RES 1B — Rules, Ethics and Skills for Securities Dealers of Non-Exchange Members — is one of the Rules, Ethics and Skills modules within Singapore's Capital Markets and Financial Advisory Services (CMFAS) examination framework administered by IBF. It is designed for representatives of capital markets services licensees who deal in securities and units in collective investment schemes where their principal is not a member of an approved exchange such as SGX-ST. This guide organises 31 substantive concepts across the seven official syllabus domains published by IBF, from industry structure and licensing through market conduct, professional ethics, dealing practices, the CPF Investment Scheme and financial crime prevention. Use it alongside the official IBF study guide: read each concept, test yourself with the scenarios, and work through the revision stages before booking your sitting.
Exam and assessment essentials
- Format
- 60 multiple-choice questions, computer-based[1]
- Duration
- 1.5 hours[1]
- Pass mark
- 75%[1]
- Exemptions
- No exemptions are available because RES 1B is a Rules, Ethics and Skills exam[1]
- Results
- Results are shown on screen after the exam; result slips can be printed from the IBF Portal account from the next business day[1]
- After passing
- Candidates must lodge a notification with MAS before carrying out regulated activities[1]
What the syllabus covers
This study map groups the official scope into revision themes. It is not an official chapter list or a prediction of question weightings.
The capital markets industry in Singapore and its participants
Identify the regulators, licensed and exempt entities, and representative roles that make up the securities dealing landscape, and how a non-exchange-member dealer fits in.[1]
Licensing and business operations
Explain when a capital markets services licence is required, how representatives are registered, and the operational obligations that govern client accounts, moneys and records.[1]
Market conduct
Recognise prohibited market behaviour such as false trading, market rigging, insider trading and misleading statements, and the consequences of breaching them.[1]
Ethics, codes and standards of professional conduct for securities dealing
Apply ethical principles including client priority, conflict management and fair dealing to day-to-day dealing situations.[1]
Securities dealing practices and skills
Handle orders, instructions, documentation and client communications accurately and within authority.[1]
Central Provident Fund Investment Scheme (CPFIS)
Describe how CPF savings may be invested under the scheme and the constraints that apply to CPFIS investments.[1]
Prevention of financial crimes
Apply anti-money laundering, counter-terrorism financing, due diligence, screening and suspicious transaction reporting obligations in client work.[1]
31 key concepts to understand
- Dealing in securities as a regulated activity
- MAS as the conduct and prudential regulator
- Licensed firms, exempt persons and exchange members versus non-members
- The capital markets services licensing framework
- Representative registration and conduct obligations
- Purpose of base capital requirements
- Customer account opening and Know-Your-Client basics
- Protection of customer moneys and assets
- Record keeping and audit obligations
- Advertising and communication standards
- False trading: transactions without a genuine change in beneficial ownership
- Market rigging through price manipulation
- Insider trading: the connected person and information advantage
- Misleading statements and deceptive conduct inducing dealing
- Consequences of market misconduct: administrative, civil and criminal
- Detecting suspicious order patterns as a dealer
- Client's best interests and the primacy of client orders
- Identifying and managing conflicts of interest
- Fair dealing: clear communication and honest representation of risk
- Order types and execution behaviour
- Acting only on authorised instructions
- Trade confirmations and documentation accuracy
- Handling client complaints and escalation
- Purpose and structure of CPFIS
- Eligible CPF accounts and investment scope under CPFIS
- Product restrictions and risk disclosure for CPFIS investments
- The three stages of money laundering
- Terrorism financing and how it differs from money laundering
- Customer due diligence: standard, enhanced and simplified
- Suspicious transaction reporting and the prohibition on tipping off
- Sanctions screening and dealing with prohibited parties
The capital markets industry in Singapore and its participants
1. Dealing in securities as a regulated activity
Under Singapore's securities legislation, dealing in capital markets products such as securities and collective investment scheme units is a regulated activity. Conducting it as a business generally requires authorisation, either a capital markets services licence or another permitted route. Understanding what triggers regulation helps a dealer recognise when conduct falls within the licensed perimeter and when specialist advice or escalation is needed.[1]
Common mistake: Assuming any securities transaction is automatically a regulated activity regardless of whether it is carried on as a business.
The capital markets industry in Singapore and its participants
2. MAS as the conduct and prudential regulator
The Monetary Authority of Singapore is the integrated regulator for the capital markets, overseeing licensing, conduct of business, market misconduct and financial crime controls. Licensed entities and their representatives are accountable to MAS for ongoing compliance, not only at the point of entry. Exchange-level rules add a further layer where the principal is an exchange member, which is why the non-exchange-member module has a distinct syllabus.[1]
Common mistake: Confusing exchange membership obligations with MAS statutory obligations, or assuming both apply identically to every dealer.
The capital markets industry in Singapore and its participants
3. Licensed firms, exempt persons and exchange members versus non-members
Capital markets participants include licensed CMS firms, institutions carrying out regulated activities under exemptions, and entities acting for principals who are or are not members of approved exchanges. The distinction matters because the applicable rules, ethics and skills modules differ: RES 1A serves exchange-member dealers, while RES 1B serves those whose principals are not exchange members. Knowing where your employer sits determines which rulebook governs your conduct.[1]
Common mistake: Choosing a RES module based on job title rather than on the principal's exchange membership status.
Licensing and business operations
4. The capital markets services licensing framework
A firm carrying on a regulated activity as a business must generally hold a capital markets services licence unless an exemption applies. Licensing attaches base capital and operational requirements scaled to the activity's risk. For a dealer, the practical point is that authority to deal flows from the firm's licence: the dealer acts within its scope, and cannot personally create licensing capacity outside it.[1]
Common mistake: Believing an individual representative holds their own licence covering all product types independent of the firm's licensed scope.
Licensing and business operations
5. Representative registration and conduct obligations
Individuals conducting regulated activities on behalf of a licensed firm must be registered as representatives, and their registration is tied to that firm. Registration brings ongoing obligations: acting within the appointing firm's licensed activities, keeping the firm informed of relevant matters, and maintaining fitness and propriety. Representatives cannot simultaneously deal through unregistered channels or for entities outside their appointment without proper arrangements.[1]
Common mistake: Treating registration as a one-off formality rather than a status with continuing conduct obligations.
Licensing and business operations
6. Purpose of base capital requirements
Base capital rules require licensed firms to hold a minimum level of financial resources so they can meet obligations to clients and counterparties even when business conditions deteriorate. The required level varies with the nature and risk profile of the regulated activity. For dealers, this matters indirectly: a firm's financial adequacy underpins the safety of client positions and the firm's ability to honour transactions.[1]
Common mistake: Assuming a single fixed capital figure applies uniformly to every licensed activity.
Licensing and business operations
7. Customer account opening and Know-Your-Client basics
Before dealing for a client, a firm must establish and document the client's identity and understand the account's purpose and risk profile. Account opening controls protect both client and firm: they prevent impersonation, support suitability assessments, and create the baseline records against which future transactions are monitored. Skipping or diluting this step undermines every downstream control, from trade authorisation to financial crime detection.[1]
Common mistake: Treating account opening as paperwork to complete quickly rather than a control that feeds all later obligations.
Licensing and business operations
8. Protection of customer moneys and assets
Money and securities belonging to clients must be kept separate from the firm's own funds and assets so clients are protected if the firm fails. Client moneys generally flow through designated trust arrangements, and firm use of such funds is restricted. A representative should never personally hold or intermediate client money; funds belong in the firm's controlled channels where segregation and reconciliation apply.[1]
Common mistake: Assuming good intentions justify personally handling client payments outside firm-controlled trust arrangements.
Licensing and business operations
9. Record keeping and audit obligations
Licensed firms must maintain accurate books and records of their business, including client transactions, for prescribed retention periods, and make them available for inspection and audit. Records exist to reconstruct what happened, verify client instructions, and support regulatory review. Dealers contribute by documenting instructions, confirmations and approvals contemporaneously, since reconstructed or missing records are treated as control failures.[1]
Common mistake: Relying on verbal understandings or personal notes instead of complete firm records that survive staff turnover.
Licensing and business operations
10. Advertising and communication standards
Marketing communications for securities products must be fair, clear, not misleading, and consistent with the product's features and risks. Promotional material should not overstate returns, disguise risks, or make claims the firm cannot substantiate. Because dealers often communicate product information directly to clients, they carry personal responsibility for ensuring their messages, including informal ones, meet the same standards as formal advertisements.[1]
Common mistake: Applying advertising standards only to official firm campaigns and not to personal or informal client communications.
Market conduct
11. False trading: transactions without a genuine change in beneficial ownership
False trading involves affecting the price of securities through transactions that do not involve a genuine change in beneficial ownership, such as matched trades arranged between parties acting in concert. The prohibition targets artificial activity designed to create a misleading appearance of market interest. Trades must reflect genuine economic intent; arrangements where both sides are controlled by the same interest for appearance purposes are prohibited regardless of stated motive.[1]
Common mistake: Focusing on whether anyone suffered a loss rather than on whether the transaction was genuine in economic substance.
Market conduct
12. Market rigging through price manipulation
Market rigging involves transacting to push a security's price up or down artificially, creating a price level that does not reflect genuine supply and demand. Unlike false trading, rigging can use real transfers of ownership; the vice is the manipulative purpose behind them. Dealers must ensure their orders pursue legitimate client or proprietary objectives and can be explained by genuine investment reasons if questioned.[1]
Common mistake: Assuming manipulation requires fake trades, when real trades executed for a manipulative purpose can also breach the rules.
Market conduct
13. Insider trading: the connected person and information advantage
Insider trading generally occurs when a person who possesses non-public, price-sensitive information about a listed company, typically because of a connection with it, deals in its securities or procures another to do so, or tips others who then deal. The information must be generally unavailable and, if made public, likely to affect the price. The prohibition protects market confidence that all participants trade on equal informational footing.[1]
Common mistake: Believing that merely having information is safe, and that only the actual trading by the insider is prohibited, when procuring or tipping can also constitute offences.
Market conduct
14. Misleading statements and deceptive conduct inducing dealing
Making or disseminating false or misleading statements likely to induce others to buy or sell securities, or to deceive in relation to a dealing, is prohibited. This covers hype-style pump schemes, exaggerated research claims and selective misstatements to clients. A dealer who misdescribes a product's risks or a company's prospects to encourage an order can breach these provisions even without any market-wide scheme.[1]
Common mistake: Thinking only statements to the market at large are covered, when statements to a single client can also be prohibited.
Market conduct
15. Consequences of market misconduct: administrative, civil and criminal
Market misconduct provisions can attract a range of consequences depending on the facts, from administrative actions and civil penalties to criminal prosecution, alongside firm-level discipline such as suspension or termination of the individual's registration. For a dealer, even an unfounded suspicion of misconduct can end a career, which is why borderline situations should be escalated to compliance rather than rationalised.[1]
Common mistake: Assuming small or first-time breaches will be treated as trivial by regulators or employers.
Market conduct
16. Detecting suspicious order patterns as a dealer
Because dealers sit closest to order flow, firms rely on them to notice red flags such as repeated orders that seem economically pointless, coordinated activity across related accounts, or trades clustered to influence a price benchmark. Recognition is a conduct skill: the dealer is not required to prove misconduct, only to recognise warning signs and escalate through the firm's channels for assessment.[1]
Common mistake: Believing the dealer's duty ends with executing valid instructions, without any obligation to notice abnormal patterns.
Ethics, codes and standards of professional conduct for securities dealing
17. Client's best interests and the primacy of client orders
Professional conduct standards require dealers to deal fairly and in clients' best interests, which in practice means prioritising client orders over the firm's or the dealer's own interests, not exploiting information about client activity, and never front-running. When interests conflict, the client's interest prevails unless the conflict is properly disclosed and managed under firm procedures.[1]
Common mistake: Assuming that because a trade is profitable for everyone, order priority is a technicality rather than a core ethical duty.
Ethics, codes and standards of professional conduct for securities dealing
18. Identifying and managing conflicts of interest
Conflicts arise whenever the dealer, the firm or a related party stands to benefit at the client's expense or where duties to different clients collide. Standards require conflicts to be identified early, avoided where possible, disclosed where unavoidable, and managed through controls such as information barriers and independent approvals. Concealment, rather than the existence of a conflict, is the most serious ethical failure.[1]
Common mistake: Treating disclosure of a conflict as optional if the dealer believes the client will not be prejudiced.
Ethics, codes and standards of professional conduct for securities dealing
19. Fair dealing: clear communication and honest representation of risk
Codes of professional conduct expect dealers to explain products accurately, present risks as prominently as potential rewards, and avoid exploiting information asymmetry or a client's inexperience. Fair dealing is judged from the client's perspective: technical accuracy is not enough if the overall impression misleads. It also underpins regulatory expectations on sales conduct and complaint handling.[1]
Common mistake: Measuring fair dealing by what was technically true rather than by the overall impression given to the client.
Securities dealing practices and skills
20. Order types and execution behaviour
Dealers must understand how basic order types behave: a market order seeks immediate execution but accepts prevailing price uncertainty, while a limit order fixes the price boundary but may not execute. Choosing or recommending an order type should reflect the client's priority, speed versus price control, and the dealer must explain execution implications so the client's instruction is genuinely informed.[1]
Common mistake: Placing a market order for an illiquid stock without warning the client that the executed price may differ materially from the last quoted price.
Securities dealing practices and skills
21. Acting only on authorised instructions
A dealer may execute trades only on the client's instruction or under a properly documented discretionary authority. Acting without authority, or beyond its scope, exposes the client to unauthorised losses and the dealer to disciplinary and potentially civil consequences. Verbal instructions should be confirmed and recorded; changes to standing instructions require fresh authority, not assumptions based on past patterns.[1]
Common mistake: Assuming prior client behaviour constitutes standing consent for new trades without documented authority.
Securities dealing practices and skills
22. Trade confirmations and documentation accuracy
After execution, clients must receive accurate confirmations stating the security, quantity, price and charges. Confirmations are contractual records and a client protection mechanism: discrepancies must be corrected promptly and honestly. Dealers should ensure details match the client's instructions and the actual execution, and treat any client query about a confirmation as a priority control matter rather than an administrative nuisance.[1]
Common mistake: Viewing confirmation errors as back-office problems detached from the dealer's own accountability.
Securities dealing practices and skills
23. Handling client complaints and escalation
Complaints must be routed through the firm's formal handling process, documented objectively and answered within the firm's framework; dealers should neither negotiate informal settlements nor discourage clients from escalating. Proper complaint handling preserves evidence, protects both parties, and feeds the firm's monitoring of dealer conduct. A defensive or off-record approach usually worsens outcomes for everyone, including the dealer.[1]
Common mistake: Trying to resolve disputes privately to protect one's own record, undermining the firm's documented process.
Central Provident Fund Investment Scheme (CPFIS)
24. Purpose and structure of CPFIS
The CPF Investment Scheme allows members to invest part of their CPF savings in a range of approved financial products to seek potentially higher long-term returns, subject to scheme conditions. The core trade-off is that invested savings carry market risk that idle CPF savings do not, so dealers dealing with CPFIS clients must understand that returns are not assured and withdrawals are governed by CPF rules.[1]
Common mistake: Presenting CPFIS investing as an upgrade that carries no downside, ignoring the transfer of market risk to the member's savings.
Central Provident Fund Investment Scheme (CPFIS)
25. Eligible CPF accounts and investment scope under CPFIS
CPFIS investments are made from specific CPF accounts, and the products available and conditions applicable depend on the account used and the scheme's rules. Not every CPF account balance or product type is eligible, and amounts available for investment are constrained by scheme parameters that change over time. Dealers should verify current eligibility and limits from authoritative CPF sources rather than relying on memorised figures.[1]
Common mistake: Quoting scheme thresholds or limits from memory, since these are updated periodically and may have changed since training.
Central Provident Fund Investment Scheme (CPFIS)
26. Product restrictions and risk disclosure for CPFIS investments
CPFIS restricts the universe of products to those approved under the scheme, reflecting that these are retirement savings with particular protection objectives. Higher-risk and unsuitable products are excluded or constrained. For dealers, this means recommending within the approved list, checking product risk against scheme rules, and clearly explaining that CPFIS investments do not carry guarantees simply because they sit under a national savings framework.[1]
Common mistake: Implying that CPFIS approval means endorsement of a product's performance or suitability for every member.
Prevention of financial crimes
27. The three stages of money laundering
Money laundering typically proceeds through placement, introducing illicit funds into the financial system; layering, obscuring their origin through chains of transactions; and integration, returning them as apparently legitimate wealth. Dealers interact mainly with layering signals, such as rapid in-and-out securities trades without commercial logic. Understanding the stages helps identify which client behaviours belong to which stage and why early detection matters.[1]
Common mistake: Expecting criminal proceeds to appear obviously dirty, when the whole point of layering is to make funds look ordinary.
Prevention of financial crimes
28. Terrorism financing and how it differs from money laundering
Terrorism financing channels funds, which may be entirely lawful in origin, towards terrorist purposes. Because legitimate money can be misused, origin-based detection used for laundering is insufficient; controls focus on purpose, destination and prohibited parties, supported by sanctions and designated-party lists. Firms must screen not only for dirty money but for any funds flowing toward prohibited ends.[1]
Common mistake: Assuming clean-source funds cannot be suspicious, so screening only for illegitimate origins.
Prevention of financial crimes
29. Customer due diligence: standard, enhanced and simplified
Customer due diligence means identifying and verifying the client and, where relevant, beneficial owners, and understanding the account's intended use. Enhanced due diligence applies to higher-risk situations, such as politically exposed persons or unusual complexity; simplified measures may apply to lower-risk cases. Diligence is risk-based and ongoing: new information during the relationship should prompt re-examination, not just initial one-off checks.[1]
Common mistake: Completing identification checks once and treating the file as permanently cleared, ignoring changes in the client's risk profile.
Prevention of financial crimes
30. Suspicious transaction reporting and the prohibition on tipping off
When a firm knows or suspects that funds relate to criminal activity or terrorism financing, it must file a suspicious transaction report with the relevant authorities. Critically, a person who reports must not disclose to the client or any third party that a report has been or may be made, as tipping off can itself be an offence and can defeat investigations. Dealers should escalate suspicions internally and let compliance handle reporting.[1]
Common mistake: Confronting a client with suspicions directly before or after escalation, which risks tipping off and destroys evidence.
Prevention of financial crimes
31. Sanctions screening and dealing with prohibited parties
Firms must screen clients, related parties and transactions against applicable sanctions and designated-party lists, and must not deal with prohibited persons or in prohibited instruments. Screening applies at onboarding and on an ongoing basis as lists change. A positive match must be frozen from action and escalated immediately; the dealer's role is recognition and escalation, not independent judgment about whether the match is genuinely the same person.[1]
Common mistake: Dismissing a sanctions-list match informally because the dealer assumes it is a coincidence.
How to revise for RES 1B
1. Confirm your module choice and access the official study guide
Verify with your compliance team that RES 1B is correct for your role, meaning your principal is not a member of an approved exchange; if your principal is an SGX-ST member you may need RES 1A, or RES 1B plus the RES 1BE1 add-on, or RES 12B plus RES 1BE1 instead. After registering, log in to the IBF Portal to access the PDF study guide, which is available up to your exam date, and check the study guide updates page so you are using the latest version.
2. Map the seven official syllabus domains and audit your gaps
Write out the seven domains from the IBF syllabus: industry and participants, licensing and business operations, market conduct, ethics and professional conduct, dealing practices and skills, CPFIS, and prevention of financial crimes. Rate yourself honestly on each, and build your schedule around the weakest two or three domains rather than rereading comfortable material.
3. Master market conduct provisions with scenario reasoning
Market misconduct is heavily tested conceptually. For each prohibition, false trading, market rigging, insider trading and misleading statements, write your own one-line test question: what is the prohibited element, and does motive or outcome matter? Practise distinguishing pairs such as false trading versus market rigging, and money laundering versus terrorism financing, since MCQs often hinge on those distinctions.
4. Drill licensing, operations and financial crime controls as a workflow
Learn the client lifecycle as a sequence: account opening and CDD, ongoing monitoring, moneys and records handling, complaints, and suspicious transaction escalation. Recreating the workflow from onboarding to STR filing helps you answer questions about what happens at each stage and who is responsible, which is how many operational questions are framed.
5. Handle CPFIS and ethics domains through practical client dialogue
For CPFIS, focus on the mechanism, eligible structure and risk trade-offs, and avoid memorising specific thresholds that change over time. For ethics, rehearse short client-facing dialogues in your head: how you would disclose a conflict, refuse an unauthorised trade, or explain a product's risks fairly. Applied framing is how ethics questions are usually presented.
6. Finish with timed mock MCQs and error-log review
With 60 questions in 1.5 hours, pace yourself at roughly 90 seconds per question. Sit at least two full-length timed mock papers built from the study guide's own review questions. Keep an error log tagging each miss by syllabus domain, then re-study the two domains with the most misses in the final days. On exam day, flag difficult questions and return to them rather than burning time early.
Test your understanding
These original learning scenarios are for revision; they are not official examination questions.
1. A listed company's external auditor tells her brother-in-law, an active retail investor, that the company's forthcoming results will show a large profit surge. The brother-in-law buys the shares before the results are announced. Who has engaged in potentially prohibited conduct?
Show answer and explanation
Both. The auditor possesses non-public, price-sensitive information through her professional connection with the company, and tipping another person to deal can itself constitute insider trading. The brother-in-law dealt in the securities knowing the information came from an insider, which can also fall within the prohibition. Passing on the tip does not shield either party; each link in the chain of dealing on non-public information is independently problematic.[1]
2. A long-standing client hands his dealer a personal cheque for S$20,000 made payable to the dealer personally, asking her to use it to fund his next purchase. The dealer trusts the client completely. What should she do?
Show answer and explanation
She should decline to accept the cheque personally and direct the client to fund the account through the firm's approved channels. Client money must be protected through the firm's segregated arrangements, not held or intermediated by an individual representative, however trusted the relationship. Personally holding the cheque creates custody, record-keeping and financial crime risks, and exposes both the dealer and the firm to control failures regardless of the client's good faith.[1]
3. A newly onboarded client funds his account with transfers from three unrelated third parties, trades briefly, then instructs payment of proceeds to a fourth party he describes only as a business partner. When the dealer asks for details, the client becomes evasive. What is the dealer's correct next step?
Show answer and explanation
Escalate internally. The pattern matches classic layering behaviour, and evasion on source or destination of funds is itself a red flag requiring enhanced scrutiny. The dealer should document the facts, refer the matter to the firm's compliance function for assessment and possible suspicious transaction reporting, and take no action to alert the client, since tipping off a client about a potential report is prohibited. She should not simply execute the instruction to avoid awkwardness.[1]
Frequently asked questions
Should I take RES 1A or RES 1B for securities dealing?
It depends on your principal's status. RES 1A applies to dealers whose principal is a member of SGX-ST, while RES 1B applies to dealers of non-exchange members whose principal is not a member of an approved exchange. For SGX-ST member principals, the official module combinations also permit RES 1B plus the RES 1BE1 add-on, or RES 12B plus RES 1BE1, as alternatives. Confirm the correct combination with your compliance team or check the IBF register page before registering.[1]
What is the format and passing standard for RES 1B?
Per the official IBF examination details, RES 1B consists of 60 multiple-choice questions taken on computer over 1.5 hours, with a pass mark of 75%. Results appear on screen at the end of the exam, and result slips can be printed from your IBF Portal account from the next business day. Confirm current details on the IBF website when you register.[1]
Are there any exemptions from RES 1B?
No. IBF states that there are no exemptions for RES 1B because it is a Rules, Ethics and Skills exam. Unlike some product knowledge modules where exemptions may be listed in MAS notices, all RES modules in this family must be sat by every candidate, regardless of prior qualifications or experience.[1]
How do I get the RES 1B study guide, and how current is it?
Candidates who register for the examination are given access to a PDF version of the study guide through their IBF Portal account, with access expiring on the day of the registered exam. IBF updates study guides at intervals to reflect industry changes; the updates page shows a RES 1B update in November 2024, so always check you have the latest version before studying.[1][2]
What happens after I pass RES 1B?
Passing RES 1B on its own does not authorise you to deal. IBF states that after successfully completing the relevant examination modules, candidates must lodge a notification with MAS before carrying out regulated activities. You will also typically need to be appointed and registered as a representative through a licensed firm, and for securities dealing you generally need the applicable product knowledge module alongside the RES module, as set out in the IBF module combinations.[1]
Official sources and review notes
Public IBF and SCI sources were checked on 16 September 2026 for syllabus scope and assessment details, with additional primary references where listed. References identify the relevant syllabus or subject source; explanations and examples are original teaching material. This guide selects important concepts and does not replace the full official study text. Confirm the applicable edition and any updates with the administrator before your assessment.