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Formal Consolidation | 2004 RevEd
Exemption for introducing activities
31.—(1)  A person (not being an individual, a licensed financial adviser or a person exempt under section 23(1)(a), (b), (c), (d) or (e) of the Act) shall be exempt under section 23(1)(f) of the Act from holding a financial adviser’s licence (referred to in this regulation as an introducer) in respect of all introducing activities it carries out for one or more licensed financial advisers or persons exempt under section 23(1)(a), (b), (c), (d) or (e) of the Act (referred to in this regulation as an introducee), subject to the following conditions:
(a)the introducer shall, when carrying out introducing activities (whether through any of its representatives or otherwise), disclose to every client —
(i)that the introducer is carrying out introducing activities for one or more introducees;
(ii)that, when carrying out introducing activities, the introducer and its representatives shall not —
(A)give advice or provide recommendations on any investment product to the client;
(B)market any collective investment scheme; or
(C)arrange any contract of insurance in respect of life policies,
other than to the extent of carrying out introducing activities;
(iii)whether or not the introducer or any of its representatives is or will be remunerated by one or more introducees for carrying out introducing activities; and
(iv)where the introducer or any of its representatives is or will be remunerated by one or more introducees, the amount of remuneration if so requested by the client;
(b)where the introducer carries out introducing activities for more than one introducee, the introducer (whether through any of its representatives or otherwise) shall, with the consent of the client, introduce that client to every introducee that provides the type or types of financial advisory service required by that client;
(c)the introducer shall not receive or deal with client’s money or property in relation to introducing activities; and
(d)the introducer shall establish and maintain a register of its representatives referred to in paragraph (2).
(2)  A representative of an introducer —
(a)shall, when carrying out introducing activities, disclose to every client —
(i)that he is carrying out introducing activities on behalf of the introducer;
(ii)that the introducer acts for one or more introducees;
(iii)that, when carrying out introducing activities, he shall not —
(A)give advice or provide recommendations on any investment product to the client;
(B)market any collective investment scheme; or
(C)arrange any contract of insurance in respect of life policies,
other than to the extent of carrying out introducing activities;
(iv)whether or not he or the introducer is or will be remunerated by one or more introducees for carrying out introducing activities; and
(v)where he or the introducer is or will be remunerated by one or more introducees, the amount of remuneration if so requested by the client;
(b)shall, where he carries out introducing activities on behalf of the introducer for more than one introducee, with the consent of the client, introduce that client to every introducee that provides the type or types of financial advisory service required by that client; and
(c)shall not receive or deal with client’s money or property in relation to introducing activities.
(3)  An individual (other than a representative or an employee referred to in paragraph (2), (5), (6) or (8)) shall be exempt from —
(a)holding a representative’s licence in respect of all introducing activities he carries out on behalf of one or more licensed financial advisers;
(b)complying with sections 25, 27 and 36 of the Act in respect of all introducing activities he carries out on behalf of one or more persons exempt from holding a financial adviser’s licence under section 23(1)(a), (b), (c), (d) or (e) of the Act; and
(c)section 12 of the Act in respect of all introducing activities he carries out on behalf of more than one introducee,
subject to the following conditions:
(i)the individual shall, when carrying out introducing activities, disclose to the client —
(A)that he is carrying out introducing activities for one or more introducees;
(B)that he shall not give advice or provide recommendations on any investment product to the client, market any collective investment scheme or arrange any contract of insurance in respect of life policies, other than to the extent of carrying out introducing activities;
(C)whether or not he is or will be remunerated by one or more introducees for carrying out introducing activities; and
(D)where he is or will be remunerated by one or more introducees, the amount of remuneration if so requested by the client;
(ii)where the individual carries out introducing activities for more than one introducee, he shall, with the consent of the client, introduce that client to every introducee that provides the type or types of financial advisory service required by that client; and
(iii)the individual shall not receive or deal with client’s money or property in relation to introducing activities.
(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).
(5)  A licensed representative of a licensed financial adviser referred to in paragraph (4) shall be exempt from complying with sections 16, 25, 27 and 36 of the Act in respect of all introducing activities he carries out on behalf of the financial adviser, subject to —
(a)the conditions specified in paragraph (2)(a)(i), (iii), (iv) and (v) and (c) which, in a case where he acts for the financial adviser when the financial adviser is carrying out introducing activities on its own behalf, shall apply as if every reference in those conditions to introducer were a reference to the financial adviser and every reference to “by the introducee” were deleted; and
(b)the conditions specified in paragraph (2)(a), (b) and (c) which, in a case where he acts for the financial adviser when the financial adviser is carrying out introducing activities for one or more introducees, shall apply as if every reference in those conditions to introducer were a reference to the financial adviser.
(6)  An employee of a licensed financial adviser referred to in paragraph (4) (not being a licensed representative) shall be exempt from holding a representative’s licence in respect of all introducing activities he carries out on behalf of the financial adviser, subject to —
(a)the conditions specified in paragraph (2)(a)(i), (iii), (iv) and (v) and (c) which, in a case where he acts for the financial adviser when the financial adviser is carrying out introducing activities on its own behalf, shall apply as if every reference in those conditions to introducer were a reference to the financial adviser and every reference to “by the introducee” were deleted; and
(b)the conditions specified in paragraph (2)(a), (b) and (c) which, in a case where he acts for the financial adviser when the financial adviser is carrying out introducing activities for one or more introducees, shall apply as if every reference in those conditions to introducer were a reference to the financial adviser.
(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).
(8)  A representative of a person referred to in paragraph (7) shall be exempt from complying with sections 25, 27 and 36 of the Act in respect of all introducing activities he carries out on behalf of the person, subject to —
(a)the conditions specified in paragraph (2)(a)(i), (iii), (iv) and (v) and (c) which, in a case where he acts for the person when the person is carrying out introducing activities on its own behalf, shall apply as if every reference in those conditions to introducer were a reference to the person and every reference to “by the introduce” were deleted; and
(b)the conditions specified in paragraph (2)(a), (b) and (c) which, in a case where he acts for the person when the person is carrying out introducing activities for one or more introducees, shall apply as if every reference in those conditions to introducer were a reference to the person.
(9)  Any person who contravenes any condition or restriction specified in paragraph (1) or (2)applicable to him shall be guilty of an offence.
(10)  Sections 26, 29, 33, 34 and 70 of the Act shall, with the necessary modifications, apply to an introducer and an individual exempt under paragraph (3).
(11)  Sections 12, 26, 29, 33, 34 and 70 of the Act shall, with the necessary modifications, apply to a representative of an introducer and an employee exempt under paragraph (6).
(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.
(12)  In this regulation —
“client” includes a prospective client;
“introducing activity” means —
(a)introducing any client to an introducee in relation to the provision of any type or types of financial advisory service by the introducee; or
(b)the activity referred to in sub-paragraph (a) and either or both of the following:
(i)recording the particulars of any client and forwarding such particulars to an introducee with the client’s consent;
(ii)providing factual information to any client on investment products, including (where applicable) information on —
(A)the name of the investment product;
(B)the product provider;
(C)the date on which the product is launched;
(D)the minimum subscription amount; and
(E)any fee or charge which may be imposed,
and “introduce” shall be construed accordingly.
Informal Consolidation | Amended S 362/2005
Exemption for introducing activities
31.—(1)  A person (not being an individual, a licensed financial adviser or a person exempt under section 23(1)(a), (b), (c), (d) or (e) of the Act) shall be exempt under section 23(1)(f) of the Act from holding a financial adviser’s licence (referred to in this regulation as an introducer) in respect of all introducing activities it carries out for one or more licensed financial advisers or persons exempt under section 23(1)(a), (b), (c), (d) or (e) of the Act (referred to in this regulation as an introducee), subject to the following conditions:
(a)the introducer shall, when carrying out introducing activities (whether through any of its representatives or otherwise), disclose to every client —
(i)that the introducer is carrying out introducing activities for one or more introducees;
(ii)that, when carrying out introducing activities, the introducer and its representatives shall not —
(A)give advice or provide recommendations on any investment product to the client;
(B)market any collective investment scheme; or
(C)arrange any contract of insurance in respect of life policies,
other than to the extent of carrying out introducing activities;
(iii)whether or not the introducer or any of its representatives is or will be remunerated by one or more introducees for carrying out introducing activities; and
(iv)where the introducer or any of its representatives is or will be remunerated by one or more introducees, the amount of remuneration if so requested by the client;
(b)where the introducer carries out introducing activities for more than one introducee, the introducer (whether through any of its representatives or otherwise) shall, with the consent of the client, introduce that client to every introducee that provides the type or types of financial advisory service required by that client;
(c)the introducer shall not receive or deal with client’s money or property in relation to introducing activities; and
(d)the introducer shall establish and maintain a register of its representatives referred to in paragraph (2).
(2)  A representative of an introducer —
(a)shall, when carrying out introducing activities, disclose to every client —
(i)that he is carrying out introducing activities on behalf of the introducer;
(ii)that the introducer acts for one or more introducees;
(iii)that, when carrying out introducing activities, he shall not —
(A)give advice or provide recommendations on any investment product to the client;
(B)market any collective investment scheme; or
(C)arrange any contract of insurance in respect of life policies,
other than to the extent of carrying out introducing activities;
(iv)whether or not he or the introducer is or will be remunerated by one or more introducees for carrying out introducing activities; and
(v)where he or the introducer is or will be remunerated by one or more introducees, the amount of remuneration if so requested by the client;
(b)shall, where he carries out introducing activities on behalf of the introducer for more than one introducee, with the consent of the client, introduce that client to every introducee that provides the type or types of financial advisory service required by that client; and
(c)shall not receive or deal with client’s money or property in relation to introducing activities.
(3)  An individual (other than a representative or an employee referred to in paragraph (2), (5), (6) or (8)) shall be exempt from —
(a)holding a representative’s licence in respect of all introducing activities he carries out on behalf of one or more licensed financial advisers;
(b)complying with sections 25, 27 and 36 of the Act in respect of all introducing activities he carries out on behalf of one or more persons exempt from holding a financial adviser’s licence under section 23(1)(a), (b), (c), (d) or (e) of the Act; and
(c)section 12 of the Act in respect of all introducing activities he carries out on behalf of more than one introducee,
subject to the following conditions:
(i)the individual shall, when carrying out introducing activities, disclose to the client —
(A)that he is carrying out introducing activities for one or more introducees;
(B)that he shall not give advice or provide recommendations on any investment product to the client, market any collective investment scheme or arrange any contract of insurance in respect of life policies, other than to the extent of carrying out introducing activities;
(C)whether or not he is or will be remunerated by one or more introducees for carrying out introducing activities; and
(D)where he is or will be remunerated by one or more introducees, the amount of remuneration if so requested by the client;
(ii)where the individual carries out introducing activities for more than one introducee, he shall, with the consent of the client, introduce that client to every introducee that provides the type or types of financial advisory service required by that client; and
(iii)the individual shall not receive or deal with client’s money or property in relation to introducing activities.
(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).
(5)  A licensed representative of a licensed financial adviser referred to in paragraph (4) shall be exempt from complying with sections 16, 25, 27 and 36 of the Act in respect of all introducing activities he carries out on behalf of the financial adviser, subject to —
(a)the conditions specified in paragraph (2)(a)(i), (iii), (iv) and (v) and (c) which, in a case where he acts for the financial adviser when the financial adviser is carrying out introducing activities on its own behalf, shall apply as if every reference in those conditions to introducer were a reference to the financial adviser and every reference to “by the introducee” were deleted; and
(b)the conditions specified in paragraph (2)(a), (b) and (c) which, in a case where he acts for the financial adviser when the financial adviser is carrying out introducing activities for one or more introducees, shall apply as if every reference in those conditions to introducer were a reference to the financial adviser.
(6)  An employee of a licensed financial adviser referred to in paragraph (4) (not being a licensed representative) shall be exempt from holding a representative’s licence in respect of all introducing activities he carries out on behalf of the financial adviser, subject to —
(a)the conditions specified in paragraph (2)(a)(i), (iii), (iv) and (v) and (c) which, in a case where he acts for the financial adviser when the financial adviser is carrying out introducing activities on its own behalf, shall apply as if every reference in those conditions to introducer were a reference to the financial adviser and every reference to “by the introducee” were deleted; and
(b)the conditions specified in paragraph (2)(a), (b) and (c) which, in a case where he acts for the financial adviser when the financial adviser is carrying out introducing activities for one or more introducees, shall apply as if every reference in those conditions to introducer were a reference to the financial adviser.
(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).
(8)  A representative of a person referred to in paragraph (7) shall be exempt from complying with sections 25, 27 and 36 of the Act in respect of all introducing activities he carries out on behalf of the person, subject to —
(a)the conditions specified in paragraph (2)(a)(i), (iii), (iv) and (v) and (c) which, in a case where he acts for the person when the person is carrying out introducing activities on its own behalf, shall apply as if every reference in those conditions to introducer were a reference to the person and every reference to “by the introduce” were deleted; and
(b)the conditions specified in paragraph (2)(a), (b) and (c) which, in a case where he acts for the person when the person is carrying out introducing activities for one or more introducees, shall apply as if every reference in those conditions to introducer were a reference to the person.
(9)  Any person who contravenes any condition or restriction specified in paragraph (1), (2) or (3) applicable to him shall be guilty of an offence.
[S 362/2005 wef 01/07/2005]
(10)  Sections 26, 29, 33, 34 and 70 of the Act shall, with the necessary modifications, apply to an introducer and an individual exempt under paragraph (3).
(11)  Sections 12, 26, 29, 33, 34 and 70 of the Act shall, with the necessary modifications, apply to a representative of an introducer and an employee exempt under paragraph (6).
(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.
(12)  In this regulation —
“client” includes a prospective client;
“introducing activity” means —
(a)introducing any client to an introducee in relation to the provision of any type or types of financial advisory service by the introducee; or
(b)the activity referred to in sub-paragraph (a) and either or both of the following:
(i)recording the particulars of any client and forwarding such particulars to an introducee with the client’s consent;
(ii)providing factual information to any client on investment products, including (where applicable) information on —
(A)the name of the investment product;
(B)the product provider;
(C)the date on which the product is launched;
(D)the minimum subscription amount; and
(E)any fee or charge which may be imposed,
and “introduce” shall be construed accordingly.