Changes to margin requirements for product financing provided by CMS licence holders in force

3 November 2025

The Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations (“Regulations”) have been amended with effect from 31 October 2025 to implement changes to the margin requirements for product financing provided by holders of a capital markets services licence (“CMS licence holder”).

The Regulations require a CMS licence holder to meet various margin requirements when providing the regulated activity of product financing. The Regulations have been amended to implement two changes with the objective of fostering investor demand and overall market vibrancy while continuing to balance against excessive leverage risks for CMS licence holders:

  • Increase the aggregate limit on margin exposures in the margin accounts of all customers of a CMS licence holder from 300% to 500% of the CMS licence holder’s free financial resources. This will allow a CMS licence holder to better support investors’ trading interest in specified products. The revised limit also aligns Singapore’s requirements more closely with those in other jurisdictions where such limits range between five times and 10 times of a broker’s regulatory capital.
  • Removal of the previous limit, which was set at 100% of the CMS licence holder’s free financial resources, on margin exposures in the margin accounts of all customers of a CMS licence holder in respect of specified products, other than those quoted on an approved exchange. “Specified products” is defined in the Securities and Futures Act 2001 to mean securities, specified securities‑based derivatives contracts, or units in a collective investment scheme. This change will simplify MAS’ product financing requirements and better align the requirements in Singapore with other jurisdictions.

From 22 May 2025 to 21 June 2025, MAS conducted a public consultation on these changes and published its Response to the feedback received on 15 October 2025.

In its Response, MAS clarified that it would not make further amendments to allow securities collateral to be netted against a customer’s margin exposure, as this would expose CMS licence holders to unnecessary market risk. Unlike cash collateral, cash dividends, and sales proceeds receivable which have fixed and determinable value, provide immediate or near-term availability and carry minimal settlement risk, securities collateral is subject to market, liquidity, and settlement risks. MAS notes that the changes made already represent a significant relaxation of previous requirements and will enable CMS licence holders to better meet investor demand.

Reference materials

The following materials are available on Singapore Statutes Online sso.agc.gov.sg and the MAS website www.mas.gov.sg:

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