NDFs, money-market instruments, debt securities, SGS and OTC derivatives, rather than equity-market conduct generally.
1.3 Functions of Key Players and Institutions
Section titled “1.3 Functions of Key Players and Institutions”Each institution performs a different intermediation, risk-pooling, advisory, custody, trust or payment function. Correctly identifying a counterparty’s role determines the licensing, conduct and settlement controls that apply.
| Institution | Function | Key limit |\n|---|---|---|\n| Banks | deposits, payments, credit, market-making, liquidity | subject to banking supervision and any capital-markets licence or exemption |\n| Inter-Dealer Brokers (IDBs) | intermediate between participants, relay bids/offers, preserve anonymity, aid price discovery | must not take proprietary positions, misrepresent a quote, disclose a name early or impose their own dealing terms |\n| Finance companies | financing without being banks | permissions differ from a bank’s |\n| Insurance companies | pool policyholder risk, invest premiums | primary obligations arise from insurance, not banking |\n| Capital-markets intermediaries | execute, arrange or advise on securities/derivatives | must operate within the activities for which they are licensed or exempt |\n| Financial advisers | advise or arrange advice on investment products | advice must be suitable and free of misleading promotion or undisclosed conflicts |\n| Insurance brokers | intermediate between policyholders and insurers | distinct from an insurer and a securities dealer |\n| Trust companies | hold or administer property for beneficiaries | require segregation, documentation and attention to authority |\n| Money-changing and remittance | currency conversion and cross-border transfer | permissions and AML duties differ from a bank’s or CMS holder’s |\n\n### 1.4 Regulatory Bodies and Regulatory Framework in Singapore\n\nThe framework combines legislation, MAS rules and notices, professional codes, market conventions and internal controls. The applicable obligation depends on the activity, institution, product, customer and location of the conduct.\n\n#### 1.4.1 Central Banks and MAS\n\nMAS is Singapore’s central bank and financial regulator. It supervises monetary and financial stability, regulates relevant institutions and publishes notices, guidelines and directions supplementing primary legislation.\n\n#### 1.4.2 Types of Banking Licences issued by MAS\n\nSingapore banking licences include full-bank and other categories with different permissions and restrictions. Verify the institution’s actual status rather than assume that a bank, merchant bank or foreign bank can undertake every activity.\n\n#### 1.4.3 Registration and Licences for Regulated Activities\n\nA regulated activity may require a licence, registration, exemption or an activity-specific approval. The correct question is whether the person and institution are authorised for the particular service and product — not simply whether they are a financial institution.\n\n#### 1.4.4 CMS Licences\n\nA CMS licence authorises specified capital-markets services under the SFA, subject to conditions and conduct requirements. Merchant banks and other institutions should be assessed against the relevant licensing or exemption position for each activity.\n\n### 1.5 Professional Bodies\n\nProfessional bodies supplement formal regulation with shared standards, training and market conventions. Their materials do not displace legislation but help apply consistent wholesale-market practices.\n\n| Body | Role |\n|---|---|\n| SFEMC | develops and maintains the Singapore wholesale-market guide, addresses market-practice issues, can coordinate the market during disruption |\n| Codes of conduct | integrity, professionalism, fair dealing, confidentiality, execution, settlement and benchmark conduct |\n| ACI | professional standards and education for treasury and financial-market professionals |\n| ABS | represents banks, publishes industry guidance including rate-setting benchmark materials |\n| IBF | competency standards, accreditation and continuing professional development |
Exam cues
Section titled “Exam cues”- Check authority activity by activity: the correct question is whether the person and institution may do this service for this product.
- IDBs must not take proprietary positions, misrepresent quotes, disclose names early or impose their own terms.
- Blue Book scope: wholesale FX, NDFs, money-market instruments, debt securities, SGS and OTC derivatives — not equity-market conduct.
- Professional bodies (SFEMC, ACI, ABS, IBF) supplement but never displace legislation or MAS rules.
- Trap: holding a banking licence does not authorise every capital-markets activity.