CM LIC – (M8 + M8A + M9 + M9A) – Life Insurance, Investment-Linked Policies And Collective Investment Schemes Set Two

Correct: As an integrated regulator, MAS performs consolidated supervision of financial groups. This approach allows MAS to have a holistic view of the risks facing a financial conglomerate. By overseeing various sectors (banking, insurance, and securities) under one roof, MAS can better identify inter-group dependencies and ensure that business continuity management (BCM) is effective across all entities to prevent a failure in one area from spreading to others, thereby maintaining overall financial stability.

Incorrect: The suggestion that MAS delegates all primary oversight to SGX is incorrect; while SGX is a self-regulatory organization, MAS retains its role as the integrated regulator with direct supervisory authority. Forcing business continuity teams to be non-communicating is contrary to the goal of integrated risk management, which seeks to identify group-wide vulnerabilities. MAS’s supervisory approach is risk-based rather than being triggered solely by a rigid SGD 1 billion turnover threshold for business continuity requirements.

Takeaway: MAS’s role as an integrated regulator enables consolidated supervision, which is essential for managing cross-sectoral risks and ensuring the resilience of financial conglomerates in Singapore.

Correct: Under the Securities and Futures Act (SFA) and the opt-in regime introduced by the Monetary Authority of Singapore (MAS), individuals who meet the quantitative criteria for an Accredited Investor (AI) are treated as retail investors by default. To be treated as an AI, the financial institution must provide the individual with a disclosure of the consequences of being an AI (such as the loss of certain regulatory protections) and the individual must provide a written statement that they consent to being treated as an AI.

Incorrect: Treating the client as an AI automatically is incorrect because the current regime requires an explicit opt-in for individuals. Treating the client as an AI by default with an opt-out period is the opposite of the actual regulatory requirement, which mandates a retail-by-default status. Verbal confirmation is insufficient as the regulations require a written disclosure and a written consent for the opt-in process to be legally valid.

Takeaway: In Singapore, eligible individuals are treated as retail investors by default and must actively opt-in to Accredited Investor status after receiving a disclosure of the protections they will lose.

Correct: Under the Securities and Futures Act (SFA) of Singapore, bucketing is strictly prohibited. It occurs when a person purports to execute an order for the purchase or sale of securities but instead takes the opposite side of the transaction for their own account (or the firm’s account) without actually executing the trade on a recognized exchange like the SGX. This is considered a serious criminal offense because it undermines the transparency and integrity of the exchange-traded market and creates an inherent conflict of interest where the dealer profits from the client’s loss.

Incorrect: Market rigging involves creating artificial prices or volumes, which is a different market misconduct category than bucketing. Internal cross-trades are highly regulated and generally cannot be used to bypass exchange execution for listed securities without specific exemptions and disclosures. Front-running involves trading in anticipation of a client’s order to benefit from the price impact, whereas bucketing involves taking the actual opposite side of the client’s order off-exchange; furthermore, front-running is indeed a statutory offense under the SFA, not just an internal conduct breach.

Takeaway: Bucketing is a criminal offense under the Securities and Futures Act involving the failure to execute client orders on a recognized exchange while taking the opposite position privately.

Correct: In Singapore, the MAS Guidelines on Individual Accountability and Conduct emphasize the importance of a culture of ethics and a robust whistleblowing framework. Firms must provide a safe environment for employees to report concerns without fear of reprisal. Furthermore, gift and entertainment policies should be comprehensive enough to include hospitality and ‘networking’ that could reasonably be perceived to impair the objectivity of the representative or the firm.

Incorrect: Increasing the reporting threshold reduces transparency and does not address the underlying issue of undue influence. Relying on annual declarations is a reactive measure that fails to provide a real-time reporting mechanism. While a ‘four-eyes’ approach to networking is a possible control, it does not fulfill the regulatory expectation for a dedicated whistleblowing channel. Encouraging employees to confront suspects directly is dangerous and contrary to the principles of whistleblower protection.

Takeaway: A robust ethics framework requires both a comprehensive definition of undue influence (including entertainment) and a confidential whistleblowing mechanism to protect those reporting misconduct.

Correct: Under the Securities and Futures Act (SFA), the Monetary Authority of Singapore (MAS) has the authority to conduct inspections of Capital Markets Services (CMS) licensees to ensure compliance with regulatory requirements. Licensees are legally obligated to provide MAS officers with access to all books, accounts, and documents. Establishing a robust record-keeping system and a clear compliance protocol ensures the firm can fulfill its statutory obligation to cooperate and provide accurate information, thereby reducing the risk of criminal penalties for obstruction or failure to comply with MAS’s statutory powers.

Incorrect: Deleting communications after six months is a violation of MAS record-keeping requirements, which generally require records to be kept for at least five years. Delaying responses by 30 days for legal vetting could be interpreted as obstructing MAS’s statutory powers to inspect at all reasonable times. Restricting access to physical premises or offshore servers is ineffective and legally non-compliant, as MAS powers extend to all records relating to the licensee’s business, regardless of their storage format or location.

Takeaway: CMS licensees must maintain accessible records and cooperate fully with MAS inspections and investigations as mandated by the Securities and Futures Act to avoid severe regulatory and criminal penalties.

Correct: In alignment with the enhanced SGX Listing Rules effective for financial years ending on or after 31 December 2024, listed issuers in Singapore are required to disclose the exact amount and breakdown of remuneration paid to each individual director and the CEO. This breakdown must include components such as base salary, bonuses, and any other benefits or incentives provided by the company and its subsidiaries.

Incorrect: Disclosing in bands of S$250,000 under a ‘comply or explain’ basis was previously permitted but is no longer sufficient for financial years ending on or after 31 December 2024. Disclosing only the aggregate remuneration of the board fails to meet the transparency requirements for individual accountability. There is no exemption for directors who are substantial shareholders; the requirement for individual remuneration disclosure applies regardless of their shareholding status.

Takeaway: For financial years ending on or after 31 December 2024, SGX-listed issuers must provide mandatory disclosure of the exact remuneration and breakdown for each individual director and the CEO.

Correct: In Singapore, under the Securities and Futures Act (SFA) and the MAS Guidelines on Fit and Proper Criteria, the principal firm (the CMS license holder) has the primary responsibility to ensure its representatives are fit and proper. This involves a holistic assessment of honesty, integrity, reputation, competence, and financial soundness. Specifically, MAS Notice SFA04-N14 requires principal firms to conduct mandatory reference checks for the preceding five years of the candidate’s employment to uncover any past misconduct or disciplinary issues.

Incorrect: Relying solely on a candidate’s current status at another firm is insufficient because the new principal must perform its own independent due diligence. Focusing only on financial soundness and education ignores the critical pillars of honesty and integrity. While third-party agencies can assist in gathering data, the ultimate responsibility for the fit and proper assessment cannot be outsourced and must be reviewed internally by the principal firm to ensure regulatory compliance.

Takeaway: Principal firms in Singapore must independently verify a representative’s fitness and propriety through rigorous due diligence, including five-year reference checks and MAS Register verification, before appointment.

Correct: Under the Securities and Futures Act (SFA) of Singapore, the civil penalty regime is an alternative to criminal prosecution. It allows MAS to bring an action in court against a person for market misconduct, and the court may order a civil penalty if it is satisfied on a ‘balance of probabilities’ (the civil standard of proof) that the person has contravened a provision. This is a more flexible and often more efficient enforcement tool than criminal prosecution, which requires the higher ‘beyond a reasonable doubt’ standard.

Incorrect: The approach requiring a prior criminal trial is incorrect because the SFA generally prohibits ‘double jeopardy’; if a criminal prosecution is instituted, civil penalty proceedings cannot be started, and vice versa. The approach suggesting MAS can bypass the court system entirely to impose unlimited fines is incorrect because civil penalties are either ordered by a court or settled between MAS and the offender with the offender’s consent. The claim that all cases must first be heard in a criminal court is incorrect as MAS and the Attorney-General’s Chambers have the discretion to decide which enforcement path is most appropriate for the specific case.

Takeaway: The Singapore civil penalty regime serves as a robust alternative to criminal prosecution, utilizing the civil standard of proof (balance of probabilities) to maintain market integrity.

Correct: Under Section 48 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) of Singapore, a person commits the offence of tipping-off if they know or have reasonable grounds to suspect that an investigation is taking place and disclose information to any other person that is likely to prejudice that investigation. Mr. Lim’s disclosure to the client about the CAD’s interest in the transaction logs directly alerts the suspect, potentially allowing them to hide evidence or alter their behavior, thereby prejudicing the investigation.

Incorrect: The claim that it is permissible if no explicit instruction to destroy evidence was given is incorrect because the act of disclosure itself, if it prejudices the investigation, is the offence. The requirement for a financial incentive is incorrect as tipping-off does not require a ‘quid pro quo’ or bribe to be established as a crime. The reference to the PDPA is incorrect because the PDPA does not override criminal investigation secrecy requirements, and the CDSA specifically prohibits such disclosures to the subject of an investigation.

Takeaway: In Singapore, any disclosure to a client that might prejudice a criminal investigation into money laundering or serious crimes is a strictly prohibited tipping-off offence under the CDSA.

Correct: In accordance with the SGX Listing Rules and the Securities and Futures Act (SFA) principles of fair disclosure, if material information is inadvertently disclosed to a select group, the issuer must immediately make a public announcement via SGXNet. This ensures that all participants in the Singapore securities market have equal access to price-sensitive information, maintaining market integrity and preventing potential insider trading.

Incorrect: Organizing a secondary private briefing still constitutes selective disclosure and does not satisfy the requirement for broad, public dissemination. Publishing the information through research reports before a public announcement is a violation of fair disclosure standards and could facilitate market misconduct. Delaying the disclosure until a scheduled quarterly report is inappropriate because material, price-sensitive information must be disclosed immediately once it has been leaked or selectively shared to prevent an uninformed market.

Takeaway: Under Singapore regulatory frameworks, any material information disclosed selectively must be immediately corrected through a public announcement on SGXNet to ensure a fair and orderly market.

Correct: In Singapore, the Securities and Futures Act (SFA) and the Companies Act (CA) are concurrent pieces of legislation. While the SFA (specifically Part XIII) governs the ‘offering’ of securities and provides exemptions from prospectus requirements (such as Section 272B for private placements), the Companies Act governs the internal capacity and authority of the company. Section 161 of the Companies Act explicitly states that notwithstanding anything in the company’s constitution, directors shall not exercise any power to issue shares without the prior approval of the company in a general meeting. Therefore, an SFA exemption does not remove the need for corporate authority under the CA.

Incorrect: The suggestion that SFA exemptions supersede the Companies Act is incorrect because both acts must be complied with simultaneously. The idea that there is a 20% threshold for avoiding shareholder approval is a confusion with SGX listing rules for general mandates, but Section 161 of the Companies Act still requires the underlying authority to be granted by shareholders. The claim that the Companies Act only applies to public issuances is false; the CA governs the internal administration and share capital of all companies incorporated in Singapore, whether private or public.

Takeaway: Compliance with SFA prospectus exemptions for a securities offering does not waive the requirement under Section 161 of the Companies Act for directors to obtain shareholder approval before issuing shares.

Correct: The Securities and Futures Act (SFA) aims to maintain a fair, efficient, and transparent market to uphold investor confidence. High-value gifts and entertainment can create significant conflicts of interest or the appearance of impropriety. By implementing a robust policy requiring independent pre-approval, the firm ensures that such activities are scrutinized against ethical standards and regulatory objectives, thereby preventing behavior that could undermine the integrity of the financial system.

Incorrect: Focusing only on post-event reports regarding non-public information is too narrow, as it fails to address the broader conflict of interest and the impact on market perception. Allowing the activity based on trade volume with other clients is inappropriate because high performance does not excuse potential ethical breaches or biased behavior. A disclosure-only system with annual reviews is reactive and insufficient for preventing the immediate risks to market integrity that the SFA seeks to manage through proactive compliance.

Takeaway: Maintaining market integrity under the SFA requires proactive management of conflicts of interest, such as gifts and entertainment, to ensure that professional judgment is never perceived to be compromised.

Correct: Under Section 23 of the Financial Advisers Act (FAA), entities that are licensed under the Securities and Futures Act (SFA) for dealing in capital markets products are exempt from the requirement to hold a separate Financial Adviser’s License to provide financial advisory services. These entities are known as ‘exempt financial advisers’. However, this exemption does not mean they are unregulated; they must still comply with the FAA’s conduct of business requirements, such as ensuring recommendations have a reasonable basis and notifying the Monetary Authority of Singapore (MAS) of their representatives.

Incorrect: The suggestion that a separate license is mandatory is incorrect because the FAA provides specific exemptions for SFA-licensed dealers to prevent redundant licensing. The claim that the activity is ‘incidental’ and thus exempt from the FAA entirely is false; while the firm is exempt from licensing, the activity itself is still a regulated financial advisory service under the First Schedule of the FAA. The idea that the FAA only applies if a separate fee is charged is also incorrect, as providing advice as part of a business (even if bundled with brokerage services) falls within the scope of the Act.

Takeaway: Holders of a Capital Markets Services license are exempt from holding a separate Financial Adviser’s License but must still follow FAA conduct of business rules when providing investment advice.

Correct: The Monetary Authority of Singapore (MAS) is the integrated regulator and supervisor of the financial sector in Singapore. It administers the Securities and Futures Act (SFA), which governs the capital markets. This includes the licensing and supervision of Capital Markets Services (CMS) license holders, ensuring they comply with conduct of business and capital requirements to maintain a fair and transparent market.

Incorrect: The suggestion that MAS delegates SFA enforcement exclusively to the CAD is incorrect; while they have a joint investigation arrangement for market misconduct, MAS remains the primary statutory regulator. The claim that MAS focuses only on banks and leaves all securities oversight to the SGX is false, as MAS directly regulates all capital markets intermediaries under the SFA. Finally, MAS is a regulatory body and does not act as an arbitrator for private disputes; that function is handled by the Financial Industry Disputes Resolution Centre (FIDReC).

Takeaway: MAS is the central integrated regulator in Singapore responsible for the statutory oversight of the securities industry and the administration of the Securities and Futures Act.

Correct: The Institute of Banking and Finance (IBF) is the national accreditation and certification agency for the financial industry in Singapore. It works closely with the Monetary Authority of Singapore (MAS) and industry stakeholders to develop the IBF Standards, which serve as a comprehensive professional competency framework. Its role is to elevate the professional standards of the industry through accreditation of training programs and certification of practitioners based on their skills and experience.

Incorrect: The role of issuing Capital Markets Services (CMS) licenses and conducting enforcement is the responsibility of the Monetary Authority of Singapore (MAS), not the IBF. While the IBF accredits training providers, it does not have a monopoly on training; many external institutions offer IBF-accredited courses. Legal requirements such as minimum capital and risk-based capital frameworks are statutory regulations set by MAS under the Securities and Futures Act (SFA) and its subsidiary legislation, rather than competency standards set by the IBF.

Takeaway: The IBF functions as the national body for setting competency benchmarks and certifying financial professionals in Singapore, complementing the regulatory licensing framework managed by MAS.

Correct: The Securities Industry Council (SIC) is the body established under the Securities and Futures Act (SFA) to administer and enforce the Singapore Code on Take-overs and Mergers. Its functions include interpreting the Code’s principles and rules, granting waivers where appropriate, and ensuring that all shareholders of a company involved in a takeover are treated fairly and equally.

Incorrect: The SIC is not a division of the SGX; it is a distinct council that works closely with the Monetary Authority of Singapore (MAS). The SIC does not have the power to award civil damages or compensation, as such matters are handled by the courts. Furthermore, the SIC does not comment on or approve the commercial merits of a takeover bid, as the Code is designed to ensure fair process and disclosure rather than to judge the financial attractiveness of an offer.

Takeaway: The Securities Industry Council (SIC) is the central authority in Singapore responsible for the administration and interpretation of the Singapore Code on Take-overs and Mergers.

Correct: In Singapore, all entities carrying out regulated activities under the Securities and Futures Act (SFA) must be licensed or exempt by the Monetary Authority of Singapore (MAS). A non-exchange member (NEM) is primarily regulated by MAS. However, an SGX member is subject to a dual-regulatory framework: they must comply with the statutory requirements set by MAS and the self-regulatory organization (SRO) rules set by the Singapore Exchange (SGX-ST for securities or SGX-DT for derivatives).

Incorrect: The suggestion that NEMs are exempt from MAS Licensing and Conduct of Business Regulations is incorrect as these apply to all Capital Markets Services (CMS) license holders regardless of exchange membership. The claim that NEMs report to SGX while SGX members report to MAS is reversed; NEMs have no direct regulatory reporting line to SGX. The idea that SGX members are exempt from MAS risk management guidelines is false, as MAS guidelines provide the baseline for all financial institutions in Singapore.

Takeaway: Non-exchange members are primarily governed by MAS under the SFA, whereas SGX members are subject to both MAS statutory regulations and SGX self-regulatory rules.

Correct: The Securities and Futures Act (SFA) is designed to provide a comprehensive regulatory framework for the capital markets in Singapore. Its primary objectives are to promote fair, efficient, and transparent markets, which are essential for investor confidence. Additionally, it aims to reduce systemic risk to the financial system and protect the interests of the public by ensuring that market participants adhere to high standards of conduct and disclosure.

Incorrect: The SFA does not prioritize institutional profitability or competitive advantage over market integrity, as suggested in one option. It is also a misconception that the SFA or any regulation can eliminate investment risk or provide capital guarantees for all products; the focus is on fair process and disclosure rather than guaranteed returns. Furthermore, while the industry has self-regulatory aspects, the SFA does not transfer primary enforcement authority away from the Monetary Authority of Singapore (MAS) to private entities.

Takeaway: The SFA’s core mission is to uphold market integrity and investor protection through the promotion of fairness, efficiency, and transparency in Singapore’s capital markets.

Correct: Under Section 23(1)(f) of the Financial Advisers Act (FAA), a person who holds a Capital Markets Services (CMS) license under the Securities and Futures Act (SFA) is exempt from holding a financial adviser’s license. However, as an ‘exempt financial adviser’, the firm and its representatives must still comply with the FAA’s conduct of business requirements, such as Section 27 (having a reasonable basis for recommendations) and relevant MAS Notices when providing financial advisory services to clients.

Incorrect: Option b is incorrect because while the firm is licensed under the SFA, the activity of providing advice falls under the FAA’s conduct requirements. Option c is incorrect because CMS license holders are exempt from the requirement to hold a separate FA license under the FAA’s exemption framework. Option d is incorrect because the application of the FAA is based on the nature of the financial advisory activity (providing advice on investment products) rather than membership status with the Singapore Exchange (SGX).

Takeaway: CMS license holders are exempt from obtaining a separate Financial Adviser’s license but must still adhere to FAA conduct of business rules when providing investment advice in Singapore.

Correct: Under the Securities and Futures Act (SFA) and MAS Guidelines on Individual Accountability and Conduct, firms are required to establish robust internal controls. A comprehensive framework that includes independent reviews and direct reporting to the Board ensures that the firm maintains high standards of conduct, identifies systemic issues early, and fosters a culture of accountability that aligns with MAS expectations for licensed entities.

Incorrect: Relying solely on self-declarations is insufficient as it lacks independent verification of actual conduct. External auditors focus on financial statement accuracy rather than daily regulatory conduct or adherence to the SFA. Selective oversight of only high-value transactions creates a regulatory gap, as misconduct in retail trades can still lead to significant legal and reputational risks for the firm.

Takeaway: Effective MAS compliance requires proactive, independent internal monitoring and Board-level accountability rather than passive self-reporting or selective oversight of transactions.

Correct: In Singapore, the issuance of securities is governed by a dual-framework. The Securities and Futures Act (SFA), specifically Part XIII, regulates the ‘offers of investments’ and sets out the requirements for prospectuses and exemptions. However, the Companies Act remains the primary legislation for corporate governance. Under Section 161 of the Companies Act, directors cannot exercise any power to issue shares without prior approval from the company in a general meeting. Therefore, an issuer must ensure it has the corporate authority under the Companies Act while also complying with the offering rules under the SFA.

Incorrect: Option B is incorrect because the SFA does not supersede the Companies Act; they serve different purposes (market conduct vs. corporate authority). Option C is incorrect because the SFA applies to all offers of securities in Singapore, whether the company is listed or unlisted, unless a specific exemption applies. Option D is incorrect because while many prospectus-related provisions were moved from the Companies Act to the SFA, the fundamental requirements for corporate authority to issue shares (like Section 161) remain in the Companies Act.

Takeaway: Issuers in Singapore must comply with the SFA for offer-related disclosures and the Companies Act for the legal authority to allot and issue shares.

Correct: The Monetary Authority of Singapore (MAS) is the integrated regulator and supervisor of the financial sector in Singapore. Under the Securities and Futures Act (SFA), MAS has the statutory authority to issue Notices, which are legally binding requirements, and Guidelines, which set out principles or best practices. For non-exchange members, MAS is the primary authority responsible for supervising their conduct, licensing, and financial soundness.

Incorrect: The approach of viewing MAS as a consultative body is incorrect because MAS Notices are legally binding, and the Singapore Exchange (SGX) does not set regulatory standards for firms that are not its members. The assumption that MAS only intervenes during systemic failures is incorrect as MAS maintains a proactive, risk-based supervisory approach. Treating MAS as a secondary regulator is incorrect because MAS is the lead regulator for the securities industry under the SFA, whereas ACRA focuses on corporate registration and PDPC handles data protection.

Takeaway: MAS is the central, integrated regulator in Singapore with the power to issue binding rules and supervise the conduct of all capital markets intermediaries under the Securities and Futures Act.

Correct: The Institute of Banking and Finance (IBF) is the national accreditation and certification agency for the financial industry in Singapore. The IBF Standards are a set of competency standards for financial practitioners, developed by the industry for the industry. They provide a common benchmark for professional excellence and are closely aligned with the Skills Framework for Financial Services (SFwFS) to ensure that the workforce remains competent and competitive.

Incorrect: The Monetary Authority of Singapore (MAS), not the IBF, is the regulator responsible for issuing Capital Markets Services (CMS) licenses. While the IBF sets competency standards, these are not legal statutes under the Securities and Futures Act (SFA), nor do they regulate commercial aspects like commission rates. Furthermore, the IBF provides a comprehensive certification pathway, including IBF Qualified and IBF Advanced levels, rather than just entry-level exams.

Takeaway: The IBF Standards provide the national benchmark for professional competency and excellence in Singapore’s financial industry, supporting both entry-level and advanced career development.

Correct: The Securities Industry Council (SIC) is a body established under the Securities and Futures Act (SFA) specifically to perform the function of administering and enforcing the Singapore Code on Take-overs and Mergers. Its role includes giving rulings on the interpretation of the Code and ensuring that all shareholders of a company subject to a take-over are treated fairly and equitably.

Incorrect: The SIC is not a judicial court and does not have the power to impose criminal sentences like imprisonment; such legal proceedings are handled by the Singapore court system. The SIC does not provide commercial services like financial valuations or advisory services to companies, as these are the roles of professional financial advisers. The registration of prospectuses and the approval of listings are functions primarily handled by the Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) respectively.

Takeaway: The Securities Industry Council (SIC) is the regulatory authority responsible for the administration and interpretation of the Singapore Code on Take-overs and Mergers to ensure market integrity and shareholder protection during corporate control changes.

Correct: The Securities and Futures Act (SFA) is designed to provide a comprehensive regulatory framework for the capital markets in Singapore. Its core objectives are to promote fair, efficient, and transparent markets, which are essential for market integrity. By reducing systemic risk and protecting investors through the prevention of market misconduct (such as front-running or insider trading), the SFA fosters the confidence necessary for a thriving financial center.

Incorrect: The SFA does not focus on mandating growth rates for financial institutions, as its role is regulatory and supervisory rather than commercial. It also does not provide a government guarantee for investor losses; investor protection under the SFA relates to fair treatment and market conduct rather than shielding investors from market risk. Furthermore, the SFA supports a competitive market and does not seek to centralize all trading under a government entity, but rather regulates private participants to ensure they act ethically.

Takeaway: The SFA maintains market integrity by fostering a fair, efficient, and transparent regulatory environment that protects investors and reduces systemic risk.

Correct: In Singapore, non-exchange members (NEMs) that are CMS licensees are directly regulated by the Monetary Authority of Singapore (MAS) under the Securities and Futures Act (SFA). Because they do not have a direct membership contract with the Singapore Exchange (SGX), they are not directly bound by SGX Business Rules or subject to SGX’s internal disciplinary processes. Instead, they access the exchange through a Trading Member. In contrast, SGX members are ‘dual-regulated,’ meaning they must satisfy both MAS’s statutory requirements and the self-regulatory organization (SRO) rules set by SGX.

Incorrect: The suggestion that non-exchange members are exempt from MAS conduct of business regulations is incorrect; all CMS licensees must comply with these regulations regardless of their exchange membership status. The claim that non-members require higher base capital specifically because they lack exchange membership is inaccurate, as capital requirements are determined by the type of regulated activities and the risk profile under the SF(FMR)R. Furthermore, non-exchange members do not fall under SGX’s administrative oversight for risk appetite statements, as they have no direct membership relationship with the exchange.

Takeaway: Non-exchange members are primarily accountable to MAS under the SFA, whereas SGX members are subject to both MAS statutory oversight and SGX self-regulatory rules.

Correct: In Singapore, the issuance of securities involves a dual-compliance framework. The Securities and Futures Act (SFA), specifically Part XIII, governs the offering of investments and prospectus requirements to ensure market integrity and investor protection. Concurrently, the Companies Act governs the corporate actions of the issuer. Under Section 161 of the Companies Act, directors cannot issue shares without the prior approval of the company in a general meeting. Therefore, a dealer must ensure the offer meets SFA disclosure standards (or valid exemptions) and that the corporate authority to issue those shares exists under the Companies Act.

Incorrect: The suggestion to prioritize Companies Act disclosure over the SFA is incorrect because the SFA’s prospectus regime is specifically designed to regulate capital markets and generally takes precedence in matters of public offer disclosures. Seeking an MAS exemption to bypass the Companies Act is incorrect because MAS does not have the jurisdiction to waive statutory requirements of the Companies Act regarding internal corporate governance like shareholder approval. Proceeding solely on SFA exemptions is incorrect because SFA exemptions (such as those for accredited or institutional investors) only exempt the issuer from prospectus requirements; they do not negate the legal requirement for directors to have the authority to issue shares under the Companies Act.

Takeaway: Issuers of securities in Singapore must comply with the SFA for offering and disclosure rules and the Companies Act for corporate authority and share issuance procedures, as these statutes operate concurrently and serve different regulatory purposes.

Correct: In Singapore, the Monetary Authority of Singapore (MAS) is the central integrated regulator. While exchange members are subject to dual-tier supervision by both MAS and the Singapore Exchange (SGX), non-exchange members fall under the direct supervision of MAS. These firms must comply with the Securities and Futures Act (SFA) and specific MAS Notices (such as the SFA-N04 on Notice on Reporting of Suspicious Activities) which carry the force of law.

Incorrect: The Accounting and Corporate Regulatory Authority (ACRA) handles business registration and company law but does not act as the financial conduct regulator for securities. SGX only has self-regulatory authority over its own members; it does not supervise non-exchange members. The Securities Industry Council (SIC) specifically administers the Singapore Code on Take-overs and Mergers and is not the general supervisor for securities dealers’ conduct.

Takeaway: MAS acts as the primary and direct regulator for non-exchange member securities dealers in Singapore, ensuring compliance with the Securities and Futures Act.

Correct: The IBF is the national accreditation and certification agency for the financial industry in Singapore. It works with the Monetary Authority of Singapore (MAS) and the industry to develop the IBF Standards and the Skills Framework for Financial Services. These standards represent the professional benchmarks for practitioners. Therefore, the best next step is to map internal training against these established frameworks to ensure that all required functional and core competencies are met for the specific job roles.

Incorrect: Petitioning MAS for a waiver is inappropriate as MAS expects firms to adhere to industry competency standards managed by the IBF. Replacing local training with international modules may lead to a failure in meeting Singapore-specific regulatory and ethical requirements (such as the Securities and Futures Act). Self-certification by dealers is insufficient because the IBF framework requires objective assessment against standardized competency pillars to maintain industry integrity.

Takeaway: The IBF Standards and the Skills Framework for Financial Services are the definitive benchmarks for professional competency in Singapore, and firms must ensure their training programs align with these frameworks to meet regulatory expectations and industry standards.

Correct: Under Section 23(1)(f) of the Financial Advisers Act (FAA), a person licensed under the Securities and Futures Act (SFA) to deal in capital markets products is exempt from the requirement to hold a financial adviser’s license for any financial advisory service that is incidental to their dealing activity. However, as an ‘exempt financial adviser’, the firm must still comply with the FAA’s business conduct requirements, such as Section 27, which requires a reasonable basis for any investment recommendations made to clients.

Incorrect: The approach suggesting a separate license is required is incorrect because the FAA provides specific exemptions for CMS licensees to prevent dual licensing for incidental activities. The approach suggesting the firm is governed exclusively by the SFA is incorrect because the FAA specifically regulates the conduct of financial advice, even for exempt entities. The approach suggesting exemption from conduct requirements is incorrect because being an exempt financial adviser only removes the licensing burden, not the professional conduct and suitability obligations mandated by the FAA.

Takeaway: CMS licensees are exempt from FAA licensing for advice incidental to their dealing business but must still adhere to FAA conduct of business rules when providing such advice.