PART VIA | PRESCRIBED NON‑FINANCIAL ADVISORY SERVICES |
[S 815/2015 wef 01/01/2016] 40C. In this Part —| “associate”, in relation to a licensed international market agent or an applicant for an international market agent licence, has the same meaning as in regulation 2(2) of the Casino Control (Casino Marketing Arrangements) Regulations 2013 (G.N. No. S 65/2013); |
| “client” includes prospective client; |
| “estate agent” has the same meaning as in section 3(1) of the Estate Agents Act 2010; [S 222/2023 wef 31/12/2021] |
| “exempt financial adviser” means a person who is exempted from holding a financial adviser’s licence under section 20(1)(a), (b), (c), (d) or (e) of the Act; [S 222/2023 wef 31/12/2021] |
| “international market agent” and “international market agent licence” have the same meanings as in section 2(1) of the Casino Control Act 2006; [S 222/2023 wef 31/12/2021] |
| “investment” means any tangible or intangible asset that is acquired or held by a person with the expectation of financial return or benefit in future; |
| “licensed estate agent” has the same meaning as in section 3(1) of the Estate Agents Act 2010; [S 222/2023 wef 31/12/2021] |
| “non‑financial advisory service” means a service other than a financial advisory service; |
“referral activity” means —| (a) | referring a client to a relevant person (referred to in regulation 40D(2)) for the provision of any non‑financial advisory service or any product in relation to such service; or | | (b) | the activity referred to in paragraph (a) and either or both of the following:| (i) | recording the particulars of a client and forwarding such particulars to a relevant person with the client’s consent; | | (ii) | providing factual information to a client on any product or service in relation to any non‑financial advisory service provided by the relevant person, including (where applicable) information on —| (A) | the name of the product or service; | | (B) | the product or service provider; or | | (C) | any fee or charge which may be imposed, |
|
|
| and “refer” and “referrals” are to be construed accordingly; |
|
| “revenue” means fees, brokerage, commissions and income earned in the ordinary course of business of the licensed financial adviser; |
| “salesperson” has the same meaning as in section 3(1) of the Estate Agents Act 2010. [S 815/2015 wef 01/01/2016] [S 222/2023 wef 31/12/2021] |
|
| Permitted businesses under section 60(1)(e) of Act |
| 40D.—(1) The businesses that are prescribed for the purposes of section 60(1)(e) of the Act which a licensed financial adviser may carry on, or may enter into any partnership, joint venture or any other arrangement with any person to carry on, are set out in paragraphs (2), (4) and (5). [S 222/2023 wef 31/12/2021] (2) A licensed financial adviser may carry on, or may enter into any partnership, joint venture or any other arrangement with any person to carry on, the business of carrying out referral activities (whether through any of the licensed financial adviser’s representatives or otherwise) in respect of any non‑financial advisory service for one or more of the following persons (called in this regulation the relevant person) where the conditions set out in paragraph (3) are complied with:| (a) | any bank that holds a licence granted under section 7 or 79 of the Banking Act 1970; [S 462/2021 wef 01/07/2021] [S 222/2023 wef 31/12/2021] | | (b) | any merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970; [S 462/2021 wef 01/07/2021] [S 222/2023 wef 31/12/2021] | | (c) | any finance company licensed under the Finance Companies Act 1967; [S 222/2023 wef 31/12/2021] | | (d) | any payment service provider licensed under the Payment Services Act 2019; [S 842/2019 wef 28/01/2020] | | (e) | any insurer licensed or regulated under the Insurance Act 1966; [S 222/2023 wef 31/12/2021] | | (f) | any insurance intermediary registered or regulated under the Insurance Act 1966; [S 222/2023 wef 31/12/2021] | | (g) | any holder of a capital markets services licence under the Securities and Futures Act 2001; [S 222/2023 wef 31/12/2021] | | (h) | any licensed trust company under the Trust Companies Act 2005; [S 222/2023 wef 31/12/2021] | | (i) | any person who carries on a business of providing will writing services, estate or tax planning services, or any combination of those services. |
|
(3) The conditions referred to in paragraph (2) are —| (a) | the licensed financial adviser must, when carrying out referral activities (whether through any of its representatives or otherwise), disclose in writing to every client —| (i) | that the licensed financial adviser is carrying out referral activities for one or more relevant persons; | | (ii) | that, when carrying out referral activities, the licensed financial adviser and its representatives must not give advice or provide any recommendation on any product or service in relation to any non‑financial advisory service to the client; | | (iii) | whether the licensed financial adviser or any of its directors or shareholders, is a substantial shareholder of the relevant person, and whether the licensed financial adviser has any other relationship with the relevant person or any person acting for or on behalf of the relevant person (as the case may be); | | (iv) | whether the licensed financial adviser has any other actual or potential conflict of interest that may arise from carrying out referral activities for the client; | | (v) | whether or not the licensed financial adviser or any of its representatives is or will be remunerated by one or more relevant persons for carrying out referral activities; | | (vi) | where the licensed financial adviser or any of its representatives is or will be remunerated by one or more relevant persons, the amount of remuneration and the basis of remuneration received; and | | (vii) | such other information as the Authority may specify; |
| | (b) | the licensed financial adviser must not, when making any referrals (whether through its representatives or otherwise), give advice or provide any recommendation on any product or service in relation to any non‑financial advisory service to the client; | | (c) | the licensed financial adviser must ensure effective controls and segregation of duties to mitigate actual or potential conflicts of interest that may arise from the licensed financial adviser carrying out referral activities; | | (d) | the licensed financial adviser must ensure that its carrying out of referral activities does not cause any reputational damage to itself or the financial advisory industry, or both; | | (e) | where —| (i) | a client in relation to whom the licensed financial adviser carries out referral activities enquires about any non‑financial advisory service; and | | (ii) | the licensed financial adviser carries out referral activities for more than one relevant person, |
| the licensed financial adviser (whether through any of its representatives or otherwise) must, with the consent of the client, refer that client to every relevant person for which it carries out the referral activities; |
| | (f) | the licensed financial adviser must not receive or deal with client’s money or property in relation to referral activities; | | (g) | the referral activities which the licensed financial adviser may carry out for a relevant person referred to in paragraph (2)(i) may only be those relating to that relevant person’s business of providing will writing services, estate or tax planning services, or any combination of those services; and | | (h) | the licensed financial adviser must do all of the following before the licensed financial adviser refers the client to a relevant person referred to in paragraph (2)(i):| (i) | the licensed financial adviser must conduct due diligence to ensure that the relevant person providing the will writing services, estate or tax planning services, or any combination of those services, is competent and suitably qualified to do so; | | (ii) | the licensed financial adviser must provide a written document to the client which clearly sets out —| (A) | which of the services that the licensed financial adviser provides are financial advisory services and which of the activities carried out by the licensed financial adviser are referral activities; and | | (B) | the role and responsibilities of the relevant person when providing will writing services, estate or tax planning services, or any combination of those services; and |
| | (iii) | the licensed financial adviser must obtain from the client a confirmation in writing that the client understands the written document referred to in sub‑paragraph (ii). |
|
|
(4) A licensed financial adviser may carry on, or may enter into any partnership, joint venture or any other arrangement with any person to carry on, the business of providing training and consultancy in respect of financial planning or financial literacy which are aimed at educating and empowering the public in Singapore (whether through any of its representatives or otherwise), subject to the following conditions:| (a) | where the training and consultancy relate to any investment, the product must be limited to investment products; | | (b) | the licensed financial adviser must, when providing training or consultancy (whether through any of its representatives or otherwise), disclose in writing to every client whether any advice will be provided in the course of the training or consultancy. |
|
(5) A licensed financial adviser may carry on, or may enter into any partnership, joint venture or any other arrangement with any person to carry on, the business of providing will writing services, estate or tax planning services, or any combination of those services (whether through any of its representatives or otherwise), subject to the condition that before the licensed financial adviser provides those services for a client —| (a) | the licensed financial adviser must conduct due diligence to ensure that every one of its representatives, officers or employees who provides those services, or any combination of those services, to the client, is competent and suitably qualified to do so; | | (b) | the licensed financial adviser must provide a written document to the client which clearly sets out —| (i) | which of the services that the licensed financial adviser provides are financial advisory services, and which of those services are will writing services, estate or tax planning services, or any combination of those services; and | | (ii) | the respective roles and responsibilities of the licensed financial adviser when providing financial advisory services, and will writing services, estate or tax planning services, or any combination of those services; and |
| | (c) | obtain from the client a confirmation in writing that the client understands the written document referred to in sub‑paragraph (b). |
|
| (6) A licensed financial adviser must establish and maintain a register of its representatives, officers and employees that carry on any business referred to in paragraphs (2), (4) and (5). |
| (7) The revenue generated by the licensed financial adviser from carrying on any business referred to in paragraphs (2), (4) and (5) in a financial year must not exceed 5% of the licensed financial adviser’s annual revenue derived from its provision of financial advisory services in the financial year, based on the audited financial statements of the licensed financial adviser for that financial year. |
| (8) For the purposes of paragraphs (2), (4) and (5), the licensed financial adviser must notify the Authority of its intention to commence carrying on any business referred to in paragraphs (2), (4) and (5), at least 14 days prior to the date of commencement. [S 815/2015 wef 01/01/2016] [S 222/2023 wef 31/12/2021] |
|
| Prescribed criteria for consent under section 62(2) of Act |
40E. For the purposes of section 62(2) of the Act, a financial adviser must not give its consent to an appointed representative or a provisional representative to engage in any of the acts referred to in section 62(1) of the Act (called in this regulation the restricted act) unless the financial adviser is satisfied that —| (a) | the engagement in the restricted act will not give rise to a conflict of interest for the representative; | | (b) | the engagement in the restricted act will not cause reputational damage to the financial adviser, or to the financial advisory industry, or to both; | | (c) | the engagement in the restricted act is unlikely to result in the representative neglecting the representative’s duties as the financial adviser’s appointed representative or provisional representative, as the case may be; | | (d) | the representative has, before engaging in the restricted act with or for a third party —| (i) | informed the financial adviser that the representative intends to engage in the restricted acts with or for the third party; and | | (ii) | disclosed to the third party that the representative is an appointed representative or a provisional representative of the financial adviser; |
| | (e) | the representative will not be engaging in any of the following acts:| (i) | carrying on, or holding himself out in any way as carrying on, the business of moneylending or being concerned, engaged or employed in the business of moneylending; | | (ii) | organising, promoting or conducting a casino marketing arrangement in or with respect to any casino; | | (iii) | acting as an associate of an international market agent; | | (iv) | being concerned, engaged or employed in the business of an international market agent; | | (v) | being an applicant for an international market agent licence; | | (vi) | exercising or carrying on the business of an estate agent, or acting or holding himself out as an estate agent; | | (vii) | being concerned, engaged or employed in the business of an estate agent; | | (viii) | acting or holding himself out as a salesperson for any licensed estate agent; | | (ix) | marketing any investment that is not an investment product; |
| | (f) | the representative will not invest in, or hold any interest in, any moneylending business or in any business of an international market agent or of an estate agent; and | | (g) | it has in place, in a manner commensurate with the nature, scale and complexity of its business, the following:| (i) | systems and controls to evaluate the criteria set out in paragraphs (a) to (f); | | (ii) | processes in place to maintain records of every evaluation carried out by the financial adviser in relation to any restricted act which its appointed representative or provisional representative engages in. [S 815/2015 wef 01/01/2016] [S 222/2023 wef 31/12/2021] |
|
|
| Conditions for acting as representative despite other employment, business, etc. |
40F. For the purposes of section 22(3) of the Act, a person (called in this regulation the specified person) may act as a representative or hold himself out as doing so despite being concurrently engaged in any of the activities set out in section 22(2)(a) or (b) of the Act (called in this regulation the specified activities) if the following conditions and requirements are complied with:| (a) | the specified person has informed the principal on whose behalf he intends to provide any financial advisory service (called in this regulation the proposed principal) of his engagement in the specified activities; | | (b) | the specified person has obtained, from every person for whom the specified person engages in any of the specified activities, prior approval to be an appointed representative or a provisional representative, as the case may be, of the proposed principal in respect of the financial advisory service provided by the proposed principal; | | (c) | the engagement by the specified person in the specified activities will not —| (i) | give rise to a conflict of interest for the specified person; | | (ii) | cause reputational damage to the proposed principal, or to the financial advisory industry, or to both; and | | (iii) | result in the specified person neglecting his duties as the proposed principal’s appointed representative or provisional representative, as the case may be; |
| | (d) | the specified person must not engage in any of the following acts:| (i) | carrying on, or holding himself out in any way as carrying on, the business of moneylending or being concerned, engaged or employed in the business of moneylending; | | (ii) | organising, promoting or conducting any casino marketing arrangement in or with respect to any casino; | | (iii) | acting as an associate of an international market agent; | | (iv) | being concerned, engaged or employed in the business of an international market agent; | | (v) | being an applicant for an international market agent licence; | | (vi) | exercising or carrying on the business of an estate agent, or acting or holding himself out as an estate agent; | | (vii) | being concerned, engaged or employed in the business of an estate agent; | | (viii) | acting or holding himself out as a salesperson for any licensed estate agent; | | (ix) | marketing any investment that is not an investment product; |
| | (e) | the specified person will not invest in, or hold any interest in, any moneylending business or in any business of an international market agent or of an estate agent. [S 815/2015 wef 01/01/2016] [S 222/2023 wef 31/12/2021] |
|
| Conditions for appointment of appointed representative or provisional representative despite section 22(6) of Act |
40G. For the purposes of section 22(7) of the Act, a licensed financial adviser in Singapore or an exempt financial adviser in Singapore may, despite section 22(6) of the Act, appoint as its appointed representative or provisional representative an individual whom the financial adviser knows or has reasonable grounds to believe, is concurrently engaged in the activities set out in section 22(2) of the Act (called in this regulation the specified activities) if the licensed financial adviser or exempt financial adviser, as the case may be, is satisfied that —| (a) | the individual has obtained from every person for whom the individual engages in any of the specified activities, prior approval to be an appointed representative or a provisional representative of the licensed financial adviser or exempt financial adviser, as the case may be, in respect of any type of financial advisory service provided by the licensed financial adviser or exempt financial adviser, as the case may be; | | (b) | the engagement in the specified activities by the individual —| (i) | will not give rise to a conflict of interest for the individual; | | (ii) | will not cause reputational damage to the licensed financial adviser or exempt financial adviser, or to the financial advisory industry, or to any combination of them; and | | (iii) | is unlikely to result in the individual neglecting his duties as the licensed financial adviser’s or exempt financial adviser’s appointed representative or provisional representative, as the case may be; |
| | (c) | the individual will not engage in any of the following:| (i) | carrying on, or holding himself out in any way as carrying on, the business of moneylending or being concerned, engaged or employed in the business of moneylending; | | (ii) | organising, promoting or conducting a casino marketing arrangement in or with respect to any casino; | | (iii) | acting as an associate of an international market agent; | | (iv) | being concerned, engaged or employed in the business of an international market agent; | | (v) | being an applicant for an international market agent licence; | | (vi) | exercising or carrying on the business of an estate agent, or acting or holding himself out as an estate agent; | | (vii) | being concerned, engaged or employed in the business of an estate agent; | | (viii) | acting or holding himself out as a salesperson for any licensed estate agent; | | (ix) | marketing any investment that is not an investment product; and |
| | (d) | the individual will not invest in, or hold any interest in, any moneylending business or in any business of an international market agent or of an estate agent. [S 815/2015 wef 01/01/2016] [S 222/2023 wef 31/12/2021] |
|
|
