Singapore’s Financial Regulator to Give Green Light to List Crypto Derivatives on Stock Exchanges

  • Trading of crypto derivatives on approved domestic exchanges will be subject to Securities and Futures Act
  • Asia Pacific Exchange (APEX) is keen on offering these products and have already started the research
  • Crypto derivatives “not suitable” to retail investors, MAS strongly advises against trading

The Monetary Authority of Singapore is poised to let crypto derivatives to be listed and traded on approved domestic exchanges, Singapore’s financial regulator said on Wednesday.

Under its proposal, trading of derivatives on cryptocurrencies like Bitcoin and Ethereum will be subject to the Securities and Futures Act. This proposal MAS said is made in response to interest from asset managers and hedge funds that trade such products. The regulator said it it's official statement,

“MAS’s proposal will allow approved exchanges in Singapore to meet the need of investors to manage their exposure to payment tokens while bringing the activity under regulatory oversight.”

ICE Singapore will Address the Needs of Institutional Traders

In the US, CME Group and Intercontinental Exchange (Bakkt) are already offering Bitcoin futures and are planning to further introduce other derivatives products in the coming months. Jennifer Ilkiw, vice president for the Asia Pacific at ICE said,

“A clear regulatory framework will support the healthy development of digital-asset markets,”

“We appreciate that MAS is moving ahead with this consultation. Bakkt and ICE have created an end-to-end regulated solution for Bitcoin markets on both ICE Futures U.S. and ICE Futures Singapore to address the needs of institutional traders.”

MAS: Retail Investors Strongly Advised not to Trade

ICE’s local unit Singapore Exchange Derivatives Trading and Asia Pacific Exchange (APEX) are among the MAS approved platforms but currently doesn’t list any such products.

APEX has already started the product research and development as shared by the platform's Nelvin Toh to Bloomberg. Toh said,

“Asia Pacific Exchange is extremely keen to take the lead in offering Payment Token Derivatives on an approved exchange in Singapore.”

However, MAS is taking a cautious approach for retail investors and considers crypto derivatives “not suitable” to most of them. As per the proposed measures, a minimum of 50% margin will be required for retail investors. The regulator said,

“Retail investors are strongly advised not to trade in payment token derivatives, and even if they choose to do so, should exercise utmost caution.”

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