The Securities and Futures Act is the statute that governs who may run a fund, deal in securities, or operate a market in Singapore, and it does so by licensing the activity rather than the entity. This FAQ walks through what each major part of the Act actually requires, in plain language, for directors and counsel who need the practical answer, not the full 340-section text.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
What the Securities and Futures Act actually does
The Securities and Futures Act 2001 (the “SFA”) is Singapore’s primary capital markets statute, administered by the Monetary Authority of Singapore. It regulates organised markets and exchanges, clearing facilities, capital markets services licence holders and their representatives, offers of securities and collective investment schemes, market conduct (including insider trading and market manipulation), and the investor compensation scheme. If your business touches fund management, dealing in securities, providing financial advice on capital markets products, or operating any kind of trading venue, the SFA is almost certainly the statute that decides whether you need a licence before you start.
Company secretaries and directors typically encounter the SFA in three situations: setting up a fund management company, structuring a Variable Capital Company that will itself hold a capital markets services licence or engage a licensed manager, and responding to MAS correspondence that cites a specific SFA section.
Structurally, the Act runs across fifteen parts, from organised markets and clearing facilities, through the licensing of capital markets services holders and their representatives, books and customer assets, conduct of business, financial benchmarks, disclosure of interests, market conduct, offers of investments, appeals, and a final set of miscellaneous and enforcement provisions. Most compliance questions a director or company secretary actually asks sit in Part 4 (Holders of Capital Markets Services Licence and Representatives) and Part 12 (Market Conduct), which is why this FAQ concentrates on those two parts rather than treating the whole 340-section Act as equally relevant to every reader.
It is also worth being explicit about what sits outside the SFA. Financial advisory licensing for life policies and related products is a separate regime under the Financial Advisers Act 2001, even though the two Acts overlap for certain investment products. Banking licensing sits under the Banking Act 1970, and insurance licensing under the Insurance Act 1966. Getting the right statute for the right activity is often the first and most consequential decision in any licensing analysis.
Who these SFA chapter explainers are for
This guide is written for directors, compliance officers and company secretaries of Singapore entities engaged in fund management, corporate finance advisory, dealing in capital markets products, or the operation of a market or clearing facility. It is not a substitute for a formal SFA licensing application or a MAS-facing compliance review; those should go through your licensed compliance function or your law firm. For the primary source text, go to Singapore Statutes Online.
It is equally relevant to a founding team setting up a boutique fund manager for the first time and trying to work out, before they engage a compliance consultant, roughly which licence category they are heading towards, and to an established licence holder’s board that wants a plain-English refresher on what its ongoing obligations actually are, rather than relying on institutional memory of what a previous compliance officer once explained verbally.
Eligibility and requirements: the licensing threshold
The core rule sits in Part 4 of the Act. Under section 82, no person may carry on business in any regulated activity, or hold out that they do so, unless they hold a capital markets services (CMS) licence for that activity, subject to the exemptions in section 99. “Regulated activities” include fund management, dealing in capital markets products, providing custodial services for capital markets products, and advising on corporate finance, among others set out in the Second Schedule to the Act.
Section 99 then carves out a defined list of exempt persons, including banks and merchant banks licensed under the Banking Act 1970, and certain insurers licensed under the Insurance Act 1966, in each case only for the regulated activities the exemption specifically covers. Everyone else needs either a CMS licence or a specific MAS-granted exemption before they start the activity, not after.
CMS licences themselves are further divided by regulated activity, so a firm carrying on both fund management and dealing in capital markets products typically needs its licence to cover both categories explicitly, rather than assuming one licence category implicitly authorises the other. MAS also imposes minimum base capital and financial resource requirements that vary by regulated activity and by whether the licence holder deals with retail or only accredited and institutional investors, which is one of the first things a licensing application has to establish clearly.
Cost and timeline: the numbers that matter
- Carrying on a regulated activity without a CMS licence or applicable exemption: a fine not exceeding S$150,000, or imprisonment not exceeding 3 years, or both, and a further fine not exceeding S$15,000 for every day the offence continues after conviction (section 82(3)).
- Contravening a condition or restriction imposed on an exempt person: a fine not exceeding S$50,000, plus a further fine not exceeding S$5,000 per day for a continuing offence (section 99(5)).
- Appeal window against an MAS decision to withdraw an exemption under section 99: 30 days from notification (section 99(9)).
- Investor compensation (fidelity) fund minimum balance under Part 11 of the Act: S$20 million (section 181).
- Appeal window against certain MAS licensing decisions: an appeal lies to the Minister under Part 14 of the Act, subject to the specific procedural requirements in force at the time.
None of these figures should be treated as a ceiling on commercial risk. Beyond the statutory fine bands, a licence holder found in breach also faces the practical consequences of a MAS reprimand, licence conditions, or suspension or revocation of its licence under section 95, each of which can be more commercially damaging over time than the underlying fine itself.
These figures are current as at 13 September 2026. SFA penalty amounts and licence categories are periodically revised; verify the in-force figure against sso.agc.gov.sg before quoting it in client-facing material.
How SFA licensing and compliance works, step by step
- Identify the regulated activity. Map your actual business (fund management, dealing, advising, custody) against the Second Schedule categories.
- Check for an available exemption. Confirm whether section 99, or a specific MAS class exemption (such as the licensing exemption regime for single family offices), removes the need for a full CMS licence.
- Apply for a CMS licence if required. This is a substantive MAS application covering fitness and propriety of directors and representatives, minimum financial requirements, and a business plan.
- Appoint and register representatives. Under Part 4 Division 2, individuals conducting the regulated activity on the licence holder’s behalf must be registered as appointed, provisional or temporary representatives.
- Maintain books and undergo audit. Part 5 imposes ongoing bookkeeping, customer asset segregation and audit obligations on licence holders.
- Observe market conduct rules. Part 12 prohibits market manipulation, false trading and insider trading, with both criminal and civil liability tracks.
- Monitor for changes affecting your licence category. A change in shareholding, business line, or client base (retail versus accredited investor only) can shift which conditions attach to an existing licence, or whether an exemption relied on previously still applies; this should be reviewed at least annually, not only when a problem surfaces.
Throughout this cycle, the entity’s company secretarial obligations under the Companies Act 1967 continue to run on their own timetable. A CMS licence application does not pause or extend the annual return deadline, and MAS licensing status is not, by itself, evidence of good standing for ACRA purposes; the two regulators assess different things.
Common mistakes and gotchas
- Assuming an activity is “advisory” rather than a licensable regulated activity because no client money changes hands; several advisory and arranging functions are captured regardless.
- Relying on an exemption that was correct for a prior structure but no longer fits after a change in shareholding, business line or client base.
- Treating the CMS licence as a one-off exercise rather than an ongoing compliance obligation with periodic reporting, notification and fee requirements under sections 93 to 96.
- Overlooking that market conduct offences under Part 12, including insider trading, attach personal criminal liability to individuals, not just the corporate licence holder.
- Confusing SFA licensing (dealing in and advising on capital markets products) with Financial Advisers Act licensing (advising on life policies and other specified investment products); the two regimes overlap for some product types but are separate licences.
- Assuming a section reference quoted in older correspondence or an outdated summary still matches the current text. The SFA is amended frequently; a subsection reference from a 2020 memo may have been renumbered or superseded by 2026.
For the fintech and governance angle on capital markets compliance, see our sister site’s guide on the MAS FSTI 4.0 Singapore fintech grant governance and compliance guide.
How the SFA interacts with related regimes
Few licensed entities deal with the SFA in isolation. A Variable Capital Company that engages a licensed fund manager will need that manager to hold a CMS licence (or a valid exemption) under the SFA, while the VCC itself is separately constituted and administered under the Variable Capital Companies Act 2018. A single family office structure commonly relies on a specific MAS class exemption from CMS licensing for managing the family’s own money, but the precise conditions of that exemption, including the notification regime that took effect on 15 June 2026, need to be checked against the current MAS guidance, not assumed from an earlier version of the framework. Corporate secretarial obligations under the Companies Act 1967, such as director and secretary appointments, run in parallel and do not substitute for SFA licensing obligations; a CMS licence holder still needs a compliant company secretary and still has to lodge its annual return on time, quite separately from anything MAS requires of it.
FAQs
What does the Securities and Futures Act actually regulate?
It regulates organised markets, clearing facilities, capital markets services licence holders and representatives, offers of securities and collective investment schemes, market conduct such as insider trading, and the investor compensation scheme, all under the supervision of the Monetary Authority of Singapore.
Do I need a capital markets services licence to manage a fund in Singapore?
In most cases, yes, unless a specific exemption under section 99 or a MAS class exemption (such as the single family office licensing exemption) applies to your structure. Fund management is a regulated activity under the Second Schedule to the Act.
What is the penalty for carrying on a regulated activity without a licence?
A fine not exceeding S$150,000, imprisonment not exceeding 3 years, or both, under section 82(3), with an additional daily fine of up to S$15,000 for a continuing offence.
Are banks exempt from needing a CMS licence?
Banks and merchant banks licensed under the Banking Act 1970 are exempt for the regulated activities covered by section 99(1)(a) and (b), but only for those activities and subject to any conditions MAS imposes.
What happens if I contravene a condition attached to my exemption?
Under section 99(5), a person who contravenes a condition or restriction imposed on their exemption faces a fine not exceeding S$50,000, with a further fine of up to S$5,000 per day for a continuing offence, and MAS may also withdraw the exemption entirely under section 99(6).
Where can I read the current text of the SFA?
The authoritative, continuously updated version is on Singapore Statutes Online. Cross-check any specific requirement against MAS’s own guidance at mas.gov.sg before acting on it.
Does the SFA apply to a Variable Capital Company?
The VCC itself is constituted under the Variable Capital Companies Act 2018, but any manager it engages to carry on fund management typically needs a CMS licence, or a valid exemption, under the SFA. The two statutes work together rather than one substituting for the other.
Related guides
For MAS’s most recent overhaul of fund manager licensing categories, see our companion article on the MAS streamlined fund manager framework 2026: frequently asked questions. If your compliance question touches a specialist hire rather than a licensing structure, our associated employment agency has a guide on Employment Pass considerations for a foreign land surveyor in Singapore. For company registration matters that sit alongside SFA licensing, see acra.gov.sg.
Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.