The Commodity Trading Act 1992 (CTA) regulates business activities involving “spot commodity trading”, as defined in the CTA. Any person conducting business activities involving “spot commodity trading” is subject to licensing under section 13A(1) of the CTA unless specifically exempted under section 14A(1) to the extent specified in the Schedule to the CTA.
“Spot commodity trading” is defined in section 2 of the CTA as “…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”. The licences covering “spot commodity trading” include licences for “spot commodity broker”, “spot commodity broker’s representative”, “spot commodity pool operator” and “spot commodity pool operator’s representative”, as provided in section 13A(1) of the CTA.
Prior to 8 October 2018, the CTA also regulated business activities involving “commodity contracts” as defined in the CTA (also known as “OTC commodity derivatives”). Regulatory oversight of OTC commodity derivatives was transferred to the Monetary Authority of Singapore (MAS) on 8 October 2018.
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.
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.
Any person conducting business activities involving “spot commodity trading” is subject to licensing under section 13A(1) of the CTA unless specifically exempted under section 14A(1) to the extent specified in the Schedule to the CTA.
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 individuals conducting business activities involving commodities.