In its enforcement function, SGX investigates alleged misconduct by members, their directors, employees and trading representatives. Where the investigation reveals a possible breach of the SGX rules or bye-laws,disciplinary action may be taken against the offender. SGX initiates disciplinary actions before a disciplinary committee, which may reprimand, fine, suspend and/or expel a member or trading representative.

Where the investigation reveals a possible breach of the SGX rules or bye-laws,disciplinary action may be taken against the offender. SGX initiates disciplinary actions before a disciplinary committee, which may reprimand,fine, suspend and/or expel a member or trading representative. Where the matter also involves a violation of the law, the matter will be referred to the relevant authorities for further action.

In its enforcement function, SGX investigates alleged misconduct by members, their directors, employees and trading representatives. Where the investigation reveals a possible breach of the SGX rules or bye-laws, disciplinary action may be taken against the offender. SGX initiates disciplinary actions before a disciplinary committee, which may reprimand, fine, suspend and/or expel a member or trading representative. Where the matter also involves a violation of the law, the matter will be referred to the relevant authorities for further action.

In its regulation function, SGX conducts annual on-site inspections of its members to ensure that the rules and regulations relating to trading in securities and derivatives are complied with, and that comprehensive internal controls are in place. SGX also monitors the financial health of its members to ensure that they have adequate capital for their operations. Members must file financial reports with SGX periodically.

Listed companies are required to observe the SGX-ST listing rules, which are designed to promote a high standard of disclosure and corporate governance by listed companies. SGX monitors compliance with the listing rules. The listing rules are reviewed periodically to ensure that they meet the changing needs of the market and reflect international best practices.

To ensure adequate and timely disclosure of information, SGX monitors news reports by the media and announcements, financial results and annual reports issued by listed companies. Other regulatory activities include reviewing new and additional listing applications to ensure compliance, reviewing prospectuses, offering memoranda and shareholder circulars for adequacy of disclosure, providing guidance to prospective or listed companies, and dealing with other matters concerning the listing rules.

In its risk management function, the SGX securities and derivatives clearing houses guarantee the contract performance of all trades done on the respective exchanges (SGX-ST or SGX-DT) which are cleared through the clearing members. This allows the clearing members to provide assurance of contract performance to the trading members which in turn provide assurance to their customers.

Sponsors and Registered Professionals are required to maintain adequate systems and resources to discharge their obligations and act with due care in advising Catalist issuers on compliance with the listing rules.

In its clearing risk function, the SGX consults business units, external parties and the regulator closely for greater assurance that the risk framework is effective, relevant and robust.

As collateralization and adequate financial resources are necessary to safeguard the clearing system effectively, the clearing risk department is responsible for developing and implementing the margin framework. It also reviews and enhances the clearing fund structures to support the growth of clearing activities with optimal resources.

The Investment Management Association of Singapore (IMAS) was registered as a society in Singapore on 22 September 1997.
It is a representative body of investment managers spearheading the development and growth of the industry in Singapore.

The main objectives of IMAS are to:
(a) promote professionalism and exemplary practice among its members in their conduct of the investment management business;
(b) provide a forum for its members to discuss issues or matters relating to the investment management industry;
(c) represent its members collectively in discussions with, or assist any member to make any representation or recommendation to, any of its government, government representative, supervisory authority, whether local or foreign, which are concerned with the investment management industry;
(d) promote the education of the investing public on investments and the investment management industry;
(e) improve professionalism and standards of research and fund management expertise in Singapore; and
(f) promote the investment and fund management industry.

IMAS believes that the Code of Ethics and Standards of Professional Conduct are necessary to enhance professionalism of the fund management industry, as well as to reinforce investors’ protection. In this respect, members of IMAS are therefore required to comply with the Code of Ethics and Standards of Professional Conduct, and are encouraged to influence the industry to achieve even higher standards of professionalism.

IMAS Code of Ethics is as follows:
(a) IMAS members shall conduct themselves with integrity and professionalism and act in an ethical manner in all dealings with
the public, clients, employers, employees, regulators and fellow members;
(b) IMAS members shall act with competence and should strive to maintain and improve their competence and that of others in the
profession; and
(c) IMAS members shall exercise due diligence and professional judgement with proper care in the conduct of their business.

The IMAS Standards of Professional Conduct cover the following areas:
(a) investment manager;
(b) business conduct;
(c) client relations; and
(d) investment conduct.

They are committed to being a progressive life insurance industry by collectively enhancing consumer understanding, promoting industry best practices, and through the association fostering a spirit of collaboration and mutual respect with government and business leaders.

Values Underpinning LIA And Its Members
(a) Unified in their resolve to deliver innovative solutions where every individual’s needs are best met;
(b) Professional in the way they conduct themselves and in the counsel they give;
(c) Ethical in ensuring policy owners’ interests are managed with utmost integrity;
(d) Fair in how they strive to provide favourable outcomes to both their policy owners and shareholders;
(e) Open & Honest in all that they do to build an environment of trust and transparency; and
(f) Proactive in the steps that they take to give their people the skills and knowledge to provide sound solutions at all times

The Association of Banks in Singapore (ABS) plays an active role in promoting and representing the interests of the banking community in Singapore. It also works closely with the Monetary Authority of Singapore and other government bodies in supporting their role, in developing and maintaining a sound financial system in Singapore. Formed in 1973, ABS has over the many years, established standards of good practice through benchmarking and setting guidelines to enhance the operational effectiveness of banks in Singapore. It also works with various bodies on projects of mutual benefit to face the challenges of the financial and banking community in Singapore.

Formed in 2001, the Association of Financial Advisers (Singapore) – [AFA(S)] is a trade association representing Financial Advisers in Singapore. The member firms contribute the majority of businesses done by all authorised representatives associated with Financial Advisers in Singapore. AFA(S) was formed primarily to represent licensed Financial Advisers that provide advice on and engage in the sale of Financial Products (Exempt Financial Advisers are Associate members); to provide a forum for its members, to develop opinions, recommendations and educational programmes, which contribute to the further development of the financial services industry for the benefit of the Singapore public.

The FAA consolidates the previous regulatory regimes governing the provision of financial advisory services in respect of securities, futures and life policies, which were contained in three different Acts, namely, Securities Industry Act (“SIA”) (Cap. 289), Futures Trading Act (“FTA”) (Cap. 116) and Insurance Intermediaries Act (Cap. 142A), into a single piece of legislation.

On 1 October 2002, a new legislation known as the Financial Advisers Act (Cap. 110) came into operation to regulate the sale of investment products in Singapore. The FAA consolidates the previous regulatory regimes governing the provision of financial advisory services in respect of securities, futures and life policies, which were contained in three different Acts, namely, Securities Industry Act (“SIA”) (Cap. 289), Futures Trading Act (“FTA”) (Cap. 116) and Insurance Intermediaries Act (Cap. 142A), into a single piece of legislation.

The FAA governs financial advisory activities in respect of investment products and the distribution or marketing of specific functionally similar investment products, namely life insurance policies and collective investment schemes, including unit trusts. It also governs the business conduct of persons providing financial advisory services.

On 1 October 2002, the Financial Advisers Regulations (“FAR”) came into effect as a subsidiary legislation. It is prescribed by the MAS to give effect to the provisions of the FAA and sets out the rules on the application of the FAA. It provides for, among other things, exemptions from the requirements relating to licensing, approval or registration requirements, the application of the provisions under the FAA, and the revocation or variation of any condition or restriction under the FAA.

On 1 October 2002, the Financial Advisers Regulations (“FAR”) came into effect as a subsidiary legislation. It is prescribed by the MAS to give effect to the provisions of the FAA and sets out the rules on the application of the FAA.

The principles underpinning the FAA and the FAR will be discussed in the following subsections.
3.1 Customers’ Interest
3.2 Consistency
3.3 Accountability
3.4 Independence

Financial Advisers must first and foremost, give due regard to the interests of the customers. The provision of financial advice must be conducted in a fair, professional and ethical manner. One practical application of this principle is that financial advisers are required to have a reasonable basis for their recommendations. This is to ensure that due consideration has been given to the person’s investment objectives, financial situation and particular needs.

The first element under this concept is the “Know Your Client” requirement in respect of his financial objectives, risk tolerance, employment status,financial situation, current investment portfolio and number of dependants.

The first element under this concept is the “Know Your Client” requirement in respect of his financial objectives, risk tolerance, employment status,financial situation, current investment portfolio and number of dependants. Subsequently, in conducting a Needs Analysis process, a financial adviser representative should analyse the information provided by the client, and identify appropriate investment products for the client. Proper documentation and record keeping of client information and recommendations should
underpin this process to meet the objective of providing good advice to the customers.

The concept of consistency presents itself in at least two ways. Firstly, consistency must apply to processes for the same product. This means for the same investment product, such as life insurance, advisers from different distribution channels, would be subject to the same rules and standards. Secondly, consistency would apply to similar products. The sale of functionally similar products, such as single premium investment-linked policies and unit trusts, would be subject to similar rules and standards.

The principle of accountability is essential to ensure that there is a higherlevel entity or person who would be accountable for the professional and ethical conduct of a representative of the financial adviser. This principle is captured in the “Representative To Act For Only One Principal” rule under the FAA. Each financial adviser representative can represent only one principal. Hence, if a person is a tied agent, he cannot be a licensed financial adviser representative at the same time.