a) My company is currently licensed under the SIA and/or FTA. Would we need to apply for the new CMS licence or FA licence when the SFA and FAA come into operation?
b) Will conditions and restrictions imposed on licensees under the SIA/FTA continue when they are deemed licensed under the SFA?
c) What is the expiry date of my deemed CMS licence?
d) What are the procedures for application for renewal of the deemed CMS licences?
e) I hold a licence under the SIA/FTA that will be deemed to be a CMS licence. However, I am also in the process of applying for another licence under the SIA/FTA to conduct activities that would be regulated under the SFA. If my application for the second licence is still outstanding when the SFA comes into force, what happens?
f) I hold a dealer's licence under the SIA that will be deemed to be a CMS licence. However, I am also in the process of applying for an IA licence under the SIA/FTA to conduct research and provide advisory services. If my application for the IA licence is still outstanding when the SFA comes into force, what happens?
g) We are a licensed stockbroker. In addition to dealing in securities, we also provide securities financing and custodial services. Do we need to apply to add these two new regulated activities when the SFA comes into force?
h) We are a licensed stockbroker. We also provide securities financing out of a subsidiary company which holds a Moneylender?s licence under the Moneylenders Act. What happens when the SFA comes into force?
i) My company is a licensed dealer and in the course of providing the securities dealing services, we also provide financial advice to our clients. My company will be deemed to hold a CMS licence to conduct dealing in securities when the SFA comes into operation. Does my company need to lodge a notice of commencement of business as a financial adviser under the FAA?
j) My company is a licensed fund manager under the Securities Industry Act. Do we need to hold a CMS licence in respect of the custodial services?
k) If my company holds a FA licence to market collective investment schemes, does my company need to hold a separate CMS licence for dealing in securities in respect of its marketing of collective investment schemes? What if my company is an exempt FA instead?
l) My company holds an Investment Adviser's licence to conduct fund management and a Dealer's licence to distribute third party unit trusts. Will our licences be migrated to the SFA or FAA?
m) My company holds an investment adviser's licence which will be migrated to a CMS licence for fund management. As part of our fund management activities, we manage unit trusts and market our own unit trusts. Do we need to hold a licence under the FAA?
n) My company would like to market collective investment schemes. What licence should my company apply for?
a) My company is currently licensed under the SIA and/or FTA. Would we need to apply for the new CMS licence or FA licence when the SFA and FAA come into operation?
No, it is not necessary for your company to apply for a new licence. Depending on the existing activities of your company, your company's licence will be migrated to the SFA or FAA. If your company's activities fall within the regulated activities of the SFA, such as stockbroking services, fund management, its licence will be migrated to the SFA, ie., it will be deemed to be holding a CMS licence under the SFA, in respect of those regulated activities.
If your company's activities fall within the regulated activities under the FAA, such as advising on securities and futures contracts, its licence will be migrated to the FAA and it will be deemed to be holding a FA licence. Your company will be informed of this in writing.
If your company conducts regulated activities under both the SFA and FAA, its licence will only be converted to a CMS licence under the SFA. As a CMS licensee, your company is exempted from licensing under the FAA, unless its regulated activities under the FAA constitute its main business. However, it is required to comply with the relevant rules under the FAA. For the FA activities, your company is also required to lodge with the Authority a notice of commencement of business as a financial adviser not later than 14 days after FAA comes into operation. The licences of your representatives conducting only FA activities, and not any of the regulated activity under the SFA, would not be migrated to the SFA when it comes into operation.
b) Will conditions and restrictions imposed on licensees under the SIA/FTA continue when they are deemed licensed under the SFA?
All existing conditions will continue to apply. The licensees will be informed should there be any change to the licence conditions.
c) What is the expiry date of my deemed CMS licence?
The expiry date of the deemed CMS licence would correspond to the expiry date of your existing licence under the SIA/FTA. If you hold more than one licence under the SIA/FTA, the expiry date of the deemed CMS licence would be the same as that of the last of your existing licences to expire, counting from the implementation date of the SFA.
For example, if your company holds three licences - a dealer's licence, an investment adviser's (IA) licence and a futures broker's (FB) licence with the following expiry dates:
Dealer's licence 5 May 2003
IA licence 14 October 2002
FB licence 10 March 2003
Assuming that the SFA comes into effect on 1 September 2002, the last licence to expire from this date would be your dealer's licence. Accordingly, your deemed CMS licence would expire on 5 May 2003.
d) What are the procedures for application for renewal of the deemed CMS licences?
An application for the renewal of the deemed licence should be made at least one month before the date of expiry of the deemed licence. The application should be made in prescribed form and submitted together with the prescribed application fee. MAS will advise your company when to pay the licence fee.
Extended grace period for the submission of renewal applications is provided for the following licensees, where:
(a) date of expiry of the deemed licence is in the same month as the month in which Part IV of the SFA comes into force;
(b) date of expiry of the deemed licence is in the month following the month in which Part Part IV of the SFA comes into force.
For situation (a), the licensee is given a grace period of up 2 months after the date of expiry of the deemed licence; and
For situation (b), the licensee is given a grace period of up to 1 month after the date of expiry of the deemed licence, to submit the renewal application.
The holder of the deemed licence shall be entitled to carry on regulated activities authorised by the deemed licence until the date on which the deemed licence is renewed under the SFA, or the application is refused or withdrawn, as the case may be.
If a licensee fails to submit the renewal application by the grace period, its licence would lapse and it would have to cease its regulated activities. To restore its business, it would need to submit a new licence application and wait till the application is approved.
e) I hold a licence under the SIA/FTA that will be deemed to be a CMS licence. However, I am also in the process of applying for another licence under the SIA/FTA to conduct activities that would be regulated under the SFA. If my application for the second licence is still outstanding when the SFA comes into force, what happens?
As your licence will be deemed to be a CMS licence under the SFA, your outstanding licence application will be deemed to be an application to vary your deemed CMS licence for addition of regulated activities. When your application to add regulated activity is approved, the Authority will issue you a CMS licence showing all regulated activities that you are licensed to conduct. The expiry date of this CMS licence will be the same as your deemed CMS licence.
The Authority will refund your prepaid licence fee for the licence application under the SIA/FTA, and charge you the licence fee applicable to that regulated activity under the SFA. Application fee to add that regulated activity under the SFA is waived.
f) I hold a dealer's licence under the SIA that will be deemed to be a CMS licence. However, I am also in the process of applying for an IA licence under the SIA/FTA to conduct research and provide advisory services. If my application for the IA licence is still outstanding when the SFA comes into force, what happens?
Conducting research and providing advisory services are regulated under the FAA. A CMS licensee is exempted from holding a FA licence in respect of its financial advisory services, unless such services constitute its main business. As your dealer's licence under the SIA will be deemed to be a CMS licence, you would not need an additional licence to carry out the two new activities. The Authority will refund your prepaid licence fee for the IA licence, if any. For your FA activities, you are required to lodge with the Authority a notice of commencement of business not later than 14 days after the commencement of your business as a financial adviser. Details of the documents to be lodged will be provided in the regulations to be issued under the FAA. Your staff who carry out the FA activities would similarly be exempted from a representative licence under the FA. But they would be required to comply with the examination requirements and conduct rules under the FAA. Under the provisions of the FAA, your company would be required to maintain a register of staff conducting the FA activities.
g) We are a licensed stockbroker. In addition to dealing in securities, we also provide securities financing and custodial services. Do we need to apply to add these two new regulated activities when the SFA comes into force?
When the SFA comes into force, you would be deemed to hold a CMS licence. You are allowed to continue to conduct all your existing activities, including the securities financing and custodial services. When you renew your deemed CMS licence, ensure that you indicate the appropriate regulated activities you have been conducting, such as dealing in securities, securities financing and custodial services, on the renewal application form.
h) We are a licensed stockbroker. We also provide securities financing out of a subsidiary company which holds a Moneylender?s licence under the Moneylenders Act. What happens when the SFA comes into force?
As your subsidiary company is a separate legal entity, it would be required to hold a CMS licence for securities financing in order to continue with such activity. A grace period of 6 months is given for such company to apply for the requisite licence.
i) My company is a licensed dealer and in the course of providing the securities dealing services, we also provide financial advice to our clients. My company will be deemed to hold a CMS licence to conduct dealing in securities when the SFA comes into operation. Does my company need to lodge a notice of commencement of business as a financial adviser under the FAA?
This would depend on whether your company is considered to be carrying on a business of providing financial advisory services. If your company is indeed carrying on such a business, it would be required to lodge the commencement notification. Whether a company?s provision of financial advisory services constitute a business would depend on the facts and circumstances of each case. However, if the financial advice is provided by the company in a systematic and continuous manner, then the company is likely to be regarded as conducting a business of financial advisory services.
j) My company is a licensed fund manager under the Securities Industry Act. Do we need to hold a CMS licence in respect of the custodial services?
No. Fund management companies are required to deposit customers' money and other assets with a custodian. They are not required to hold a CMS licence in respect of the custodial services.
k) If my company holds a FA licence to market collective investment schemes, does my company need to hold a separate CMS licence for dealing in securities in respect of its marketing of collective investment schemes? What if my company is an exempt FA instead?
No. A company which is already licensed or exempt from licensing under the FAA for marketing collective investment schemes would not be required to hold a CMS licence for dealing in securities in respect of its marketing of collective investment schemes.
l) My company holds an Investment Adviser's (FA) licence to conduct fund management and a Dealer's licence to distribute third party unit trusts. Will our licences be migrated to the SFA or FAA?
Your company will be migrated to the SFA and be deemed to hold a CMS licence to conduct fund management. The business of marketing unit trusts is a regulated activity under the FAA. However, as your company is a CMS licensee, it is exempted from the requirement to hold a FA licence to distribute unit trusts, unless such distribution of unit trusts constitutes its main business. Your company is required to comply with all relevant provisions of the FAA. Please refer to (f) above.
m) My company holds an IA licence which will be migrated to a CMS licence for fund management. As part of our fund management activities, we manage unit trusts and market our own unit trusts. Do we need to hold a licence under the FAA?
No. Your company will be considered as an exempt FA in respect of the marketing of its own unit trusts. However, your company and its staff who are involved in marketing the unit trusts are required to comply with all relevant provisions in the FAA. Please refer to (f) above.
n) My company would like to market collective investment schemes. What licence should my company apply for?
Marketing of collective investment schemes is a regulated activity under the FAA. A company which conducts such activity would need to hold a FA licence under the FAA. However, if your company is already holding a CMS licence, it would be considered as an exempt FA in respect of the activity of marketing collective investment scheme, unless such activity is your company's main activity. However, it will be required to lodge with the Authority a notice of commencement of business not later than 14 days after the commencement of your business to market collective investment schemes under the FAA. Please refer to (f) above.
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