The Commodity Trading Sector in Singapore
Singapore hosts approximately 300 global trading companies, operating under the International Enterprise Global Traders Program, which includes some of the world’s largest commodity groups. Its strategic geographical position and connectivity to around 600 ports in 120 countries make Singapore an ideal hub for commodity trading. Over recent years, the sector has seen significant growth, establishing Singapore as a leading producer and consumer of commodities globally.
The Singapore Commodity Trading Act
Commodity trading in Singapore is governed by stringent regulations under the Singapore Commodity Trading Act (CTA), established in 1992. Companies and residents involved in commodity trading must adhere to legislation covering commodity derivatives and clearing facilities for these derivatives as outlined by the CTA. The Act encompasses all commodities, except those regulated by the Securities and Futures Act (SFA). The term “commodity” includes:
- Commodity forward contracts,
- Leveraged commodity trading,
- Contracts arising from trading in differences,
- Spot commodity trading.
For detailed information on recent amendments to the Commodity Trading Act, consulting specialists in company incorporation in Singapore is recommended.
Types of Commodity Trading Licenses in Singapore
The Commodity Trading Act specifies the conditions under which companies or individuals in Singapore must obtain a commodity trading license. Section 14A of the Act also outlines exempt categories for residents and companies offering broking or advisory services. The types of commodity trading licenses in Singapore include:
- Commodity Broker’s License (CB License),
- Spot Commodity Broker’s License (SCB License),
- Commodity Trading Adviser’s License (CTA License),
- Commodity Futures Pool Operator’s License (CFPO License),
- Commodity Pool Operator’s License (CPO License),
- Spot Commodity Pool Operator’s License (SCPO License).
Licensed banks and approved merchant banks in Singapore, covered under Section 14A of the CTA, are not required to obtain commodity trading licenses.
Licensing of Commodity Trading Companies in Singapore
To secure a commodity trading license in Singapore, applicants must provide:
- A specific application form,
- A statement of the applicant’s assets and liabilities,
- For Singapore companies, the most recent financial statement, profit and loss account, and an auditor’s report.
The commodity trading license, issued by International Enterprise Singapore, is valid for one year.
For comprehensive guidance on licensing requirements for commodity trading companies, contact us today for a non-obligatory discussion.