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Commodity Trading Licenses in Singapore

Updated on Friday 04th January 2019

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Commodity-Trading-Licenses-in-SingaporeThe commodity trading sector in Singapore

There are around 300 global trading companies activating in Singapore under the International Enterprise Global Traders Program. The program also includes some of the largest commodity groups in the world. Due to its geographical position and connectivity to about 600 ports in 120 countries, Singapore is the ideal location for commodity trading companies. The commodity trading sector has also evolved a lot during the last years transforming Singapore into one of the largest producer and consumer of commodities in the world.

The Singapore Commodity Trading Act

The commodities trading sector falls under the very strict regulations the Singapore Commodity Trading Act (CTA) enabled in 1992. Singapore companies or residents involved in commodity trading activities are subject to the legislation related to commodity derivatives and clearing facilities for commodity derivatives as described by the CTA. The Commodity Trading Act in Singapore covers all commodities with the exception of commodities regulated by the Securities and Futures Act (SFA). The term “commodity” refers to goods subject of:

  • - commodity forward contracts,
  • - leveraged commodity trading,
  • - contracts resulted from trading in differences,
  • - spot commodity trading.

For complete details about the recent changes brought to the Commodity Trading Act please contact our specialists in company incorporation in Singapore.

Types of commodity trading licenses in Singapore

The Commodity Trading Act stipulates the conditions under which a Singapore company or individual must apply for a commodity trading license. Section 14A in the Commodities Act also stipulates the exempt categories of Singapore residents and companies providing broking or advisory services. There are several types of commodity trading licenses in Singapore:

  • - the commodity broker’s license or CB license,
  • - the spot commodity broker’s license or SCB license,
  • - the commodity trading adviser’s license or CTA license,
  • - the commodity futures pool operator’s license or CFPO license,
  • - the commodity pool operator’s license or CPO license,
  • - the spot commodity pool operator’s license or SCPO license.

Licensed banks and approved merchant banks in Singapore fall under Section 14A in the CTA and do not require commodity trading licenses.

Licensing of commodity trading companies in Singapore

In order to obtain a Singapore commodity trading license one must submit the following documents:

  • - a specific application form,
  • - a statement of the applicant’s assets and liabilities,
  • - in case of Singapore companies, the last financial statement, the profit and loss account and an auditor’s report must be submitted.

The commodity trading license in issued by International Enterprise in Singapore and has one-year validity.

For detailed information about the licensing of commodity trading companies you can rely on our  company registration firm in Singapore.

 

 

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