Singapore is being one of the biggest financial hubs in the world as a Forex centers. In terms of purchasing power parity, this tiny island city-state in Southeast Asia has a population of over 5.6 million. And also, as the third-highest per capita GDP in the world.
Singapore Forex Legislation
As one of the country of the Forex centers, Singapore is also a pioneer in developing modern and effective regulation. It guarantees equity, security and Forex market transparency.
The nation has one of the lowest Forex scam rates. In addition, investors in Singapore enjoy a highly protected environment where broker honesty is underwritten by a local license. Overall, through simple laws, an extensive regulatory structure and an attractive business climate, authorities have managed to create a open, transparent Forex market.
In order to offer their services to Singapore-based investors, all brokers, including international companies, must obtain authorization from the local regulator, the Singapore Monetary Authority (MAS). They are expected to operate either under a Capital Markets Services or a Financial Advisors license. It is nearly all of the country’s Forex and CFD brokers have a Capital Markets Services license. To receive it, Forex agents are going through a review process. It aims at finding out if brokers are trustworthy and compliant with all relevant legislation.
Brokers have Enough Resources
Brokers have enough resources to cover any losses and avoid bankruptcy. Another prerequisite is for the company to create segregated accounts for its clients. Therefore, their money is safe from corporate funds.
Those who want to deal in securities need to have a minimum S$200 million group shareholders’ fund SGD. Meanwhile, future brokers need a minimum S$100 million capital.
Forex brokers in Singapore cannot take positions in money markets or foreign exchange or serve as principal. The country has not placed any limits on the trade conditions until recently. For example, most regulators set a leverage limit. The limit is up to 25:1 according to Japan’s FSA. In EU, the limit is up to 30:1. In US, it is up to 50:1. Brokers in Singapore, however, may give their customers as much leverage as they wish. However, the regulator has limited it to 50:1.
