Key Supervisory and Regulatory Initiatives

ENHANCING REGULATORY FRAMEWORKS

Refining Regulatory Frameworks - SFA and FAA Amendments
The second of a two-phase set of amendments to the SFA and the Financial Advisers Act (FAA) was passed by Parliament in January 2005. The amendments take into account the feedback MAS received in the course of public consultation.

The SFA amendments implement the private-sector led Company Legislation and Regulatory Framework Committee’s recommendations. The Act focuses on capital raising rules and provides greater regulatory certainty to the industry on provisions relating to investment offers. It also refines the liabilities of professionals involved in capital raising and simplifies some prospectus rules. On markets and clearing facilities, the Act calibrates the level of regulation to better match the different levels of systemic risk posed by different bodies. The Act also fine-tunes the rules on the conduct of intermediaries.

The FAA amendments ensure that the regulation of financial advisers (FAs) remains business friendly, while promoting fair treatment of customers. The Act excludes the provision of generally circulated advice by financial advisers from the requirement to provide a reasonable basis for recommendations. It also extends MAS’ powers to issue Prohibition Orders to a person with any convictions related to financial advisory activities in a foreign country.