Singapore strengthens trading safety. Are your funds safe? Why choose OANDA

In recent weeks, the financial landscape in Singapore has been sharply reminded of the critical importance of regulated broking services. In a decisive move against illicit economic activities, the Singapore Police Force (SPF) and the Monetary Authority of Singapore (MAS) announced just days ago that two prominent, yet unregulated, online trading platforms will be blocked for Singapore residents starting June 20, 2025.

These platforms, operating without the requisite MAS licenses, were found to be offering leveraged foreign exchange, commodities, indices, and equities trading to Singaporean customers. (MAS link with details here)

This decisive action against the two platforms, whose names are widely known in the trading community, serves as a stark reminder of the significant risks retail investors face when engaging with unregulated entities. Unlike regulated brokers who operate under stringent oversight, these firms often exist in a legal grey area, leaving clients vulnerable to opaque practices, financial instability, and a limited avenue for recourse should things go awry. The police emphasised that "most unregulated online trading platforms are located outside Singapore and pose a greater risk of fraud since the credibility of their operations cannot be easily verified."

This sentiment underscores a crucial message: in Singapore's meticulously regulated financial environment, a MAS licence isn't just a badge; it's a shield for investor protection.

Without the oversight of a regulator like MAS, investors are exposed to a myriad of dangers, including:

• Fraud and Scams: Unregulated firms often operate with malicious intent, engaging in schemes like Ponzi schemes, or simply disappearing with client funds.
• Lack of Client Fund Segregation: As highlighted earlier, unregulated brokers are not required by regulations and typically do not segregate client funds from their operational capital, making them vulnerable in case of the firm's insolvency.
• Manipulative Trading Practices: Without regulatory scrutiny, these firms can engage in unfair execution, widen spreads excessively, or manipulate prices to their advantage, leading to significant losses for traders.
• Inability to Seek Recourse: When disputes arise with unregulated brokers, investors have little to no legal recourse, especially if the firm is based in an offshore jurisdiction with lax regulations. Recovering funds becomes arduous, if not impossible.

Brokers regulated by the MAS to provide regulated activities must meet rigorous standards across various critical areas. These include robust financial health, sound internal controls, effective risk management systems, and a commitment to fair dealing with clients. For retail CFD traders in Singapore, choosing an MAS-regulated broker like OANDA provides a crucial layer of security and peace of mind, mitigating the risks of leveraged trading in a volatile market.

Firstly, financial stability and capital adequacy are paramount. MAS mandates regulated brokers to maintain sufficient capital to absorb potential losses and safeguard client funds. This ensures that the broker has the financial fortitude to meet its client obligations even in adverse market conditions. Unlike unregulated entities, which might operate with insufficient capital, MAS-regulated brokers are held to strict prudential requirements.

Secondly, segregation of client funds is a cornerstone of MAS regulation. This means client deposits are kept entirely separate from the broker's operational funds. In the unlikely event of a broker's insolvency or bankruptcy, client funds are protected and cannot be used to settle the broker's debts. This critical safeguard ensures that retail investors' capital remains secure, starkly contrasting the heightened risk of losing funds when dealing with unregulated platforms. As a MAS-regulated entity, OANDA strictly adheres to this principle, assuring its clients that their deposits are ring-fenced.

Thirdly, MAS demands that financial institutions commit to high transparency and adopt best execution principles. Regulated brokers must provide clear and comprehensive information regarding their trading practices, including spreads, commissions, and execution policies. This transparency empowers retail investors to make informed decisions and prevents hidden costs or manipulative practices. Furthermore, financial institutions must adhere to best execution principles set out by regulations to ensure that orders are executed fairly and efficiently, minimising the risk of slippage or unfair pricing.

Please refer to some of OANDA resources to bring about this transparency here

1. Our pricing
2. Our charges
3. Our financing cost

For more information, please visit our website

Beyond these fundamental pillars, MAS also emphasises robust risk management and internal controls. This includes implementing systems to monitor trading activities, manage operational risks, and prevent fraudulent behaviour. For a broker like OANDA, this translates into advanced trading platforms equipped with risk management tools, clear margin call policies, and educational resources designed to help clients understand and manage the risks associated with high-risk leveraged products.

As a MAS-regulated broker (OANDA Asia Pacific Pte Ltd holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore, Co. Reg. No 200704926K), OANDA demonstrates its commitment to retail investor protection through several concrete measures:

• Strict Adherence to Margin Requirements and Leverage Limits: MAS sets specific margin rates and maximum leverage parameters for different asset classes traded by retail clients. OANDA rigorously adheres to these regulations, preventing retail investors from taking on excessive leverage that could lead to rapid and significant losses.
• Transparent Pricing and Execution: OANDA provides clear and accessible information on its spreads and other charges. Its trading platforms are designed for transparent order execution, giving clients real-time visibility into pricing and trade confirmations.
• Comprehensive Risk Disclosures and Educational Resources: OANDA offers extensive risk disclosure statements and provides educational materials, webinars, and market analysis to help clients understand market dynamics, develop risk management strategies, and make informed trading decisions.

Please refer to our educational resources here

• Customer Knowledge Assessment and Suitability Assessment: In line with MAS requirements for "Specified Investment Products," OANDA conducts customer knowledge assessments and account reviews to determine if a retail client has the relevant understanding of the risks involved.
• Guaranteed Stop-Loss Orders (GSLOs) and Margin Call Alerts: For many instruments, OANDA offers GSLOs, guaranteeing an exit price for a trade, limiting potential losses. Additionally, margin call alerts notify clients when their account equity is approaching the margin closeout level.

Please understand the GSLO approach of OANDA here.

Robust Complaint Handling and Dispute Resolution: OANDA maintains dedicated client support channels and processes to ensure that any grievances are addressed systematically and fairly, providing an avenue for recourse for retail investors.

OANDA was founded in 1996 with a vision to revolutionise foreign exchange trading by providing transparent data and innovative technology. Starting by offering free exchange rate data online, OANDA soon pioneered web-based currency trading with the launch of its fxTrade platform. Over its more than 25-year history, OANDA has grown into a globally recognized broker with regulated entities in key financial centers worldwide, including New York, Toronto, London, Tokyo, and of course, Singapore.

Please see the licences that OANDA has from MAS here.

In 2007, OANDA made its first significant expansion into the Asia-Pacific region by opening an office in Singapore, a testament to the city-state's growing importance as a financial hub and its robust regulatory framework. The firm has consistently focused on technological innovation, client-centric services, and maintaining its reputation as a trusted provider of foreign exchange data and trading solutions.

In conclusion, while the allure of high returns might draw some to unregulated platforms, the inherent risks far outweigh any perceived benefits. The comprehensive regulatory framework enforced by MAS, and the unwavering commitment of regulated brokers like OANDA to adhere to these standards are crucial for fostering a secure and trustworthy trading environment for retail investors in Singapore.

• MAS Financial Institutions Directory (to check if a firm is regulated): https://eservices.mas.gov.sg/fid
• MAS Investor Alert List (firms not regulated by the MAS but may be perceived as being so): https://www.mas.gov.sg/investor-alert-list
• Financial Institution Representatives Register (to check if the employee of a financial institution is licensed to perform regulated activities)

https://eservices.mas.gov.sg/rr