1 Navigator Investment Services Ltd (the “Company”) was reprimanded by MAS on 19 May 2010 for the following breaches under the Securities and Futures (Licensing and Conduct of Business) Regulations (“SFR”).
(A) Regulation 16(2) of the SFR
The Company failed to exercise due care in the handling of 15 customers’ cheques received during the period between 30 June 2006 and 30 December 2008, which resulted in the cheques not being deposited into the customers’ trust account on a timely basis.
This is in contravention of regulation 16(2) of the SFR, which states that the holder of a capital markets services licence shall deposit the money received on account of its customer in the trust account no later than the business day immediately following the day on which the holder receives such money or is notified on the receipt of such money, whichever is later, unless the money has in the meantime been paid to the customer or deposited in an account directed by the customer or unless it is deposited in accordance with regulation 19 or invested in accordance with regulation 20 of the SFR.
MAS notes that the Company has since returned the cheques to its customers.
(B) Regulation 42(2) of the SFR
During the period between 1 October 2002 and 15 September 2009, when the Company received orders for multiple transactions in one application form, the Company failed to ensure that it issued a contract note no later than one business day upon settlement of each transaction. During this period, the Company issued a consolidated contract note only after the settlement of the last transaction. As the settlement period could vary for different securities transactions, this practice resulted in delays in the issuance of contract notes on transactions which were settled earlier.
This is in contravention of regulation 42(2) of the SFR, which states that the holder of a capital markets services licence shall, no later than the business day immediately following a sale or purchase of securities for the transaction, issue a contract note for the transaction.
(C) Regulations 40(1) and 42(2) of the SFR
During the period between 15 November 2009 and 6 January 2010, the Company failed to issue contract notes and monthly statements to customers whose Aviva Online secured mailboxes had become dormant.
This is in contravention of regulations 40(1) and 42(2) of the SFR. Regulation 40(1) states that the holder of a capital markets services licence shall on a monthly basis furnish to each customer a statement of account which contain particulars relating to securities transactions of the customer, amongst others. Regulation 42(2) of the SFR states that the holder of a capital markets services licence shall, no later than the business day immediately following a sale or purchase of securities for the transaction, issue a contract note for the transaction.
MAS notes that the Company has since issued the contract notes and monthly statements to the affected customers.
2 The contraventions were self reported. Upon discovery of the contraventions, the Company took immediate steps to implement the necessary changes to its procedures for the handling of customers’ moneys and for the issuance of contract notes and monthly statements to ensure compliance with the SFR.
