Commodity Trading Act 1992

Commodity Trading Act 1992 2020 REVISED EDITION This revised edition incorporates all amendments up to and including 1 December 2021 and comes into operation on 31 December 2021 An Act for the regulation of certain types of commodity trading, and for matters connected therewith. [35/2007] [27 May 1992] PART 1 PRELIMINARY Short title 1. This Act is the Commodity Trading Act 1992. [22/2001] Interpretation 2. In this Act, unless the context otherwise requires — “auditor” means a public accountant within the meaning of the Companies Act 1967; “Board” means the Enterprise Singapore Board established by section 3 of the Enterprise Singapore Board Act 2018; “business rules”, in relation to a body corporate that maintains or proposes to maintain a commodity market, means the rules, regulations and by-laws, by whatever name called, governing the activities and conduct of — (a) the body corporate and its members; (b) its clearing house; and (c) other persons in relation to the commodity market, whether those rules, regulations or by-laws are made by the body corporate or are contained in the Memorandum and Articles of Association of the body corporate or altered or supplemented by the Board; “clearing house”, in relation to a commodity market, means a body corporate that — (a) clears and settles commodity contracts; and (b) makes adjustments to the contractual obligations arising out of those commodity contracts; “commodity” means any produce, item, goods or article that is the subject of any — (a) commodity forward contract; (b) leveraged commodity trading; (c) contract made pursuant to trading in differences; or (d) spot commodity trading, and includes an index, a right or an interest in such commodity, and such other index, right or interest of any nature as the Board may, by notification in the Gazette, prescribe to be a commodity; but does not include any produce, item, goods or article that is the subject of a commodity futures contract and any index, right or interest in such produce, item, goods or article; “commodity broker” means a person who (whether as principal or agent) carries on the business of soliciting, or accepting orders, for the purchase or sale of any commodity by way of or relating to any commodity contract, whether or not the business is part of, or is carried on in conjunction with, any other business; “commodity broker’s representative” means a person who acts for, or by arrangement with, a commodity broker (other than a person who is a director of a corporation holding a commodity broker’s licence or is a person who is in the direct employment of a commodity broker) and who performs any of the functions of that commodity broker in connection with trading in commodity forward contracts, or in any leveraged commodity trading, whether the person’s remuneration is by way of commission or otherwise; “commodity contract” means — (a) a commodity forward contract; (b) any contract made pursuant to trading in differences with respect to a commodity, not being a commodity futures contract; or (c) any contract made pursuant to a transaction in leveraged commodity trading; “commodity forward contract” means a contract the effect of which is that one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time, but does not include a commodity futures contract; “commodity futures contract” means — (a) a contract the effect of which is that — (i) one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time pursuant to the terms and conditions set out in the business rules of a futures market or pursuant to the business practices of a futures market; or (ii) the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity agreed at the time of the making of the contract and at a specified future time, such difference being determined in accordance with the business rules or practices of the futures market at which the contract is made; or (b) such other contract or class of contracts as the Board may prescribe, and includes a futures option transaction; “commodity market” means — (a) a market, whether in Singapore or elsewhere, at which commodity contracts are regularly made; or (b) an electronic system, whether operating in Singapore or elsewhere, through which trading in commodity contracts is carried out, but excludes an electronic facility which merely provides price or other information relating to commodity contracts (whether that facility is part of or carried on in conjunction with the provision of any other information not related to commodity contracts) and which does not permit users of the facility to channel orders for, execute transactions in, or make markets in, commodity contracts; “commodity pool operator” means any person who carries on a business in the nature of a collective investment scheme within the meaning of section 2 of the Securities and Futures Act 2001 and who, in connection therewith, accepts or receives from other persons funds, security or property, either directly or through capital contributions, the sale of shares or other forms of security or otherwise for the purpose of trading in commodity contracts but does not include any person that the Board may prescribe; “commodity pool operator’s representative” means a person in the direct employment of, or acting for, or by arrangement with, a commodity pool operator, who performs for that commodity pool operator any of the functions of a commodity pool operator; “commodity trading adviser” means any person who — (a) carries on the business of advising others (directly or indirectly, through publications or writings, or by whatever means or media) on the making of commodity contracts, including the advisability of trading in any commodity contract made or to be made on, or subject to the business rules of, a commodity market; (b) as part of a regular business, issues or promulgates analyses or reports concerning the making of commodity contracts; or (c) pursuant to a contract or an arrangement with a customer or other person, undertakes on behalf of that customer or other person (whether on a discretionary authority or otherwise granted by the customer or other person) to make any commodity contract for the purposes of managing the client’s funds, but does not include — (i) a bank or merchant bank licensed under the Banking Act 1970; (ii) a commodity broker, commodity broker’s representative, commodity pool operator or commodity pool operator’s representative; (iii) a person who carries on the business of printing or publishing a newspaper and is the holder of a permit issued under the Newspaper and Printing Presses Act 1974 where — (A) insofar as the newspaper is distributed generally to the public it is distributed only to subscribers to, and purchasers of, the newspaper for value; (B) the advice is given or the analyses or reports are issued or promulgated only through that newspaper; and (C) that person receives no commission or other consideration for giving the advice or for issuing or promulgating the analyses or reports; and (iv) any other person that the Board may prescribe, if and only if the carrying on of the business by the abovementioned persons is solely incidental to the carrying on of their business; “commodity trading adviser’s representative” means — (a) a person in the direct employment of, or acting for, or by arrangement with, a commodity trading adviser, who performs for that commodity trading adviser any of the functions of a commodity trading adviser (other than work ordinarily performed by accountants, clerks or cashiers) whether his or her remuneration is by way of salary, wages, commission or otherwise; and (b) where the commodity trading adviser is a corporation, includes any director, member or officer of the corporation who is not the holder of a commodity trading adviser’s licence and who performs for that corporation any of the functions of a commodity trading adviser (whether or not his or her remuneration is by way of salary, wages, commission or otherwise); “corporation” has the meaning given by the Companies Act 1967; “customer” means a person on whose account a commodity broker carries on trading in commodity contracts; “director” has the meaning given by the Companies Act 1967; “financial year” has the meaning given by the Companies Act 1967; “futures market” and “futures option transaction” have the meanings given to those expressions in the Securities and Futures Act 2001; “leveraged commodity trading” means — (a) the act of entering into or offering to enter into, or inducing or attempting to induce a person to enter into or offer to enter into, a contract or an arrangement on a margin basis (other than a commodity futures contract) whereby a person undertakes as determined by the terms and conditions of the contract or arrangement — (i) to make an adjustment between the person and another person according to whether a commodity is worth more or less, at a specified point in time; (ii) to pay an amount of money determined or to be determined by reference to the change in value of a commodity over a specified period of time; or (iii) to deliver to another person at an agreed future time an agreed amount of commodities at an agreed price; (b) the provision by any person referred to in paragraph (a) of any advance, credit facility or loan, directly or indirectly, to facilitate an act of the description referred to in that paragraph; or (c) the act of entering into or offering to enter into, or inducing or attempting to induce a person to enter into, an arrangement with another person (whether on a discretionary basis or otherwise) to enter into any contract to facilitate an act of the description referred to in paragraph (a) or (b); “member” means a person who holds a membership of any class or description of a commodity market whether or not the person holds any share in the share capital of that commodity market; “officer” has the meaning given by the Companies Act 1967; “spot commodity broker” means a person whether as principal or agent who carries on the business of soliciting or accepting orders, for the purchase or sale of any commodity by way of spot commodity trading, whether or not the business is part of, or is carried on in conjunction with, any other business, but does not include a commodity broker; “spot commodity broker’s representative” means a person who acts for, or by arrangement with, a spot commodity broker (other than a person who is a director of a corporation holding a spot commodity broker’s licence or is a person who is in the direct employment of a spot commodity broker) and who performs any of the functions of that spot commodity broker in connection with spot commodity trading, whether the person’s remuneration is by way of commission or otherwise, but does not include a commodity broker’s representative; “spot commodity pool operator” means any person who carries on a business in the nature of a collective investment scheme within the meaning of section 2 of the Securities and Futures Act 2001 and who, in connection therewith, accepts or receives from other persons funds, security or property, either directly or through capital contributions, the sale of shares or other forms of security or otherwise for the purpose of spot commodity trading, but does not include a commodity pool operator; “spot commodity pool operator’s representative” means a person in the direct employment of, or acting for, or by arrangement with, a spot commodity pool operator, who performs for that spot commodity pool operator any of the functions of a spot commodity pool operator, but does not include a commodity pool operator’s representative; “spot commodity trading” means the purchase or sale of a commodity at its current market or spot price, where it is intended that such transaction results in the physical delivery of the commodity. [10/2018; 1/2020] Application 3. This Act does not apply to — (a) the Singapore Exchange Derivatives Clearing Ltd; (b) a person operating a clearing facility within the meaning of the Securities and Futures Act 2001 who — (i) has notified the Monetary Authority of Singapore of the person’s intent to operate the clearing facility under section 49 of that Act; or (ii) is exempted under section 53 of that Act; (c) the holder of a capital markets services licence under the Securities and Futures Act 2001 in respect of leveraged foreign exchange trading, when acting lawfully under that Act, but only to the extent that the activities carried out by such person are regulated under the Securities and Futures Act 2001.