Proposed Legislative Amendments to Securities and Futures Act
and Financial Advisers Act
The MAS will be proposing amendments to the Securities and Futures
Act (SFA) and the Financial Advisers Act (FAA) in 2008. The amendments
aim to facilitate new business activities and products in response to
market needs and refine MAS' supervisory and licensing framework.
They also aim to enhance the market misconduct enforcement
framework and fine-tune the legislation to achieve greater clarity,
consistency and operational efficiency. Policy and legislative consultation
on the proposed amendments to the Acts has already been conducted.
Key proposed amendments to the SFA which were publicly consulted
on cover five broad areas: (i) capital markets licensing and business
conduct; (ii) market misconduct enforcement; (iii) disclosure of interests
and offers of investments; (iv) markets and clearing facilities; and (v)
regulatory flexibility for market innovation. The proposed FAA
amendments are similar to those for the SFA in relation to licensing
and business conduct, including the introduction of (i) the Representative
Notification Framework and System that will replace the licensing
regime for representatives, and (ii) perpetual licensing for corporate
licence holders. The other major amendments are to be effected in the
The other major amendments proposed are in relation to the SFA.
They include amendments to impose liability on companies for market
misconduct by their employees in certain circumstances, and to
empower the courts to order the disgorgement of benefits. MAS also
proposes to rationalise the requirements for notification of shareholdings
by substantial shareholders and directors of listed companies which
currently reside in both the Companies Act and the SFA.
In response to industry feedback and to facilitate the development of
the capital markets, it is proposed that the minimum investment
threshold required for an offer to be exempted from prospectus
requirements be lowered from $200,000 to $100,000. Other
amendments related to MAS' emergency powers and the definitions
of "securities" and "futures contract" in the SFA and the FAA to enable
MAS to react more efficiently to market developments.
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