Financial Advisers (Amendment) Act 2005 - Singapore Statutes Online

REPUBLIC OF SINGAPORE

GOVERNMENT GAZETTE

ACTS SUPPLEMENT

Published by Authority

NO. 5]

Friday, February 25

[2005

The following Act was passed by Parliament on 25th January 2005 and assented to by the President on 3rd February 2005:—

Financial Advisers (Amendment) Act 2005

(No. 2 of 2005)

I assent.

S R NATHAN,

President,

3rd February 2005.

Date of Commencement: 1st July 2005

An Act to amend the Financial Advisers Act (Chapter 110 of the 2002 Revised Edition).

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:

Short title and commencement

1. This Act may be cited as the Financial Advisers (Amendment) Act 2005 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Amendment of long title

2. The long title to the Financial Advisers Act (referred to in this Act as the principal Act) is amended by inserting, immediately after the word “representatives”, the words “, and for other purposes relating thereto or connected therewith”.

Amendment of section 2

3. Section 2 (1) of the principal Act is amended —

(a)

by inserting, immediately after the definition of “advocate and solicitor”, the following definitions:

“ “approved holding company” has the same meaning as in section 2(1) of the Securities and Futures Act (Cap. 289);

“auditor” means a public accountant who is registered or deemed to be registered under the Accountants Act 2004 (Act 4 of 2004);”;

(b)

by deleting the words “or (2)” in the definition of “exempt financial adviser”;

(c)

by deleting the definition of “futures contract” and substituting the following definition:

“ “futures contract” means —

(a)

a contract the effect of which is that —

(i)	one party agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party at a specified future time and at a specified price payable at that time pursuant to terms and conditions set out in the business rules or practices of a futures market; or
(ii)	the parties will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity agreed at the time of the making of the contract and at a specified future time, such difference being determined in accordance with the business rules or practices of a futures market at which the contract is made,

and includes a futures option transaction within the meaning of section 2(1) of the Securities and Futures Act (Cap. 289); or

(b)

such other contract or class of contracts as the Authority may prescribe;”;

(d)

by deleting the definition of “futures exchange” and substituting the following definition:

“ “futures exchange” has the same meaning as in section 2(1) of the Securities and Futures Act;”;

(e)

by deleting the definition of “recognised trading system provider” and substituting the following definition:

“ “recognised market operator” has the same meaning as in section 2(1) of the Securities and Futures Act;”; and

(f)

by deleting the definition of “securities exchange” and substituting the following definition:

“ “securities exchange” has the same meaning as in section 2(1) of the Securities and Futures Act;”.

Amendment of section 7

4. Section 7 of the principal Act is amended by deleting subsection (1) and substituting the following subsection:

“(1) No person shall act as or hold himself out to be a representative of a financial adviser unless the following conditions are satisfied:

(a)	that person is an individual;
(b)	where the financial adviser is a licensed financial adviser, that person holds a representative’s licence that is related to that financial adviser; and
(c)	where the financial adviser is an exempt financial adviser, that person is a representative of that financial adviser.”.

Amendment of section 8

5. Section 8 (1) of the principal Act is amended by deleting the words “prescribed manner” in paragraph (c) and substituting the words “manner specified by the Authority”.

Amendment of section 9

6. Section 9 (1) of the principal Act is amended by inserting, immediately after paragraph (d), the following paragraph:

“(da)

any information or document that is furnished by the applicant to the Authority is false or misleading;”.

Amendment of section 11

7. Section 11 (1) of the principal Act is amended by inserting, immediately after paragraph (c), the following paragraph:

“(ca)

any information or document that is furnished by the applicant to the Authority is false or misleading;”.

Amendment of section 16

8. Section 16 of the principal Act is amended —

(a)	by deleting the words “prescribed manner” in subsection (2)(a) and substituting the words “manner specified by the Authority”; and
(b)	by inserting, immediately after the words “such conditions” in subsection (3), the words “or restrictions”.

Repeal and re-enactment of section 17

9. Section 17 of the principal Act is repealed and the following section substituted therefor:

“False statements in relation to application for grant, renewal or variation of licence

17. Any person who, in connection with an application for the grant, renewal or variation of a licence —

(a)	without reasonable excuse, makes any statement which is false or misleading in a material particular; or
(b)	without reasonable excuse, omits to state any matter or thing without which the application is misleading in a material respect,

shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.”.

Amendment of section 19

10. Section 19 (2) of the principal Act is amended —

(a)

by deleting sub-paragraph (iv) of paragraph (a) and substituting the following sub-paragraphs:

“(iv)

it appears to the Authority that the financial adviser is carrying on its business in a manner that is —

(A)	likely to be detrimental to its clients; or
(B)	contrary to the public interest;

(iva)

any information or document that is furnished by the financial adviser to the Authority is false or misleading; or”; and

(b)

by deleting sub-paragraph (iv) of paragraph (b) and substituting the following sub-paragraphs:

“(iv)

it appears to the Authority that the representative is carrying on his functions in a manner that is —

(A)	likely to be detrimental to the clients of the financial adviser of which he is a representative; or
(B)	contrary to the public interest;

(iva)

any information or document that is furnished by the representative to the Authority is false or misleading;”.

Amendment of section 20

11. Section 20 of the principal Act is amended —

(a)	by deleting the words “grant, renew or vary a licence” in paragraph (a) and substituting the words “grant a licence to him, or to renew or vary his licence”; and
(b)	by deleting the words “a licence” in paragraph (b) and substituting the words “his licence”.

Amendment of section 23

12. Section 23 of the principal Act is amended —

(a)

by deleting the word “and” at the end of subsection (1)(e);

(b)

by inserting, immediately after paragraph (e) of subsection (1), the following paragraph:

“(ea)

a securities exchange, a futures exchange, a recognised market operator, or an approved holding company, in respect of the provision of any financial advisory service that is solely incidental to its operation of a securities market, a futures market, or to its performance as an approved holding company, as the case may be; and”;

(c)

by deleting subsections (2) and (3);

(d)

by deleting the words “, 36 and 70” in subsections (4) and (5) and substituting in each case the words “and 36”;

(e)

by deleting the words “subsection (1)(f) or (2)” in subsections (4) and (5) and substituting in each case the words “subsection (1)(ea) or (f)”;

(f)

by deleting subsection (5A) and substituting the following subsections:

“(5A) Subject to the provisions of this Act, sections 25, 26 and 36 shall apply, with the necessary modifications, to —

(a)	a person referred to in subsection (1)(ea) in respect of its business of providing any financial advisory service as if it is a licensed financial adviser; and
(b)	any of its representatives in respect of his acting as such as if he is a licensed representative.

(5B) Subject to the provisions of this Act, section 70 shall apply, with the necessary modifications, to —

(a)	an exempt financial adviser in respect of its business of providing any financial advisory service as if it is a licensed financial adviser; and
(b)	a representative of an exempt financial adviser in respect of his acting as such as if he is a licensed representative.

(5C) For the avoidance of doubt, references in subsections (4), (5), (5A) and (5B) to specific sections in this Act that apply to exempt financial advisers or their representatives, respectively, do not include references to any regulations made under those sections unless the Authority prescribes that such regulations so apply.”;

(g)

by deleting the words “or (2)” in subsections (6) and (7);

(h)

by deleting the words “or (5)” in subsection (6) and substituting the words “, (5), (5A) or (5B)”; and

(i)

by deleting the words “(2) or” in subsection (8).

New section 23A

13. The principal Act is amended by inserting, immediately after section 23, the following section:

“Annual fees

23A.—(1) Every exempt financial adviser and representative of an exempt financial adviser shall pay to the Authority such annual fee as may be prescribed and in such manner as may be specified by the Authority.

(2) Any annual fee paid by an exempt financial adviser or a representative of an exempt financial adviser to the Authority under subsection (1) shall not be refunded or remitted if —

(a)	during the period to which the annual fee relates, the exemption of the exempt financial adviser or representative, as the case may be, is withdrawn;
(b)	during the period to which the annual fee relates, the exempt financial adviser or representative, as the case may be, fails or ceases to provide any financial advisory service; or
(c)	a prohibition order has been made against the exempt financial adviser or representative, as the case may be, under section 59.

(3) Subject to subsection (2), the Authority may, where it considers appropriate, refund or remit the whole or part of any annual fee paid or payable to it.”.

Amendment of section 24

14. Section 24 of the principal Act is amended —

(a)	by deleting subsections (1) and (2); and
(b)	by deleting the words “step-son, daughter, step-daughter, brother or sister” in subsection (4)(a) and substituting the words “adopted son, step-son, daughter, adopted daughter, step daughter, brother, step-brother, sister or step-sister”.

Amendment of section 27

15. Section 27 of the principal Act is amended by inserting, immediately after subsection (4), the following subsection:

“(5) This section shall not apply to any licensee or class of licensees in such circumstances or under such conditions as may be prescribed.”.

Amendment of section 37

16. Section 37 (2) of the principal Act is amended by deleting the words “recognised trading system provider” in paragraph (c) and substituting the words “recognised market operator”.

Amendment of section 48

17. Section 48 of the principal Act is amended by deleting subsections (4) and (8).

Amendment of section 57

18. Section 57 (1) of the principal Act is amended by deleting the words “justification or” in paragraph (b).

Amendment of section 58

19. Section 58 of the principal Act is amended —

(a)

by deleting the words “or 100” in subsection (1)(c);

(b)

by deleting sub-paragraph (i) of subsection (2)(a) and substituting the following sub-paragraph:

“(i)

the standards to be maintained by —

(A)	a licensee;
(B)	any person exempt under section 23 or 100; or
(C)	any representative of a person exempt under section 23,

in the conduct of his business, including the provision of any financial advisory service to any person outside Singapore and the duties to be undertaken when making recommendations to clients in respect of investment products;”; and

(c)

by deleting the words “or to imprisonment for a term not exceeding 12 months or to both” in subsection (5).

Amendment of section 59

20. Section 59 (1) of the principal Act is amended —

(a)

by deleting the word “or” at the end of paragraph (c); and

(b)

by deleting the full-stop at the end of paragraph (d) and substituting the word “; or”, and by inserting immediately thereafter the following paragraph:

“(e)	the person has been convicted of an offence involving the contravention of any law or requirement of a foreign country or territory relating to any financial advisory service provided by that person.”.

Amendment of First Schedule

21. The First Schedule to the principal Act is amended —

(a)	by inserting, immediately after the words “commission or other consideration” in paragraph 3(c), the words “, apart from any fee received from subscription to or purchase of the newspaper,”;
(b)	by inserting, immediately after the words “commission or other consideration” in paragraph 4(c), the words “, apart from any fee received from subscription to the service,”; and
(c)	by deleting the words “subsections (1)(f) and (2)” in paragraph 11 and substituting the words “subsection (1)(f)”.

Amendment of Second Schedule

22. Paragraphs 1 and 2 of the Second Schedule to the principal Act are deleted and the following paragraphs substituted therefor:

“1. Advising others, either directly or through publications or writings, and whether in electronic, print or other form, concerning any investment product, other than —

(a)	in the manner set out in paragraph 2; or
(b)	advising on corporate finance within the meaning of the Securities and Futures Act.

2. Advising others by issuing or promulgating research analyses or research reports, whether in electronic, print or other form, concerning any investment product.”.

Amendment of Third Schedule

23. Item 1 in the Third Schedule to the principal Act is deleted and the following item substituted therefor:

“1. Section 23(6)”.

Transitional and savings provisions

24. The Authority may, by regulations, prescribe such transitional and savings provisions in relation to this Act as it may consider necessary or expedient within 2 years of the date of commencement of this Act.

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