Chapter 2 · quick-revision digest · narrative, key figures & core facts
Chapter 2 turns from *who* may give financial advice to *how* a licensed adviser must behave once it holds a licence. The first half sets out the conduct-of-business duties owed to clients: disclosing all material information about a product it recommends (Section 34), never making a false or misleading statement — staying silent on a material matter counts too (Section 35), and only recommending a product for which it has a "reasonable basis" after weighing the client's objectives, financial situation and needs (Section 36). It also governs the handling of a client's money (Section 37 — liens and charges on client accounts are largely void), the separate bank account an insurance broker must keep for premiums (Section 41), the ban on placing risk with unlicensed insurers (Section 42), honesty in insurance forms and claims (Section 43), and the management of conflicts of interest, backed by a register of the adviser's own interests in listed products (Section 45 and the regulations).
The second half concerns the MAS's supervisory powers over the firm and its people. The MAS must approve a licensed adviser's chief executive officer and directors before they are appointed (Section 63, via Form 11), can direct the removal of an officer who ceases to be "fit and proper" (Section 64), and can issue binding written directions (Section 67). Where serious wrongdoing has occurred, it can make a prohibition order barring a person from the industry (Sections 68–70), subject to a right of appeal to the Minister, and it may publish its regulatory actions (Section 77).
Running through the chapter is a ladder of offences whose amounts matter: a false or misleading statement carries up to S$50,000, while deceptive insurance representations and conflict-of-interest breaches carry up to S$25,000 — all with up to 12 months' imprisonment. The heaviest penalties fall on the firm's people: an officer who fails to secure the firm's compliance, or who falsifies its records, faces up to S$100,000 and two years (Sections 111–113). Smaller numbers recur too — a S$3,000 cap on unsecured facilities to insiders, interests entered in the register within seven days and kept for five years, and a 30-day window to appeal a varied prohibition order.
| Item | Value | Type | Source |
|---|---|---|---|
| S$3,000 cap on unsecured facilities | S$3,000 | Threshold | p.2-14 |
| Deadline to enter an acquired interest | 7 days | Deadline | p.2-12 |
| Retention period for register entries | 5 years | Deadline | p.2-12 |
| Recording a change in an interest | 7 days | Deadline | p.2-13 |
| Market value — no trading on prior business day | 30 days | Deadline | p.2-14 |
| Appeal to the Minister within 30 days | 30 days | Deadline | p.2-19 |
| Penalty for false/misleading statements | S$50,000 | Penalty | p.2-5 |
| Penalty for false representations | S$25,000 | Penalty | p.2-10 |
| Penalty for contravening conflict-of-interest rule | S$25,000 | Penalty | p.2-12 |
| Employers must not use a prohibited person | S$50,000 | Penalty | p.2-19 |
| Officer's duty and penalty | S$100,000 | Penalty | p.2-21 |
| Falsification of records offence and penalty | S$100,000 | Penalty | p.2-22 |
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