SINGAPORE Law and Practice Contributed by: Kenneth Pereire and Lin YingXin, KGP Legal LLC
ing brokers’ decision-making processes, ensur - ing that client interests remain paramount. This regulatory measure underscores the MAS’s broader commitment to ensuring transparency, fairness and investor protection within the finan - cial markets. It aligns with Singapore’s reputa - tion as a secure, transparent and trustworthy financial hub that is keen on adapting to global trends while maintaining the highest standards of market integrity. For context, PFOF is a prevalent practice in other jurisdictions, particularly in the US, where platforms like Robinhood have faced scrutiny over similar concerns. While PFOF may be per - mitted in certain markets, the stringent stance adopted by Singapore sets a benchmark for pri - oritising client welfare and maintaining market confidence, further distinguishing Singapore’s financial regulatory landscape. 6.8 Market Integrity Principles Market Integrity The basic principles governing trading to main - tain market integrity are outlined in the SFA, which mandates that markets be fair, orderly and transparent. A fair market ensures proper trading practices and provides non-discrimi - natory access to market facilities and informa - tion, fostering an equitable environment for all participants. An orderly market is characterised by robust procedures and systems that facili - tate organised transactions while minimising the risk of market failure. Transparency in trading, including the real-time availability of pre-trade and post-trade information, is crucial for main - taining market integrity. Moreover, regulatory measures have been implemented to address emerging challenges, such as those in the digital payment token (DPT)
services sector. Following a consultation paper released by MAS on proposed measures for Market Integrity for DPT services, regulatory measures for digital payment token services were introduced. These measures aim to uphold market integrity in the evolving digital landscape, aligning with the fundamental principles of fair - ness, orderliness and transparency outlined in the SFA. Market Abuse Market abuse and misconduct, defined as vio - lations of the SFA, encompass practices such as insider trading, false trading and breaches of corporate disclosure requirements. To com - bat such misconduct, the MAS and SGX have jointly published a trade surveillance practice guide, assisting brokers in implementing effec - tive monitoring practices. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations SGX RegCo published the Algorithmic Trading Regulatory Guide in 2020 that recommends best practices in governance, risk controls, devel - opment process and testing process for SGX member firms that use algorithms for trading in Singapore markets. In 2023, SGX RegCo published a consultation paper regarding proposed changes to its Futures Trading Rules to formalise important parts of the Algorithmic Trading Regulatory Guide in relation to the requirements for automated trading. There are currently no differentiated regulatory regimes for different asset classes.
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