Financial Advisers (Amendment No. 2) Regulations 2003

No. S 537

Financial Advisers Act

(Chapter 110)

Financial Advisers (Amendment No. 2) Regulations 2003

In exercise of the powers conferred by sections 8 (1), 9(1), 16, 18, 23, 32, 38(1), 39, 45, 48(1), 56, 63, 100(1) and 104 of the Financial Advisers Act, the Monetary Authority of Singapore hereby makes the following Regulations:

Citation and commencement

1. These Regulations may be cited as the Financial Advisers (Amendment No. 2) Regulations 2003 and shall come into operation on 22nd December 2003.

Amendment of regulation 2

2. The Financial Advisers Regulations 2002 (G.N. No. S 462/2002) (referred to in these Regulations as the principal Regulations) are amended by renumbering regulation 2 as paragraph (1) of that regulation, and by inserting immediately thereafter the following paragraph:

“(2) For the purposes of the definition of “net asset value” in paragraph (1) —

(a)

in determining the value of the assets owned by a corporation, any amount on account of goodwill or of any other intangible assets shall be disregarded; and

(b)

in determining the amount of the liabilities of a corporation —

(i)	all contingent or prospective liabilities shall be taken into account; and
(ii)	any amount on account of any liability related to the share capital of the corporation shall not be taken into account.”.

Deletion and substitution of regulation 9

3. Regulation 9 of the principal Regulations is deleted and the following regulation substituted therefor:

“Variation of licence

9. Where the Authority —

(a)

adds to, varies or revokes any condition or restriction of a licence under section 13(3) of the Act;

(b)

has approved an application of a licensee under section 16(1)(a) of the Act to add to his licence one or more types of financial advisory service authorised to be provided by his licence; or

(c)

has approved an application of a licensee under section 16(1)(b) of the Act to add to his licence one or more of the following types of investment product in respect of which he provides any financial advisory service:

(i)	securities (other than collective investment schemes);
(ii)	collective investment schemes;
(iii)	futures contracts;
(iv)	contracts or arrangements for the purposes of foreign exchange trading;
(v)	contracts or arrangements for the purposes of leveraged foreign exchange trading;
(vi)	life policies,

the licensee shall immediately return his licence to the Authority for cancellation and the Authority shall issue a new licence to the licensee.”.

Amendment of regulation 11

4. Regulation 11 of the principal Regulations is amended —

(a)

by deleting the words “regulation 12 (1), (2), (4) or (5)” in paragraph (1) and substituting the words “section 18(3) of the Act or regulation 12 (2), (3) or (6)”; and

(b)

by deleting paragraph (4) and substituting the following paragraph:

“(4) During the period between the date of change of the financial adviser and the date of issue of the new licence under paragraph (3), the representative may provide for the new financial adviser the type or types of financial advisory service and in respect of such investment product authorised to be provided by the licence submitted under paragraph (1) (other than the type or types of financial advisory service or investment product which are not authorised to be provided by the licence of the new financial adviser), unless his licence has lapsed, has been revoked or suspended, or has expired, in the meantime.”.

Deletion and substitution of regulation 12

5. Regulation 12 of the principal Regulations is deleted and the following regulation substituted therefor:

“Cessation of financial advisory service by financial adviser or representative

12.—(1) Where a licensed financial adviser ceases to provide all of the types of financial advisory service authorised by its licence, the financial adviser and its representatives who cease to act as representatives as a result of such cessation shall lodge with the Authority a notice in Form 5.

(2) Where a licensed financial adviser ceases to provide any type of financial advisory service authorised by its licence but has not ceased to act as a financial adviser, the financial adviser and its representatives who cease to act as representatives in providing that type of financial advisory service as a result of such cessation (including a representative whose licence relates only to the type of financial advisory service that has ceased to be provided) shall return their licences to the Authority within 14 days of the date of cessation and lodge with the Authority a notice in Form 5.

(3) Where a licensed financial adviser ceases to provide financial advisory service in respect of any type of investment product authorised by its licence but has not ceased to act as a financial adviser, the financial adviser and its representatives who cease to act as representatives in providing financial advisory service in respect of that type of investment product as a result of such cessation (including a representative whose licence relates only to that type of investment product) shall return their licences to the Authority within 14 days of the date of cessation and lodge with the Authority a notice in Form 5.

(4) Upon receipt of the notices and licences referred to in paragraph (2) or (3), the Authority shall cancel the licences of the financial adviser and each of its representatives (other than a representative whose licence relates only to the type of financial advisory service or investment product that has ceased to be provided) and issue to the financial adviser and those representatives a new licence each in respect of the remaining type or types of financial advisory service and investment product authorised by its or his licence referred to in paragraph (2) or (3), as the case may be.

(5) Where a licensed representative (other than a representative referred to in paragraph (1), (2) or (3)) ceases to act as a representative in providing all of the types of financial advisory service authorised by his licence, he shall lodge with the Authority a notice in Form 10.

(6) Where a licensed representative (other than a representative referred to in paragraph (2) or (3)) ceases to act as a representative in providing —

(a)	any type of financial advisory service; or
(b)	financial advisory service in respect of any type of investment product,

authorised by his licence, he shall return his licence to the Authority within 14 days of the date of cessation and lodge with the Authority a notice in Form 10.

(7) Upon receipt of the notice and licence referred to in paragraph (6), the Authority shall cancel the licence of the representative and issue to him a new licence in respect of the remaining type or types of financial advisory service and investment product authorised by his licence.

(8) Any person who, without reasonable excuse, fails to return his licence under paragraph (2), (3) or (6) shall be guilty of an offence.”.

Amendment of regulation 13

6. Regulation 13 (1) of the principal Regulations is amended by deleting the words “in Singapore”.

Amendment of regulation 15

7. Regulation 15 of the principal Regulations is amended by deleting paragraphs (2) and (3).

Amendment of regulation 16

8. Regulation 16 of the principal Regulations is amended —

(a)	by deleting the words “A licensed financial adviser” in paragraph (1) and substituting the words “For the purposes of section 9(1)(b) of the Act, a licensed financial adviser”;
(b)	by deleting the words “A licensed financial adviser” in paragraph (2) and substituting the words “For the purposes of section 9(1)(b) of the Act, a licensed financial adviser”; and
(c)	by deleting paragraph (4).

Amendment of regulation 17

9. Regulation 17 of the principal Regulations is amended by deleting paragraphs (2) and (3).

Amendment of regulation 21

10. Regulation 21 of the principal Regulations is amended —

(a)

by deleting paragraph (2) and substituting the following paragraph:

“(2) Where a licensed financial adviser or an exempt financial adviser —

(a)	is prohibited from using the word “independent” under paragraph (1); or
(b)	is not prohibited from using the word “independent” under paragraph (1) but decides not to do so,

it shall ensure that its representatives do not use the word “independent” or any of its derivatives in any language, or any other word or expression in any language that is of like import to “independent” in the manner specified in paragraph (1)(a), (b) or (c).”;

(b)

by deleting the words “or (2)” in paragraph (4); and

(c)

by inserting, immediately after paragraph (4), the following paragraph:

“(4A) Any financial adviser which, without reasonable excuse, contravenes paragraph (2) shall be guilty of an offence.”.

Amendment of regulation 22

11. Regulation 22 (1) of the principal Regulations is amended by deleting sub-paragraph (b) and substituting the following sub-paragraphs:

“(b)	where the relevant person is a licensed representative who has changed the place at which he keeps the register of his interests in securities by virtue only of a change of the principal place of business of the financial adviser for which he acts, lodge a notice in Form 4;
(ba)	where the relevant person is a licensed representative who has changed the place at which he keeps the register of his interests in securities by virtue only of a change of the place at which the financial adviser for which he acts keeps the register of its interests in securities, lodge a notice in Form 4;
(bb)	where the relevant person is a licensed representative who has changed the place at which he keeps a register of his interests in securities in any other case, lodge a notice in Form 9; or”.

New regulation 27A

12. The principal Regulations are amended by inserting, immediately after regulation 27, the following regulation:

“Exemption of banks and merchant banks

27A.—(1) A bank or merchant bank which is exempt from holding a financial adviser’s licence under section 23(1)(a) or (b), respectively, of the Act shall be exempt from section 23(4) of the Act and regulations 37 and 38 in respect of its carrying on of the business of giving advice, or issuing or promulgating analyses or reports, on contracts or arrangements for the purposes of foreign exchange trading arranged by it or by —

(a)	any bank that is licensed under the Banking Act (Cap. 19); or
(b)	any merchant bank that is approved as a financial institution under the Monetary Authority of Singapore Act (Cap. 186).

(2) A representative of a bank or merchant bank exempt from section 23(4) of the Act and regulations 37 and 38 under paragraph (1) shall be exempt from section 23(5) of the Act in respect of his carrying out of the activity referred to in paragraph (1) for the person.”.

Amendment of regulation 31

13. Regulation 31 of the principal Regulations is amended —

(a)

by deleting the word “and” at the end of paragraph (1)(b);

(b)

by deleting the full-stop at the end of sub-paragraph (c) of paragraph (1) and substituting the word “; and”, and by inserting immediately thereafter the following sub-paragraph:

“(d)	the introducer shall establish and maintain a register of its representatives referred to in paragraph (2).”;

(c)

by deleting paragraph (4) and substituting the following paragraph:

“(4) A licensed financial adviser shall be exempt from complying with sections 16, 25, 27 and 36 of the Act in respect of all introducing activities it carries out on its own behalf or for one or more introducees, subject to —

(a)	the conditions specified in paragraph (1)(a), (b) and (c) which shall apply as if every reference in those conditions to introducer were a reference to the licensed financial adviser; and
(b)	the condition that it shall establish and maintain a register of the representatives referred to in paragraph (5) and the employees referred to in paragraph (6).”;

(d)

by deleting paragraph (7) and substituting the following paragraph:

“(7) A person exempt from holding a financial adviser’s licence under section 23(1)(a), (b), (c), (d) or (e) of the Act shall be exempt from complying with sections 25, 27 and 36 of the Act and regulation 37 in respect of all introducing activities it carries out on its own behalf or for one or more introducees, subject to —

(a)	the conditions specified in paragraph (1)(a), (b) and (c) which shall apply as if every reference in those conditions to introducer were a reference to the person; and
(b)	the condition that it shall establish and maintain a register of the representatives referred to in paragraph (8).”; and

(e)

by inserting, immediately after paragraph (11), the following paragraph:

“(11A) The registers referred to in paragraphs (1), (4) and (7) shall contain the following details or particulars in relation to each representative or employee, as the case may be:

(a)	his name;
(b)	his identity card number or passport number;
(c)	the date of his commencing introducing activities; and
(d)	the date of his ceasing introducing activities, where applicable.”.

Amendment of regulation 34

14. Regulation 34 of the principal Regulations is amended by deleting paragraph (2).

Deletion of regulation 34A

15. Regulation 34A of the principal Regulations is deleted.

Deletion of regulation 36

16. Regulation 36 of the principal Regulations is deleted.

Amendment of regulation 37

17. Regulation 37(1) of the principal Regulations is amended —

(a)	by inserting, immediately after the words “life policies,” in sub-paragraph (a), the words “but is not an insurer which arranges contracts of insurance in respect of life policies on its own behalf,”; and
(b)	by inserting, immediately after the words “life policies” in sub-paragraph (e), the words “and is required to maintain an insurance broking premium account under section 32(1) of the Act”.

Amendment of regulation 38

18. Regulation 38 (2) of the principal Regulations is amended by deleting sub-paragraphs (c) and (d) and substituting the following sub-paragraphs:

“(c)	the type or types of investment product in respect of which he is authorised to provide financial advisory service;
(d)	the date of commencement of authorisation to provide each type of financial advisory service and, where applicable, in respect of each type of investment product;
(da)	the date of cessation of authorisation to provide each type of financial advisory service and, where applicable, in respect of each type of investment product; and”.

Amendment of regulation 40

19. Regulation 40 of the principal Regulations is amended by inserting, immediately after the words “financial advisory service” in paragraphs (a) (iii) and (b) (iii), the words “or investment product”.

Amendment of regulation 42

20. Regulation 42 of the principal Regulations is amended by deleting paragraph (3) and substituting the following paragraph:

“(3) In paragraph (2), “officer” has the same meaning as in section 83(5) of the Act.”.

Amendment of First Schedule

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

(a)

by deleting the List of Forms and Forms 1 to 12 and substituting the following List of Forms and Forms:

“FIRST SCHEDULE

Regulation 4

List of Forms

Provisions of the Act or regulations for which forms are prescribed

Description of Forms

Number of form in this Schedule

Section 8(1)

Application for a financial adviser’s licence under section 8(1)

Section 16(1)

Application for variation of a financial adviser’s licence under section 16(1)

Section 8(1)

Application for renewal of a financial adviser’s licence under section 8(1)

Section 18(1) and regulation 22 (1)

Notice of change of principal place of business under section 18(1) or of change of place at which register of interests in securities is kept under regulation 22 (1)

Sections 18(1) and (2) and 39 (4)

Notice of cessation of provision of financial advisory service by a licensed financial adviser and representative under section 18(1) and (2) or of cessation of keeping a register of interests in securities under section 39(4)

Section 8(1)

Application for a representative’s licence under section 8(1)

Section 16(1)

Application for variation of a representative’s licence under section 16(1)

Section 8(1)

Application for renewal of a representative’s licence under section 8(1)

Section 18(2) and regulation 22 (1) (b)

Notice of change of a representative’s principal under section 18(2) or of change of place at which register of interests in securities is kept under regulation 22 (1) (b)

Sections 18(2) and 39 (4)

Notice of cessation of provision of financial advisory service by a licensed representative under section 18(2) or of cessation of keeping a register of interests in securities under section 39(4)

Section 56

Appointment of chief executive officer or director under section 56

Section 38(1)

Section 39(1)

Notice of place at which register of interests in securities will be kept under section 39(1)

Section 45(1)

Statement of profit and loss under section 45(1)

Section 45(1)

Statement of assets and liabilities, net asset value and insurance broking premium account under section 45(1)

Section 45(1) and regulation 37 (1)

Statement of placement of direct life insurance business handled under section 45(1) and regulation 37 (1)

Section 48(1)

Auditor’s report under section 48(1)

Regulation 10

Notice of change of particulars of licensed representative under regulation 10

Regulation 32(3)

Auditor’s confirmation for a securities exchange, futures exchange or recognised trading system provider exempted from licensing under regulation 32 (3)

Regulation 37(1) and (2)

Notice of commencement of business of exempt financial adviser under regulation 37 (1) and (2)

Regulation 37(1) and (2)

Notice of change of particulars of exempt financial adviser under regulation 37 (1) and (2)

Regulation 37(1) and (2)

Notice of cessation of business of exempt financial adviser under regulation 37 (1) and (2)

Regulation 37(2)

Declaration by persons exempted under regulation 27 (1) (d) from holding financial adviser’s licence under regulation 37 (2)

Regulation 37(1)

Audited statement of insurance broking premium account of exempt financial adviser under regulation 37 (1)

Regulation 22(1) (c)

Notice of change of place at which register of interests in securities is kept by financial journalist under regulation 22 (1) (c)

”7.

(b)

by deleting Forms 14, 15 and 16 and substituting the following Forms:

(c)

by deleting Forms 20 and 21 and substituting the following Forms:

(d)

by deleting Form 24 and substituting the following Form:

Amendment of Second Schedule

22. The Second Schedule to the principal Regulations is amended —

(a)

by deleting items 7 and 8 and substituting the following items:

“

Section 16(2)

For every application to add to the type(s) of financial advisory service or investment product authorised under a financial adviser’s licence

$250

Section 16(2)

For every application to add to the type(s) of financial advisory service or investment product authorised under a representative’s licence

$50

”;

(b)

by inserting, immediately after item 9, the following words:

“The fee specified in item 9 is inclusive of the goods and services tax chargeable under the Goods and Services Tax Act (Cap. 117A). No goods and services tax is chargeable for the other items.”.

[G.N. No. S 83/2003]

Made this 20th day of November 2003.

KOH YONG GUAN

Managing Director,
Monetary Authority of
Singapore.

[MCD FAII 010/2003; AG/LEG/SL/110/2002/1 Vol. 1]

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