Annual Report 2001/2002

The Introduction of The Financial Advisers Act (FAA)

The FAA aims to improve the level of service and the quality of advice delivered by financial advisers, thereby enhancing consumer and investor confidence in the professionalism and competency of financial advisers in Singapore. Consumers and investors will have a wider choice of investment products to choose from as distributors and product manufacturers would be able to cross-sell each other’s products. The range of policy initiatives introduced under the FAA includes:

Business Conduct Requirements
All financial advisers are required to comply with business conduct requirements stipulated under the FAA. Having a common set of business conduct requirements applicable to all market intermediaries engaging in financial advisory activities ensures a level-playing field and consistent, professional standards across the industry.

Representative to Act for Only One Financial Adviser
Under the FAA, a representative can
only act for one financial adviser. The objectives of this provision are two-fold. Firstly, to provide clarity on the status of the representatives, the financial advisers they represent, and more importantly, where responsibility rests for complaints and redress. Secondly, to ensure that financial advisers monitor and supervise their representatives closely at all times.

Use of the term “Independent”
As the investing public may have certain expectations of financial advisers who call themselves “independent”, it is important to ensure that the term “independent” is used in a proper manner. The Financial Advisers Regulations stipulate three requirements that a financial adviser has to meet to call itself “independent”. First, it does not receive any commission or other benefit from one or more product providers that may create a product bias. Second, it operates free from any direct or indirect restriction relating to the product recommended. Third, it operates with-out any conflict of interest created by a connection to or association with any product provider.

Standards of Conduct for Financial Advisers
MAS will introduce a set of guidelines on Standards of Conduct for Financial Advisers (the Guidelines), which set out the general standards expected of financial advisers and their representatives in conducting financial advisory activities. The aim of the Guide-lines is to help foster higher standards of professionalism and enhance confidence in the financial services industry.

[The Financial Sector] [Regulatory Initiatives] [Legislative Changes] [Financial Advisers Act] [Risk-Based Regulation] [Supervisory Initiatives] [Depositor Protection] [Corporate Governance and Disclosure] [Developing The Disclosure Regime] [Prudential Guidelines for Financial Institutions] [Improved Conduct Practices]

[Regulatory Initiatives] [Developmental Initiatives] [Market Infrastructure]

[Table Of Contents]