Singapore Proposes Measures to Prevent Unfair Crypto Trading and Address Market Integrity Risks

Measures applicable to all DTPSPs

Fair, orderly, and timely order execution

• A licensed or exempt digital payment token (DPT) service provider in Singapore (DTPSP) should maintain adequate policies and procedures, in a manner that is commensurate with its business, on:
  • handling and execution of customers’ orders in a fair, orderly, and timely manner; and
  • correction or cancellation of error trades.

  The above policies and procedures should be disclosed to customers.

• A DPTSP should not receive any commission or payment from other persons for routing customers’ orders to them.
• Comparable orders for different customers should be handled and executed according to time of receipt.

Prevention of unfair trading practices

• A DPTSP should, on a real-time basis, monitor orders and transactions for unusual or suspicious activity.
• Fair and objective procedures should be put in place to investigate any potentially unfair trading practices. The DPTSP should take appropriate action (e.g., suspension of trading access) where necessary.
• Records of all on-chain and off-chain orders and transactions must be maintained for five years and provided to MAS upon request.

Management of material non-public information (MNPI)

• A DPTSP should maintain a controlled list of persons with access to MNPI on a need-to-know basis.
• Information barriers should be put in place to restrict access to MNPI to privy persons only.
• A DPTSP should maintain policies and procedures on personal trading activities by its officers and employees.

Measures applicable to DPTSPs that operate a DPT trading platform

Fair, orderly, and transparent operation of DPT trading platforms

• A DPTSP that operates a DPT trading platform should maintain business rules that make satisfactory provision for the DPT trading platform to be operated in a fair, orderly, and transparent manner.
• The rules should include the following:
  • objective, non-discriminatory, and transparent access criteria;
  • execution protocols providing non-discriminatory access to, and equitable matching of, bids and offers;
  • prohibition of unfair trading practices;
  • correction or cancellation of error trades;
  • controls to prevent disorderly trading (e.g., order entry controls) and corrective actions to be taken (e.g. trading suspension); and
  • dissemination of pre-trade and post-trade information, alerts on unusual trading activities and warnings.

Measures applicable to all market participants

Prohibited market conduct

• Existing prohibitions against unfair trading practices as applicable to capital markets products will be introduced with the necessary modifications to DPTs.
• The prohibitions will cover the following conduct:
  • false trading and market rigging;
  • market manipulation;
  • false or misleading statements;
  • fraudulently inducing persons to deal;
  • employment of manipulative and deceptive devices;
  • bucketing and cornering;
  • dissemination of information on illegal transactions; and
  • insider trading.