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Commodity Trading Regulation Compliance

Note on Singapore’s Extraterritorial Commodity Licensing Regime

Potential commodity traders and their associates and agents should note that Singapore’s commodity licensing regime applies beyond our shores, and they should keep abreast of applicable laws and regulations. The penalty for conducting commodity trading without a required license can reach a fine of S$100,000 or imprisonment for a period of up to 3 years, as outlined in the Commodity Trading Act (“CTA”), the Securities and Futures Act (“SFA”) and a host of other statutes and regulations.

Evolving Regulatory Framework and Oversight Bodies

The regulatory framework for commodity trading is also constantly evolving, with the oversight of different commodity sets being changed between bodies such as the Monetary Authority of Singapore (“MAS”) and Enterprise Singapore (“E-SG”). Regulatory bodies themselves constantly evolve, with E-SG being formed in 2018 from International Enterprise Singapore (“IE”) and SPRING Singapore.

Importance of Legal Consultation Before Trading

With the regulatory landscape evolving at such a rate, one would be well served by investigating the relevant licensing applicable before engaging in commodity trading. Advomi’s network of lawyers can advise potential traders on the current applicable law and potential liabilities, before choosing to engage in commodity trading.

Licensing Assistance for Mandatory Requirements

Where you decide to engage in such trading, and find that it falls under a mandatory license, our panel of experienced lawyers can be engaged to advise you and assist you to complete the licensing applications. Such licenses include a Commodity Broker’s license, a Spot Commodity Broker’s license and a Commodity Futures Pool Operator’s license.

Advisory Services and Specific Licensing Types

Providing advisory services with regard to commodity trading may also require a Commodity Trading Advisor’s license. Each licensing purview is distinct, and our specialists can help you navigate if all or part of your proposed activity is covered or exempt from strict licensing requirements, and to liaise with regulatory bodies to obtain specific clarification during the application process.

Cross-Jurisdictional Legal Expertise

Our panel of experts includes lawyers from multiple jurisdictions in the Asia-Pacific region and beyond, which allows for appropriate legal advice for cross-jurisdictional commodity trades. Our network of contacts and working relationships with a number of international firms allows our legal experts and service-providers to present appropriate and comprehensive cross-jurisdictional regulatory advice.

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