Approved Clearing House (ACH) or Recognised Clearing House (RCH)
The Approved Clearing House (ACH) or Recognised Clearing House (RCH) licence is issued by the Monetary Authority of Singapore (MAS) for companies wishing to operate a clearing facility under the Securities and Futures Act 2001. Validity is confirmed by the agency, with processing times available on the MAS website.
- Processing time
- available on the agency's website
- Issuing authority
- MONETARY AUTHORITY OF SINGAPORE (MAS)
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Who needs the Approved Clearing House (ACH) or Recognised Clearing House (RCH)
This licence applies to Singapore businesses registered under the following SSIC industry codes:
- Required to operateDivision 64 — FINANCIAL SERVICE ACTIVITIES (EXCEPT INSURANCE AND PENSION FUNDING)
Includes: 64110 Central bank, 64120 Full banks, 64130 Wholesale banks, 64140 Merchant banks
Includes: 66110 Securities and commodities exchange, 66121 Stock, share and bond brokers and dealers, 66122 Foreign exchange brokers and dealers, 66123 Gold bullion brokers and dealers
What's involved in getting the Approved Clearing House (ACH) or Recognised Clearing House (RCH)
The scope of the application — what must be in place, how the agency reviews, and where applications typically stall.
What this licence allows the business to do
The ACH or RCH licence permits a company to operate a clearing facility in Singapore, which is essential for the settlement of trades in securities and derivatives. This enables the business to facilitate the clearing and settlement of transactions, ensuring financial stability and efficiency in the market.
What must be in place before the licence can be granted
Before the licence can be granted, the company must meet specific regulatory requirements set by the Monetary Authority of Singapore (MAS). This includes having a robust operational framework, adequate risk management systems, and compliance with the Securities and Futures Act 2001. Additionally, the company must demonstrate the capability to manage clearing operations effectively, which may involve having qualified personnel and appropriate technology in place.
How the agency reviews and decides
The MAS conducts a thorough review of the application, which includes assessing the company's operational capabilities and compliance with regulatory standards. This may involve a detailed evaluation of the proposed clearing facility's structure, risk management practices, and governance framework. The agency may also conduct interviews or request additional information to ensure that all criteria are met before granting the licence.
Common reasons applications stall
Applications for the ACH or RCH licence can stall for several reasons. Common issues include insufficient documentation demonstrating compliance with regulatory requirements, inadequate risk management frameworks, or failure to meet operational standards. Additionally, if the proposed clearing facility does not align with the MAS's regulatory expectations or if there are concerns about the company's financial stability, the application may face delays or rejections. Engaging with experts familiar with MAS regulations can help mitigate these risks.
Required documents and prerequisites
Items the applicant typically needs ready before submitting:
- Overview
- Clearing houses are regulated by MAS as approved clearing houses (ACHs) or recognised clearing houses (RCHs) under the Securities and Futures Act 2001. A company will need an ACH or RCH licence if it wishes to operate a clearing facility as defined under Part 2 of the First Schedule to the SFA.
Approved Clearing House (ACH) or Recognised Clearing House (RCH) FAQ
Do I need this licence to start operating a clearing facility?
Yes, an ACH or RCH licence is mandatory for any company intending to operate a clearing facility in Singapore. Without this licence, the company cannot legally conduct clearing and settlement activities, which are crucial for the functioning of financial markets.
What can my business do once licensed?
Once licensed as an ACH or RCH, your business can operate a clearing facility, facilitating the clearing and settlement of trades in securities and derivatives. This role is vital for ensuring market integrity and efficiency, allowing participants to transact with confidence.
What happens if I operate without it?
Operating a clearing facility without the ACH or RCH licence is illegal and can result in significant penalties, including fines and legal action by the Monetary Authority of Singapore (MAS). It may also damage your business's reputation and hinder future licensing opportunities.
How does this fit relative to incorporating my company?
Obtaining the ACH or RCH licence is a separate process from incorporating your company. While incorporation is the first step in establishing your business, securing the necessary licences, such as the ACH or RCH, is crucial for legally operating specific financial services.
What's the most common reason applications get rejected?
The most common reason for rejection of ACH or RCH licence applications is the failure to meet the regulatory requirements set by the MAS. This can include inadequate risk management systems, insufficient operational capabilities, or incomplete documentation demonstrating compliance with the Securities and Futures Act.
Can a foreign-owned company hold this licence?
Yes, a foreign-owned company can hold an ACH or RCH licence in Singapore, provided it meets all regulatory requirements set by the Monetary Authority of Singapore (MAS). This includes demonstrating the necessary operational capabilities and compliance with local laws.
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Other MAS licences
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