Press Statement: MAS Proposed Regulatory Approach for Derivatives Contracts on Payment Tokens

Date: November 20, 2019

SIAS notes that MAS proposes to regulate payment token derivatives contracts that are traded on Approved Exchanges in Singapore and will introduce additional measures for retail investors. SIAS has been noticing also interest from retail investors wanting to participate in these payment tokens. However, these instruments are highly volatile and, therefore, are very risky for retail investors. They are also not very transparent in terms of pricing and ownership.

We are pleased that MAS has taken cognizance of the high risks involved in trading Payment Token Derivatives, and is discouraging retail investors from trading in such derivatives by putting in place certain measures to safeguard them from over-exposure. Examples of such Payment Token Derivatives like CFD on Bitcoins currently exists at CFD brokers but these contracts are not regulated. These brokers who offer such CFD contracts will have to comply with the measures and requirement that brokers collect 1.5 times the standard amount of margins, and no less than 50% of the contract value, from retail investors is a good safeguard measure.

The inclusion of these products in the approved exchanges will certainly provide new opportunities for all regulated exchanges. This may create liquidity for these products.

SIAS cautions retail investors to be cognizant of the high risks involved in participating in these products.


David Gerald
Founder,  President & CEO
Securities Investors Association (Singapore)