The FAA optimizes the laws that govern the provision of financial advisory services for investment products, including stocks, futures, and life insurance, into a single piece of legislation. It offers a more versatile and streamlined regulatory structure for companies involved in financial advisory practices.

The types of financial advisory services governed by the FAA are: advice on any investment product other than advice on corporate finance; review or reporting on any investment product; promotion of any mutual fund scheme, including unit trusts; and structure of any life insurance contract.

It shall regulate all financial planning services related to securities, futures, and insurance. Taxation and land planning operations do not fall within their regulatory sphere. Only financial planners conducting FAA-regulated activities are required to be licensed as financial advisers. The financial planner may carry out other activities, such as tax planning, but they are not subject to monitoring of  MAS.

General insurance plans are not considered to be investment products, since they are focused on consumption. Deposit-take products sold by banks are omitted since those items are at the low end of the risk continuum and are usually well known. Loans have no investment factor whatsoever. A structured deposit was approved as an investment option under the FAA with effective from 1st June, 2005.

Banks, investment banks, financial agencies, insurance firms, insurance brokers licensed under the Insurance Act, license holders of stock market facilities under the Securities and Futures Act (Cap 289). They are excluded from obtaining a financial adviser’s license to serve as financial planner in Singapore in support of some financial advice services.

Candidates for a financial advisor’s permit are expected to address such requirements, including, but not limited to, the following: to have adequate financial resources to carry out the planned activities; to have the necessary competence and expertise; and to assure MAS that they would perform their duties effectively, fairly and accurately. Details of the regulatory requirements can be found in the Guidance on Qualifications for the Issuance of a Financial Advisor’s License [Guideline No.]. FAAG01].

The financial adviser’s license is given exclusively to companies since they have more financial capital and are best able to create strict accountability and retain accurate documentation and audit trails.

The license shall expire if the financial adviser: is wound up or terminated, whether in Singapore or somewhere else; has not resumed business in any financial advisory service within 6 months of the permit being issued, or has failed to offer all forms of financial advisory services covered by the license for a continuous duration of 2 months and has not informed MAS of the termination of the business service.

A registered or excluded financial advisor may need to send a note to add an additional category of financial advisory service(s) or investment product(s) to the current type of financial advisory services or investment products of the approved representative in Form 7 to the CoRe framework. For details, please refer to Section 23I of the FAA and FAR Regulation 10.

The yearly license fee payable by the licensed financial adviser shall be $2,000 as set out in the Second Schedule of the FAR. MAS shall inform the applicants of the payment details in the event of approval of the application for the grant of a financial advisor’s license. Please refer to the Guidelines for Licensing Applications, Representative Notification and Payment of Fees [Guideline No. CMG-G01] more details.

The public register on the website of the MAS describes the position of a representative (as designated or temporary delegate) and the type of financial advisory service that each delegate can provide.

(a) The principal shall notify MAS of such termination. Such report should be rendered to MAS in Form 10 by way of the CoRe method no later than the next business day; (b) the designated delegate has ceased to function as such for a continuous duration of one month and his principal has not informed MAS of his termination as such; (c) the MAS has revoked the position of the designated representative; (d) its principal ceases to provide this kind of monetary advisory service. The principal shall notify MAS of such termination by means of Form 5; or (e) the license of its principal lapses, the license shall be revoked by MAS, or a prohibition order shall be issued by MAS against its principal in respect of that type of financial advisory service.

The new principal company must inform MAS of its decision to nominate you as its chosen delegate. This will only be achieved after the dissolution of your contract with the former principal business has taken place.

The money or property of the client must be passed to the operator of the pooled investment scheme; the holder of the capital market services permit under the Securities & Futures Act to offer custodial services for securities approved by the client to accept the money or property of the client; Or an individual exempted under the Securities & Futures Act from having a permit to offer custodial services for securities approved by the firm to accept the money or property of the firm, not later than the business day directly afterward the day on which the licensed financial advisor receives the money or property.

(a) Sending records such as balances and semi-annual reports issued from the custodian and/or the fund manager to their clients; and (b) Holding investor investment data on their own database for the purpose of delivering financial advisory services to their clients.

They need to seek MAS ‘prior permission on a case-by-case basis if they plan to put life insurance liabilities on unregistered overseas insurers. This is to guarantee that no financial planner is used by unregistered foreign insurers to assist them in dealing with Singapore’s domestic dangers. This is since unregistered international insurers are not permitted to indulge in the insurance business in Singapore as an insurer.

There are currently a number of industry groups or organizations in Singapore whose subjects concern the financial consulting sector. MAS shall, where appropriate, contact these business bodies and request their opinions on regulatory issues affects the financial advice market. In addition, the MAS also facilitates business growth and collaborate with industry bodies to boost professional standards.

A business (not being a registered financial advisor or an exempt financial planner pursuant to Sections 23(1)(a) to (e) of the FAA) engaged in delivering guidance, or offering or publishing analyses or reviews on bonds to an authorized investor, Or a person whose business involves the purchase and disposal or holding of financial market products shall be exempt from holding a financial advisor’s license in respect of such activity. Certified financial advisers and exempt financial advisers pursuant to sections 23(1)(a) to (e) of the FAA performing this activity are exempt from the provisions of sections 26 to 29 and 36 of the FAA in regard of such activity.

It is exempt from the provisions of the FAA as long as such operations are carried out with or in conjunction with a contract or agreement made by a bank authorized under the Banking Act or a merchant bank authorized as a financial entity under the MAS Act.

Prospecting investors is a vital part of the practice of a financial planner. Using introducers to produce market leads will encourage financial advisers to spend less time searching for clients. This will encourage financial advisors to concentrate their time on supplying clients with higher value-added financial advice services.

This includes the obligation to report to clients-(a) that they are not permitted to give guidance or suggestions on investment securities, stock Conditions, or plan for life policies; and (b) if they would be remunerated by the financial advisor for the execution of the services and, if so, the sum of compensation if the information is required by the client.

They must enter into a written agreement with an external introducer; track the actions of the initiator in order to guarantee that the initiator provides the clients with the required documents in compliance with Regulation 31 of the FAR; guarantee that the initiator should not treat the money or property of the client in relation to its activities; provide a guide for the use of the introductory operation by the introductory person, and preserve a registry of the designated introductors.

Under the SFA, an individual intending to carry on a business in any controlled activity is allowed to possess a capital market operation (CMS) license for that controlled activity. A CMS license is issued only to a corporation.

The company can continue to retain its license, providing that it goes into operation within 6 months of the date of issue of the permit. If the firm has not begun operation during this six-month span, the license of the firm will expire at the expiration of this time. MAS should be told by the company
Lodging Form 7 of the SF(LCB)R if it is unable to enter into business within a six-month period.

Product financing is a controlled operation of the SFA. Any company engaged in product financing shall be required to hold a CMS license in reference to product financing. A company holding a CMS license to finance a product is generally exempt to hold a Moneylender license. Even so, it will be needed to acquire prior approval from MAS for any other money lending activity.

The donation-based model, which requires no returns, because the funds collected are in the form of gifts. Equity-based scheme, where investors invest in shares owned by a corporation and earn a share of income in the form of a dividend or payout, according to the discretion of the firm.

The operator will be allowed to obtain a CMS license for its invoice factoring operations, which entails the creditor transferring his contractual rights to receive payment from his client on the basis of an invoice to the operator and the operator having to pay the creditor for the sale of the contractual rights to receive payment on the invoice And the operator entering into an arrangement with the investors on its website, in which the shareholders are required to lend a sum of cash to the operator and the operator is obliged to refund the amount (with or without interest or a premium) to the investors.

The ETF and the REIT are collective investment schemes. Unless exempted, individuals engaging in trading in ETFs and/or REITs are expected to possess a CMS license when investing in capital markets goods that are CIS.

Appointed members are expected to meet with the applicable inspection requirements set out in the Notice on Minimum Admission and Review Criteria for Holders of Capital Markets Services Licenses and Excluded Financial Institutions (Notice No. SFA04-N09) as opposed to temporary representatives. Provisional representatives shall be given a maximum of three months to complete the necessary exams applicable to designated members as set out in MAS Notice No. SFA04-N09.

The goals of the one-representative-one-principal rule are: to ensure transparency for citizens as to the position of members, the principles they represent, and, most specifically, where the responsibility for grievances and resolution rests; and to ensure that the principals track and supervise their members closely at all times.