RES5 Ch.1 Full Facts

🏛️Adviser Taxonomy

Licensed vs exempt vs excluded financial advisers; who needs a licence.

The Financial Advisers Act 2001 came into operation on 1 October 2002 to regulate the sale of investment products in Singapore.1 October 2002 — Ch. 1, p. 4
⚠ FAA 2001 in the name; commenced 1 Oct 2002.
Under Section 6(1) of the FAA, no person shall act as a financial adviser in respect of any financial advisory service unless authorised to do so by a financial adviser's licence, or is an exempt financial adviser. — Ch. 1, p. 7
⚠ To act as an FA a person must be licensed OR exempt — nothing else suffices.
Under Section 2(1) of the FAA, a 'financial adviser' means a person who carries on a business of providing any financial advisory service, but does not include any person specified in the First Schedule. — Ch. 1, p. 7
For the purposes of the definition of a financial adviser, 'person' refers to a corporation and not an individual. — Ch. 1, p. 7
⚠ A licensed FA is a corporation; individuals are representatives, not FAs.
Section 20(1) of the FAA exempts certain persons from holding a financial adviser's licence to act as a financial adviser in respect of any financial advisory service. — Ch. 1, p. 7, 8
An exempt financial adviser carries on a business of providing financial advisory services but is exempted from the requirement to hold a financial adviser's licence; it is therefore distinct from an excluded financial adviser, which does not fall within the definition of a financial adviser at all. — Ch. 1, p. 7
⚠ Exempt = an FA that need not hold a licence. Excluded = not an FA at all.
Under the First Schedule of the FAA, certain persons are defined as 'excluded financial advisers' and do not fall within the definition of 'financial adviser' under the FAA. — Ch. 1, p. 8
⚠ Excluded ≠ exempt. Excluded persons are not FAs under the FAA.
The FAA consolidated the previous regulatory regimes contained in three different Acts — the Securities Industry Act, the Futures Trading Act (FTA) and the Insurance Intermediaries Act — into a single piece of legislation. — Ch. 1, p. 4
⚠ The three consolidated Acts: Securities Industry Act, Futures Trading Act, Insurance Intermediaries Act.
The FAA governs financial advisory activities in respect of investment products, the distribution or marketing of functionally similar investment products (namely life insurance policies and collective investment schemes including unit trusts), and the business conduct of persons providing financial advisory services. — Ch. 1, p. 4
Under Section 18(1) of the FAA, no person shall hold himself out to be a financial adviser unless he is a licensed financial adviser, an exempt financial adviser or a person specified in the First Schedule. — Ch. 1, p. 7
Persons exempt under Section 20(1) include a bank licensed under the Banking Act 1970, a merchant bank licensed under the Banking Act 1970, a company or co-operative society licensed under the Insurance Act 1996, a holder of a capital markets services licence under the SFA 2001, a finance company granted exemption under the Finance Companies Act 1967, and an approved exchange, recognised market operator or approved holding company (where incidental). — Ch. 1, p. 7, 8
⚠ Banks and insurers are exempt FAs — exempt from the licence, but NOT unregulated.
Excluded financial advisers include advocates and solicitors, law practices and public accountants (where the advisory service is solely incidental to their legal or accounting practice), trust companies (where solely incidental), newspaper proprietors and electronic/broadcasting information services (subject to conditions), credit rating services, public statutory corporations, approved trustees, the Official Assignee, the Public Trustee, liquidators/receivers, and certain approved foreign companies. — Ch. 1, p. 8, 9
⚠ An accountant giving investment comments incidental to tax work falls within the excluded category.

💬Financial Advisory Services

What counts as a financial advisory service (Second Schedule).

The types of financial advisory service regulated under the FAA are: advising others concerning any investment product (other than advising on corporate finance within the meaning of the SFA 2001); advising others by issuing or promulgating research analyses or research reports concerning any investment product; and arranging any contract of insurance in respect of life policies, other than a contract of reinsurance. — Ch. 1, p. 10
⚠ Corporate finance advice and reinsurance arranging are NOT regulated FA services.

📦Investment Products

Products regulated under the FAA vs excluded products.

Under Section 2(1) of the FAA, an 'investment product' means any capital markets products, spot foreign exchange contracts other than for the purposes of leveraged foreign exchange trading, any life policy, or any other products as may be prescribed. — Ch. 1, p. 10
⚠ A life policy IS a regulated investment product.
General insurance policies, deposit-taking products, and loans and mortgages are excluded from the definition of investment products. — Ch. 1, p. 11
⚠ Excluded: general insurance, deposits, loans/mortgages. NOT life policies or unit trusts.
'Capital markets products' means any securities, units in a collective investment scheme, derivatives contracts, spot foreign exchange contracts for the purposes of leveraged foreign exchange trading, and such other products as the MAS may prescribe. — Ch. 1, p. 10
⚠ Leveraged FX is a capital markets product; non-leveraged spot FX is a separate limb of 'investment product'.
A structured deposit has been classified as an investment product with effect from 2 December 2005.2 December 2005 — Ch. 1, p. 11
⚠ Structured deposit = investment product (not an excluded deposit-taking product).
General insurance policies are excluded because they are consumption-based; deposit-taking products are excluded because they are at the low end of the risk spectrum and well understood; loans and mortgages are excluded because they have no investment element and relate more to liability management. — Ch. 1, p. 11

💰Accredited Qualified Investors

Definitions and thresholds for accredited and qualified investors.

An 'accredited investor' includes an individual whose net personal assets exceed S$2 million, or whose financial assets (net of related liabilities) exceed S$1 million, or whose income in the preceding 12 months is not less than S$300,000; and a corporation with net assets exceeding S$10 million.individual net personal assets: S$2 million; individual financial assets: S$1 million; individual income 12m: S$300,000; corporation net assets: S$10 million — Ch. 1, p. 15, 16
⚠ Individual AI: >S$2m net personal assets OR >S$1m financial assets OR ≥S$300k income. Corporation: >S$10m net assets.
A 'qualified investor' is defined by reference to an accredited investor (subject to specified carve-outs) together with additional categories such as institutional investors and certain collective investment schemes, closed-end funds and limited partnerships comprising accredited or institutional investors. — Ch. 1, p. 16, 17
⚠ Qualified investor is built on the accredited-investor definition plus extra categories — not identical to it.

🪪Exempt Persons

Prerequisites, conduct and representations of exempt persons.

An exempt person, including its representatives, cannot represent itself, nor cause itself to be represented, to any person as being licensed, regulated, supervised or registered by the MAS, whether verbally or in writing. — Ch. 1, p. 14
⚠ Exempt ≠ licensed. An exempt person must not present itself as MAS-licensed.
To demonstrate minimum financial viability, an exempt person is expected to ensure that it is able to pay its debts in full as they fall due and that the value of its assets is not less than the value of its liabilities (including contingent liabilities) at all times. — Ch. 1, p. 14
An exempt person is required to conduct its own due diligence to verify that its clients are of qualified or accredited status, and the due diligence checks should be supported by documentary evidence for a proper audit trail. — Ch. 1, p. 18
The FAA provides for a category of persons to be exempted from holding a financial adviser's licence. — Ch. 1, p. 13
Fulfilment of the minimum expectations does not necessarily imply that an entity satisfies all the criteria expected of an exempt person, and the MAS reserves the right to require an exempt person to fulfil additional requirements or put in place further safeguards. — Ch. 1, p. 14

🏷️Protected Terms

Restrictions on using 'financial adviser', 'life insurance broker' and 'independent'.

Under Section 17(1) of the FAA, no person other than a licensed financial adviser, an exempt financial adviser, or a person (or class of persons) approved by the Authority shall use the words 'financial adviser' (or any word indicating that it carries on business as a financial adviser) in its business name, description or title, or make any such representation in any bill head, letter, notice, advertisement, publication or writing. — Ch. 1, p. 18
No licensed or exempt financial adviser shall use the word 'independent' (or any derivative or like expression) in its name, to promote or advertise its services, or in respect of its provision of any financial advisory service, unless it meets all three conditions: it receives no commission or benefit from a product provider (and pays none to its representatives) that may create product bias; it operates free from any direct or indirect restriction relating to any investment product recommended; and it operates without any conflict of interest created by connection or association with any product provider. — Ch. 1, p. 19, 20
⚠ All three conditions must be met to use 'independent'.
Although independence has been considered by many to be an important condition for customer interests, experience from other established markets has not borne this out; it is considered more important that representatives put customers' interests at the forefront by giving good objective advice guided by the concept of reasonable basis. — Ch. 1, p. 6
⚠ Independence is a discussed principle, NOT a requirement to advise — the regime relies on reasonable basis; only the use of the word 'independent' is regulated.
An appointed or provisional representative of a licensed or exempt financial adviser, or a representative of an exempt financial adviser referred to in Section 20(1)(f) or (g), is not prohibited from using the words 'financial adviser' together with the word 'representative' (or another word indicating that he is a representative of a financial adviser). — Ch. 1, p. 18
No person other than a licensed financial adviser authorised by its licence to provide financial advisory services in respect of life policies, an exempt financial adviser providing such services, or a person approved by the Authority, shall use the words 'life insurance broker' (or any derivative) in its business name, description or title or in any representation. — Ch. 1, p. 18, 19
No representative of a licensed or exempt financial adviser shall use the word 'independent' (or any derivative or like expression) in acting as a representative of the financial adviser if the financial adviser has informed him that it may not do so. — Ch. 1, p. 20
The principles and guidelines on the determination of 'independent' are laid down in Regulation 21 of the FAR and the Guidelines On The Use Of The Term 'Independent' By Financial Advisers (Guideline No: FAA-G05). — Ch. 1, p. 6

📋Rnf And Public Register

Representative Notification Framework and the public register.

The MAS launched the Representative Notification Framework (RNF) on 26 November 2010; under the RNF, a financial institution intending to appoint a financial adviser representative must lodge a notice of intent with the MAS and provide a 'fit and proper' certification in respect of that representative.26 November 2010 — Ch. 1, p. 21
⚠ RNF launched 26 Nov 2010.
Before 26 November 2010, each representative of a financial adviser had to be himself licensed to engage in the activity for which his principal held a licence; from 26 November 2010, with the introduction of the RNF, representatives no longer need to be individually licensed. — Ch. 1, p. 21
Under the RNF, the onus is on principals to accept only fit and proper individuals as their representatives, placing a heavier emphasis on the role and responsibilities of principals to ensure that their representatives are fit and proper. — Ch. 1, p. 21
The RNF regime applies to individuals carrying out financial advisory activities as representatives of licensed financial advisers and of financial advisers exempted by the FAA from applying for a licence (including banks, merchant banks, finance companies, insurance companies, insurance brokers registered under the Insurance Act, and holders of a capital markets services licence under the SFA 2001). — Ch. 1, p. 21
The RNF regime does not apply to entities which are exempt from licensing pursuant to regulations issued under the FAA (Section 20), such as fund managers who serve no more than 30 qualified investors or financial advisers who serve no more than 30 accredited investors.30 investors — Ch. 1, p. 21
⚠ RNF does NOT apply to entities exempt under s.20 (e.g. serving ≤30 qualified/accredited investors).
Under the RNF, representatives providing financial advice have their names recorded on a Public Register of Representatives established under Section 73 of the FAA, and the MAS ceases to issue licences to representatives of licensed financial advisers. — Ch. 1, p. 22
Under Section 73(1) of the FAA, the MAS keeps records for each appointed and provisional representative of: his or her name; the name of the current and every past principal; the current and past types of financial advisory service and the dates of commencement and cessation; any name/style if the principal's business is carried on under a different name; disciplinary proceedings or action taken and published under Section 77; and such other information as may be prescribed. — Ch. 1, p. 22

👤Representative Definition

Who is a representative and what the term covers.

The principle of accountability is captured in the 'Representative To Act For Only One Principal' rule: each financial adviser representative can represent only one principal, and the principal is responsible for developing, supervising and monitoring the conduct of its representatives at all times. — Ch. 1, p. 6
⚠ A tied agent cannot be a licensed FA representative at the same time.
Representatives are individuals who actually perform the activities that their principals are engaged in and for which they are regulated by the MAS under the FAA. — Ch. 1, p. 22
⚠ Representatives are individuals; the financial adviser (principal) is a corporation.
Under Section 2(1) of the FAA, a 'representative' means a person, by whatever name called, in the direct employment of, or acting for or by arrangement with, a financial adviser, who performs on behalf of the financial adviser any financial advisory service, whether or not he is remunerated, and includes any officer of the financial adviser who performs such services. — Ch. 1, p. 22, 23
⚠ A person can be a representative whether or not remunerated.

☝️One Principal Rule

The rule that a representative acts for only one principal, its exception and penalty.

Under Section 27(1) of the FAA, unless otherwise approved by the MAS in writing, no appointed representative or provisional representative shall at any one time be a representative of more than one principal. — Ch. 1, p. 23
⚠ One principal only, unless the MAS approves otherwise in writing.
An appointed representative may be a representative of more than one principal if the principals are related corporations. — Ch. 1, p. 23
⚠ Exception to the one-principal rule: multiple principals allowed if they are related corporations.
The objectives of the one-principal rule are two-fold: to secure clarity for investors about the status of representatives, the financial advisers they represent and where responsibility rests for complaints and redresses; and to ensure that financial advisers closely monitor and supervise their representatives at all times. — Ch. 1, p. 23

👥Representative Types

Appointed vs provisional representatives; criteria and cessation.

The FAA provides for two classes of representatives — appointed and provisional. — Ch. 1, p. 24
Appointed representatives are persons who meet in full the entry and examination requirements prescribed by the MAS in the Notice on Minimum Entry and Examination Requirements for Representatives of Licensed Financial Advisers and Exempt Financial Advisers (Notice No: FAA-N13). — Ch. 1, p. 24
⚠ Appointed rep = has met entry AND examination requirements in full.
Provisional representatives are persons who meet the entry requirements but have not yet passed the relevant examinations; as a policy they are given a grace period of three months to pass the requisite examinations, and this category was introduced to accommodate the relocation of experienced individuals currently licensed in an overseas jurisdiction.3 months (grace period) — Ch. 1, p. 24
⚠ Provisional rep = entry met, exams NOT yet passed; 3-month grace period.
No individual will be allowed to act as, or hold himself out as, a representative of a financial adviser unless he meets the entry and examination requirements specified by the MAS for the relevant type of financial advisory service and his name is entered in the Public Register for the FAA. — Ch. 1, p. 25
Individuals who wish to provide financial advisory services on behalf of a licensed financial adviser or an exempt financial adviser under Section 20(1)(a) to (e) of the FAA are required to be appointed as an appointed or provisional representative in respect of that type of financial advisory service. — Ch. 1, p. 24
Section 22(1) of the FAA provides that no person shall act as a representative in respect of any type of financial advisory service (or hold himself out as doing so) unless the person is an appointed or provisional representative in respect of that type of service, or a representative of an exempt financial adviser referred to in Section 20(1)(f) or (g). — Ch. 1, p. 25
Section 22(5) of the FAA provides that a principal shall not permit any individual to provide any type of financial advisory service on its behalf unless the individual is an appointed or provisional representative in respect of that type of service, or the principal is an exempt financial adviser under Section 20(1)(f) or (g) and the scope and manner of the service match. — Ch. 1, p. 25, 26
Under Section 23(1) of the FAA, an appointed representative is an individual who satisfies the entry and examination requirements (notified to the MAS), whose name is entered in the public register as an appointed representative, whose status has not currently been revoked, suspended or prohibited, whose register entry indicates he is appointed and has not ceased, and whose principal is licensed or is exempt under Section 20(1)(a)-(e). — Ch. 1, p. 26
Under Section 23(4) of the FAA, an individual ceases to be an appointed representative on the date that: he ceases to be the principal's representative or to provide that service (notified to the MAS); the principal ceases to provide that type of service; the principal's licence is revoked or lapses or a prohibition order under Section 68 is made against the principal; the individual dies; or such other prescribed circumstances occur. — Ch. 1, p. 27
Under Section 24(1) of the FAA, a provisional representative is an individual who satisfies the entry requirements, intends to undergo an examination to satisfy the examination requirements (notified to the MAS), is entered in the public register as a provisional representative, has not had that status revoked/suspended/prohibited, has a principal that is licensed or exempt under Section 20(1)(a)-(e), has not previously been appointed as a provisional representative by the MAS, and is not otherwise disqualified. — Ch. 1, p. 28
⚠ A provisional rep must NOT have previously been appointed as a provisional rep.
Under Section 24(3) of the FAA, a provisional representative shall immediately cease to be one upon the expiry of the period specified by the MAS; if he fails to comply with any condition or restriction imposed under Section 31; upon his principal informing the MAS of his satisfaction of the examination requirements; or on the occurrence of such other prescribed circumstances. — Ch. 1, p. 29
Under Section 24(5) of the FAA read with Regulation 4B(2) of the FAR, where a provisional representative has satisfied the examination requirements, his principal shall inform the MAS of this fact in the prescribed form and within the three-month grace period.3 months (grace period) — Ch. 1, p. 29
Appointed representatives are required to satisfy the minimum entry and examination requirements set out in Notice FAA-N13, and their status as an appointed representative is valid until it ceases under the circumstances described in the chapter. — Ch. 1, p. 30
A provisional representative can continue to provide financial advisory service as an appointed representative after his principal has notified the MAS (within the three-month grace period) of his fulfilment of the relevant examination requirements via a one-time lodgement of Form 3D, and his name has been entered in the Public Register as an appointed representative. — Ch. 1, p. 30
⚠ Provisional → appointed conversion uses a one-time lodgement of Form 3D.
Under Section 23(5) of the FAA, an individual shall not be treated as an appointed representative during the period in which the licence of his principal is suspended. — Ch. 1, p. 27

🧑‍⚖️Fit And Proper

Fit and proper criteria applied to advisers, exempt persons and representatives.

An exempt person must be fit and proper, satisfying the MAS on honesty, integrity and reputation; competence and capability; and financial soundness (per Guidelines FSG-G01); this requirement must be met on an ongoing basis and also applies to the exempt person's substantial shareholders, decision-makers, directors and representatives. — Ch. 1, p. 13, 14

📨Notification Procedure

Documents lodged, entry into register, retention, change notifications.

Under Section 26(1) of the FAA, a principal who desires to appoint an individual as an appointed or provisional representative shall lodge with the MAS a notice of intent to appoint the individual, a certificate that the individual is a fit and proper person, and (in the case of a provisional representative) an undertaking by the principal to undertake such responsibilities as may be prescribed. — Ch. 1, p. 31
⚠ The undertaking is required only for a provisional representative.
Under Regulation 4A(4) of the FAR, a principal must undertake responsibilities for its provisional representatives including: properly supervising their activities and conduct; providing proper training so the representative understands and complies with relevant Singapore laws; ensuring the representative is accompanied at all times by an authorised person when meeting any client; ensuring the representative sends concurrently to authorised persons all email sent to clients; and ensuring the representative does not communicate by telephone with clients except by telephone conference in the presence of an authorised person. — Ch. 1, p. 32, 33
⚠ Provisional reps get ENHANCED supervision — must be accompanied when meeting clients; cannot meet clients alone.
The MAS may refuse to enter the particulars of a representative in the public register of representatives if the fee referred to in Section 28(1) or (3) of the FAA is not paid. — Ch. 1, p. 31

🚫Mas Powers Refuse Revoke

MAS grounds to refuse entry / revoke / suspend representative status.

Under Section 30(1)(a) to (f) of the FAA, the MAS may refuse to enter, or may revoke or suspend, an individual's status as an appointed or provisional representative if: the individual fails or ceases to act as a representative for all notified services; the individual or principal has not provided required information; the individual is an undischarged bankrupt (in Singapore or elsewhere); an enforcement order for a judgement debt has been returned unsatisfied; the individual has entered a compromise or scheme of arrangement with creditors still in operation; or the individual has been convicted of a fraud or dishonesty offence, or of an offence under the FAA. — Ch. 1, p. 33
⚠ A conviction for dishonesty overseas is a valid ground for MAS to revoke/refuse — not limited to Singapore offences.
Under Section 30(1)(g) of the FAA, the MAS may also refuse entry (or an additional service type) where it is not satisfied as to the individual's educational or other qualification or experience; the individual or principal fails to satisfy the MAS that the individual is fit and proper; the MAS is not satisfied as to the individual's record of past performance or expertise; or the MAS has reason to believe the individual will not perform that type of service efficiently, honestly or fairly. — Ch. 1, p. 34
For provisional representatives, the MAS may refuse entry if the individual is not (or was not previously) licensed, authorised or regulated in a foreign jurisdiction for a continuous period of at least 12 months; if the period between the individual ceasing to be so regulated and the proposed appointment exceeds 12 months; or if the MAS is not satisfied that the laws and practices of the jurisdiction provide protection to investors.12 months — Ch. 1, p. 34
⚠ Both the minimum experience (≥12 months) and the recency (gap not exceeding 12 months) are tested.

⚖️Conditions False Statements Appeals

MAS power to impose conditions, false-statement offence, appeals.

Under Section 33 of the FAA, any person aggrieved by the MAS's refusal under Section 30(1) to enter their particulars (or an additional service type) in the public register, or by the revocation or suspension of their status as an appointed or provisional representative under Section 30(1) or (2)(a), may appeal to the Minister within 30 days after being notified of the MAS's decision, and the Minister's decision shall be final.30 days — Ch. 1, p. 35
⚠ Appeal to the MINISTER within 30 days; the Minister's decision is final.
Section 31 of the FAA empowers the MAS to impose conditions or restrictions on a financial adviser's representative. — Ch. 1, p. 35
Under Section 32(4) of the FAA, a person is not guilty of the false-statement offence if he proves that he made all inquiries that were reasonable in the circumstances and, after doing so, believed on reasonable grounds that the statement made or the omission was not false or misleading. — Ch. 1, p. 35
⚠ There is a reasonable-inquiries / reasonable-belief defence to the false-statement offence.

🧭Principles Faa Far

Underlying principles: customers' interest, consistency, accountability, independence.

The Financial Advisers Regulations (FAR) came into effect on 1 October 2002 as subsidiary legislation prescribed by the MAS to give effect to the provisions of the FAA and set out the rules on the application of the FAA.1 October 2002 — Ch. 1, p. 5
⚠ FAR is subsidiary legislation giving effect to the FAA.
Financial advisers must give due regard to the interests of customers and are required to have a reasonable basis for their recommendations, ensuring due consideration of the person's investment objectives, financial situation and particular needs. — Ch. 1, p. 5
The principles underpinning the FAA and the FAR are customers' interest, consistency, accountability and independence. — Ch. 1, p. 5
⚠ Four principles: customers' interest, consistency, accountability, independence.
The 'Know Your Client' requirement covers the client's financial objectives, risk tolerance, employment status, financial situation, current investment portfolio and number of dependants, after which a Needs Analysis is conducted to identify appropriate products. — Ch. 1, p. 5
Consistency applies in two ways: the same investment product (e.g. life insurance) sold through different distribution channels is subject to the same rules and standards; and functionally similar products (e.g. single premium investment-linked policies and unit trusts) are subject to similar rules and standards. — Ch. 1, p. 6
The mission of the Monetary Authority of Singapore (MAS) is to sustain non-inflationary economic growth and promote a sound and progressive financial services sector. — Ch. 1, p. 4
The FAR provides, among other things, for exemptions from the requirements relating to licensing, approval or registration, the application of the provisions under the FAA, and the revocation or variation of any condition or restriction under the FAA. — Ch. 1, p. 5

📝Licence Application

Application, grant, refusal and minimum financial / PII requirements.

An application for the grant of a financial adviser's licence shall be made to the MAS in Form 1, in the manner prescribed, and accompanied by a non-refundable application fee of a prescribed amount. — Ch. 1, p. 11
⚠ Application is in Form 1 with a non-refundable fee.
In assessing an application for a financial adviser's licence, the MAS considers the track record, management expertise and financial soundness of the applicant and its parent/major shareholders; the ability to meet minimum financial and professional indemnity requirements; the strength of internal compliance systems; business plans and projections; and fitness and propriety. — Ch. 1, p. 11, 12
To satisfy the fitness and propriety factor, the applicant must satisfy the MAS that it is a fit and proper person, that all of its directors and chief executive officer are fit and proper to hold office, and that all of its substantial shareholders and representatives are fit and proper persons. — Ch. 1, p. 12
With effect from 26 November 2010, existing financial adviser's licences no longer have to be renewed; once issued, a licence continues to be valid subject to payment of an annual licence fee, unless the licence holder ceases to carry on the regulated activities, the licence lapses, or the licence is revoked or suspended by the MAS.26 November 2010 — Ch. 1, p. 12
⚠ No renewal since 26 Nov 2010 — an annual licence fee keeps it valid.
Under Section 8(2)(b) of the FAA, a 'Professional Indemnity Insurance policy' means a contract of insurance with an insurer under which a person is indemnified in respect of the liabilities arising out of or in the course of his business as a financial adviser. — Ch. 1, p. 12
Under Section 9(1) of the FAA, a licensed financial adviser shall at all times during the currency of its licence maintain the prescribed minimum financial requirements and have in force a Professional Indemnity Insurance policy with the prescribed limit and deductible (or another measure approved by the Authority in lieu). — Ch. 1, p. 12, 13
Under Section 8(4) of the FAA, the Authority may refuse an application for the grant of a financial adviser's licence, without giving the applicant an opportunity to be heard, where the applicant is in the course of being wound up or otherwise. — Ch. 1, p. 13
⚠ Being wound up = refusal WITHOUT opportunity to be heard.
Section 8(1) of the FAA states that the MAS may refuse an application for the grant of a financial adviser's licence. — Ch. 1, p. 13
Regulation 15 of the FAR provides that, for the purposes of Section 8(1)(b) of the FAA, the applicant shall meet the prescribed minimum financial requirements for the grant of a financial adviser's licence. — Ch. 1, p. 13

⏱️Key Numbers Deadlines

All hard numbers: time periods, ages, amounts, investor caps, fines.

In the case of an exempt fund manager who is also an exempt financial adviser, the total number of qualified investors and accredited investors served should not exceed 30 in total.30 investors (qualified + accredited combined) — Ch. 1, p. 13
⚠ Cap is 30 qualified + accredited investors in total.
To be an appointed representative, an individual must be at least 21 years old, satisfy the minimum academic qualification and examination requirements (Notice FAA-N13), satisfy the fit and proper criteria (Guideline FSG-G01), and meet any other criteria stipulated by the MAS.21 years old (minimum age) — Ch. 1, p. 24
⚠ Minimum age to be an appointed rep is 21.
Under Section 23(8) of the FAA read with Regulation 12A of the FAR, a principal shall, no later than the next business day after an individual ceases to be its representative or ceases to provide the relevant type of financial advisory service, provide particulars of such cessation to the MAS in the prescribed form and manner.next business day deadline — Ch. 1, p. 28
⚠ Cessation of a rep = notify by NEXT BUSINESS DAY (not 14 days).
Under Section 24(2) of the FAA read with Regulation 4B(1) of the FAR, an individual shall only be a provisional representative for a period not exceeding three months from the date his name is entered in the public register of representatives.3 months (maximum) — Ch. 1, p. 29
⚠ Provisional rep: max 3 months. Don't confuse with the 12-month overseas experience requirement.
A provisional representative must be currently or previously licensed, authorised or otherwise regulated for at least 12 months (and not more than 12 months ago) in relation to a comparable type of financial advisory service in an overseas jurisdiction with a regulatory regime comparable to that of Singapore; during the three-month grace period they may provide financial advisory services, and the principal must undertake to properly supervise them.12 months (comparable overseas regulation) — Ch. 1, p. 30
⚠ Provisional rep generally needs ~12 months comparable overseas regulation (and it must be recent, within 12 months).
Under Regulation 4A(3) of the FAR, a principal who submits a certificate must keep copies of all information and documents which the principal relied on in giving the certificate for a period of five years from the date of lodgement.5 years — Ch. 1, p. 32
⚠ Retention = 5 years from LODGEMENT (not from resignation; not 7 years).
Where a change occurs in any particulars of an appointed or provisional representative in any document required to be furnished to the MAS, the principal shall, no later than 14 days after the occurrence of the change, furnish particulars of the change to the MAS in the prescribed form (Form 18).14 days — Ch. 1, p. 32
⚠ Change in particulars = within 14 days (Form 18). Cessation = next business day.
An exempt person must maintain its operations in Singapore with adequate resources including compliance arrangements; it is expected to operate from an office premise, is strongly encouraged to employ a minimum of two professionals each with at least five years of relevant working experience in reputable jurisdictions, and should have at least one resident CEO or executive director exercising management oversight.2 professionals (each ≥5 years experience) — Ch. 1, p. 14
⚠ Two professionals, each ≥5 years experience — 'strongly encouraged', not strictly mandatory.
Under Regulation 8A of the FAR (for Section 23(4)(e)), unless the MAS has revoked or suspended the status, an individual ceases to be an appointed representative for all types of financial advisory service if, before the end of 6 months (or a longer period allowed by the MAS) from the date his name was entered in the register, he has not commenced to act in at least one of the services he was appointed to provide; or if he has ceased to act and has not resumed acting for a continuous period of one month from cessation and his principal has not notified the MAS.non commencement: 6 months; non resumption: 1 month — Ch. 1, p. 27
⚠ 6 months to commence; 1 month non-resumption triggers cessation.

💸Penalties Offences

Offence provisions and maximum fines / imprisonment.

Under Section 32(1) of the FAA, if a principal or an individual lodges any document to the MAS and makes a statement that is false or misleading, or omits to state any material matter without which the document is misleading, that person is guilty of an offence and liable on conviction to a fine not exceeding S$50,000.S$50,000 maximum fine — Ch. 1, p. 35
⚠ False-statement fine = up to S$50,000.
Any person who contravenes Section 17(1) or 17(3) is guilty of an offence and liable on conviction to a fine not exceeding $12,500 and, in the case of a continuing offence, to a further fine not exceeding $1,250 for every day or part of a day during which the offence continues after conviction.fine: $12,500; daily continuing: $1,250 — Ch. 1, p. 19
⚠ Term misuse fine = $12,500 (+$1,250/day). Do not confuse with S$25,000 or S$50,000.
A person who contravenes the one-principal rule is guilty of an offence and liable on conviction to a fine not exceeding S$25,000 or to imprisonment for a term not exceeding 12 months or to both, and in the case of a continuing offence to a further fine not exceeding S$2,500 for every day or part of a day during which the offence continues after conviction.fine: S$25,000; imprisonment: 12 months; daily continuing: S$2,500 — Ch. 1, p. 23
⚠ Representative offence: fine up to S$25,000 (+ up to 12 months). Principal's is higher.
Under Section 22(8) of the FAA, an individual who contravenes the requirement is liable on conviction to a fine not exceeding S$25,000 or to imprisonment for a term not exceeding 12 months or to both, and in the case of a continuing offence to a further fine not exceeding S$2,500 for every day or part of a day during which the offence continues after conviction.fine: S$25,000; imprisonment: 12 months; daily continuing: S$2,500 — Ch. 1, p. 25
Under Section 22(9) of the FAA, a licensed financial adviser (as principal) that permits an unqualified individual to carry on financial advisory business commits an offence, with a penalty of a fine not exceeding S$50,000 and, in the case of a continuing offence, a further fine not exceeding S$5,000 for every day or part of a day during which the offence continues after conviction.fine: S$50,000; daily continuing: S$5,000 — Ch. 1, p. 26
⚠ Principal's penalty (S$50,000) is DOUBLE the representative's (S$25,000).

Full reference · ← back to the cheat-sheet digest · generated from chapter-01.jsonl; verify against the study text before exam use. · schema v0 · v0.2.0-29-gcd47197-dirty

RES5 — Rules, Ethics and Skills for Financial Advisory Services — Full Facts