The Commodity Trading Act 1992 (CTA) regulates “spot commodity trading” activities.
What is spot commodity trading
“Spot commodity trading” refers to 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.
Commodities may include, but are not limited to, oil, gas, chemicals, palm oil, rubber, soya beans, iron ore, aluminium, gold, silver, etc.
Who requires a license for spot commodity trading?
The CTA requires all person who is conducting / involved in spot commodity trading to be licensed unless the person is exempted.
Am I eligible for an exemption from licensing?
Generally, you would be exempted from licensing:
Any person conducting or intending to conduct business activities involving commodities should seek independent legal advice from a lawyer qualified to practise Singapore law to ensure that the person’s intended business activities are in compliance with the CTA and all applicable legal and regulatory requirements in Singapore.
Please refer to the provisions in the CTA and the Frequently Asked Questions (FAQ) section of these webpages for details.
Prior to April 2018, the International Enterprise Singapore Board (IE Singapore) was the regulatory body responsible for administering the CTA.
With the merger of IE Singapore and the Standards, Productivity and Innovation Board (SPRING Singapore) in April 2018, the Enterprise Singapore Board (Enterprise Singapore) is now the regulatory body responsible for administering the CTA.
The Singapore Government takes a firm stance against unlicensed and illegal business activities involving “spot commodity trading”. Failure to comply with the CTA may result in an offence punishable by fine or imprisonment or both.
The CTA promotes bona fide business activities involving “spot commodity trading” as well as protects investors and the public against “bucket shops” in “spot commodity trading”.
While the CTA provides a safeguard for the public, the public must also remain vigilant and wary of fraudulent firms and fraudulent individuals conducting business activities involving commodities.
Consumers can also refer to the Financial Institutions Directory on the MAS website (eservices.mas.gov.sg/fid) for a list of financial institutions regulated by MAS and the regulated activities they are authorised to provide.
Consumers can also check the Investor Alert List (IAL) on the MAS website which provides a listing of unregulated persons or entities that, based on information received by MAS, may have been wrongly perceived as being licensed or regulated by MAS. Consumers must exercise caution when dealing with all unregulated entities, not just entities that are listed on the IAL, as the list is not exhaustive and is updated from time to time.