Securities and Futures Act (SFA) chapter explainers — Complete 2026 guide
The securities and futures act (SFA) is Singapore’s principal statute governing capital markets, licensing of intermediaries, market conduct and the offering of securities. This 2026 chapter-by-chapter explainer is written for directors and counsel who need to understand when the securities and futures act applies and what it requires.
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 regulates
The Securities and Futures Act 2001 (SFA) is administered by the Monetary Authority of Singapore (MAS). It establishes the licensing regime for capital markets intermediaries, the rules for offers of securities and collective investment schemes, the market conduct prohibitions on insider trading and market manipulation, and the framework for approved exchanges and clearing facilities. If a business deals in capital markets products, advises on them, or operates market infrastructure, the SFA is the first statute to consult.
Who needs to read the SFA
Fund managers, brokers, corporate finance advisers, custodians and any company contemplating a securities offering are directly affected. Directors of regulated entities carry personal responsibility for the firm’s compliance with its licence conditions, so board members of MAS-licensed firms should understand the regime even if they are not involved in day-to-day operations.
Licensing: the Capital Markets Services regime
Section 82 of the Securities and Futures Act establishes that a person must not carry on a business in any regulated activity, or hold themselves out as doing so, unless they hold a Capital Markets Services (CMS) licence for that activity or fall within an exemption. The regulated activities include dealing in capital markets products, fund management, custodial services and advising on corporate finance. Our guide to holding a Capital Markets Services licence as a fund manager explains the application and ongoing obligations in detail.
Section 99 of the Securities and Futures Act sets out the exemptions from the licensing requirement, including certain banks, finance companies and persons acting within prescribed limits. Reliance on an exemption is a legal judgement that should be documented carefully.
Offers of securities and prospectus requirements
Part 13 of the SFA governs offers of investments. The general position is that an offer of securities requires a prospectus registered with MAS unless an exemption applies, such as the small offers exemption, the private placement exemption, or offers to institutional and accredited investors. Each exemption carries conditions, and breaching them can render an offer unlawful.
Cost, timeline and capital requirements
The SFA regime carries real financial thresholds:
- CMS licence application: MAS targets a review period of around 4 months for a complete application, though complex cases take longer.
- Base capital: a fund manager dealing with retail investors must maintain base capital of S$1,000,000; an accredited or institutional fund manager requires S$250,000.
- Application fee: S$1,000 per regulated activity for a CMS licence.
- Annual fees and risk-based capital: ongoing financial resources requirements apply throughout the life of the licence.
Market conduct and common mistakes
The SFA prohibits insider trading, false trading, market rigging and the dissemination of misleading information. These prohibitions apply to everyone, not just licensed persons. Common compliance failures include operating a regulated activity before the licence is granted, relying on an investor-class exemption without verifying investor status, and inadequate disclosure in placement documents. Each carries civil penalty or criminal exposure.
Step-by-step: applying for a CMS licence in 2026
- Confirm which regulated activity or activities the business will carry on under the Second Schedule to the SFA.
- Assess whether an exemption under section 99 applies before assuming a licence is required.
- Ensure the proposed entity meets the base capital and risk-based capital requirements for the activity.
- Appoint fit-and-proper directors, a CEO and the minimum number of representatives and professionals required by MAS.
- Prepare compliance, risk and anti-money-laundering frameworks before submission.
- Submit the application through MAS and respond promptly to queries during the review.
Worked scenario: a fund manager serving accredited investors
A boutique manager intends to manage a Singapore fund for accredited and institutional investors only. It applies for a CMS licence as an accredited or institutional fund manager, maintains base capital of S$250,000, and appoints two directors and the minimum professionals with relevant experience. Because the fund is not offered to retail investors, the prospectus requirements in Part 13 are managed through the institutional and accredited investor exemptions, with investor status verified and documented for every subscriber.
Authoritative sources
Refer to the consolidated statute on Singapore Statutes Online, the licensing and conduct material published by the Monetary Authority of Singapore, and corporate filing guidance from ACRA.
Frequently asked questions
Is the SFA administered by ACRA or MAS?
MAS administers the Securities and Futures Act. ACRA administers the Companies Act 1967. A regulated firm typically has obligations under both.
What is a regulated activity?
It is an activity listed in the Second Schedule to the SFA, such as dealing in capital markets products, fund management or advising on corporate finance. Carrying it on as a business requires a CMS licence unless exempt.
Do accredited-investor-only funds still need a licence?
Fund management for accredited and institutional investors generally requires a CMS licence as an accredited or institutional fund manager, subject to MAS approval and capital requirements.
Where is the official text?
The consolidated SFA is on Singapore Statutes Online, and MAS publishes the relevant regulations, notices and guidelines on its website.
Related guides
For wider context, see our meeting mechanics, resolutions and quorum, our Employment Pass and S Pass salary thresholds, and holding a Capital Markets Services licence as a fund manager.
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.