Letters to Editor
Published Date: 15 May 2013

MAS Letter on CMFAS Examination

15 May 2013

The Editor
ST Forum

Dear Editor

MAS agrees with the view that exams are not the only way to test financial know-how (ST “Cai Jin”, 6 May 2013). However, as the Capital Markets and Financial Advisory Services (CMFAS) examinations are centrally administered by the Institute of Banking and Finance and the Singapore College of Insurance (SCI), they set a common standard and benchmark for representatives, and give consumers the assurance that their representative is competent and qualified. We also agree that examinations alone cannot ensure professional conduct by representatives. There are many MAS and industry-led initiatives to raise standards of conduct and ethics.

MAS appreciates the concerns expressed by Mr Vincent Khoo (”Why remisiers not keen on new exam”, ST Forum, 7 May 2013) and Mr Jimmy Ho (“Introductory course enough for investor protection”, ST Forum, 9 May 2013), as well as the anxiety that some representatives have towards examinations and has taken steps to help them. First, MAS worked with the industry on programmes to help professionals, especially those with many years of experience, to build on and update their knowledge of financial markets, products and regulatory regimes.  More recently, we worked with SCI to offer Chinese language examinations for Module 9A because we found that a small number of insurance representatives may be disadvantaged by the language barrier. 

MAS’ view is that industry participants who advise investors on capital markets products or execute such products on behalf of investors must have adequate knowledge about these products.  This ensures that investors receive sound advice on their investment decisions and that their trading instructions are properly executed.  MAS has received complaints against representatives, including relatively experienced ones, who did not understand the products they were selling.  Other major financial jurisdictions, such as the United States and Hong Kong, share this view and also require representatives to demonstrate their competencies through examinations. Australia, too, is moving in this direction.  While the United Kingdom does not require examinations, representatives there must hold qualifications which are equivalent to the first year of a Bachelor’s Degree, before they are allowed to deal in investment products. 

Over the last 16 months, about two-thirds of representatives who are required to take the CMFAS examination for Specified Investment Products have taken and passed the examination.  MAS would like to encourage all industry representatives to do the same so that they can offer their customers more choices and better serve their needs. The Securities Association of Singapore (SAS) is working on a unified approach to dealing with representatives who have not passed the examinations by 30 June 2013, including their commission payments and arrangements for their customers who wish to trade in SIPs. A solution is expected to be announced  by SAS shortly. 

Angelina Fernandez
Director (Communications)
Monetary Authority of Singapore