2B.1 The capital markets industry and derivatives participants
The derivatives-specific market map. RES 1B covers MAS, SGX, SGX-ST, CDP, SGX-DT and SGX-DC; RES 2B adds the derivatives venues and clearing houses. The examination tests who may trade or clear derivatives and under which rules.
1.1 Introduction
Section titled “1.1 Introduction”The primary market raises capital through shares, bonds/fixed-income securities and company warrants. The secondary market lets investors transfer risk and manage positions. Futures, options, warrants and leverage certificates are derivatives. OTC markets are decentralised and negotiated; exchanges centralise orders and provide price/quantity discovery. Trading requires exchange membership or a Trading Member relationship.
1.2 Institutional participants
Section titled “1.2 Institutional participants”Banks, CMS broker/dealers and fund managers participate in derivatives markets. Broker/dealers do not take deposits; they match or route orders and may be Trading or Clearing Members. Fund managers run segregated mandates and collective schemes across bonds, equities and derivatives.
Remote overseas trading/clearing members may be exempt if they are foreign-incorporated, members of the relevant venue, do not serve Singapore residents, are not Singapore-regulated financial institutions, are supervised at home and have a suitable MAS information-sharing arrangement. A remote SGX clearing member also cannot have a MAS-regulated financial-institution affiliate.
1.3 Regulatory bodies and rule sources
Section titled “1.3 Regulatory bodies and rule sources”The objectives and roles of MAS, SGX, SGX RegCo, SGX-ST, CDP, SGX-DT and SGX-DC are as for RES 1B. RES 2B adds:
| Body | Role |
|---|---|
| IFSG | approved derivatives exchange under the SFA; IFSG Rules govern members |
| ICE Clear Singapore | approved clearing house and CCP for IFSG futures; ICE Clear Rules govern members |
| APEX | approved international derivatives exchange for commodity and financial futures/options — agriculture, energy, metals and RMB-related products |
| APEX Clear | approved clearing house/CCP for APEX products |
The rule sources are SFA/SFR, SGX-ST Mainboard/Catalist and Trading Rules, CDP Clearing/DVP/Depository Rules, SGX-DT Futures Trading Rules, SGX-DC Clearing Rules, IFSG Trading Rules and Procedures, ICE Clear Singapore Rules and Procedures, and APEX/APEX Clear Rules and Procedures.
Exam cues
Section titled “Exam cues”- Who may clear: IFSG futures clear through ICE Clear Singapore; APEX products through APEX Clear; SGX-DT and eligible OTC through SGX-DC.
- Remote member exemption: foreign-incorporated, member of the venue, no Singapore residents served, home-supervised, with an MAS information-sharing arrangement. A remote clearing member also cannot have a MAS-regulated affiliate.
- Everything in RES 1B Chapter 1 (MAS, SGX, SGX-ST, CDP, SGX-DT, SGX-DC, SGX RegCo) also applies here.
- Trap: broker/dealers do not take deposits — that is a bank activity, not a CMS dealing activity.