Media Releases
Published Date: 20 March 2003

MAS issues consultation papers as part of SFA and FAA and extends grace period to industry on implementation of two initiatives

Singapore, 20 March 2003 ...The Monetary Authority of Singapore (MAS) today released a number of initiatives as part of its ongoing implementation of the Financial Advisers Act (FAA) and Securities and Futures Act (SFA). This includes the release of three consultation papers and the extension in the grace period for implementation of two initiatives.

2   MAS issued consultation papers on:

A proposal to issue a temporary representative's licence to individuals residing outside Singapore to enable licensed entities to bring specialist expertise into Singapore on a short-term basis. 

Proposals related to the approval of arrangements between foreign companies and locally regulated affiliates under the SFA and FAA. This recognises the increasingly global nature of business operations of many of the licensed intermediaries who operate here in Singapore.

Details on the consultation papers are available in Annex 1.

3   MAS is also extending the grace period for the implementation of:

The Notices under the FAA to intermediaries which provide execution related advice while MAS works with industry to develop modified business conduct rules for this activity. The grace period will be 12 months.

The Notice relating to cancellation period for unit trusts.  MAS is aligning the commencement date of the Notice to 1 July 2003 when other Collective Investment Schemes (CIS) requirements are also due to commence.

Details on the extension of grace period for these two initiatives are available in Annex 2.


Annex 1

1   Consultation on Proposal to Grant Temporary Licenses (22.6 KB) 

The SFA requires any person acting as a representative of a Capital Markets Services license holder to hold a representative's license.  To allow greater flexibility in addressing temporary staffing needs, MAS proposes to issue temporary representative's licenses to individuals residing outside Singapore on a short-term basis.  MAS would like to seek industry comment on our approach in assessing applications for the temporary license, as set out in the consultation paper.

2   Consultation Papers on Proposed Guidelines for Approving Arrangements made by Companies Operating in Singapore under the SFA (9.96 KB)  / FAA (9.96 KB) , with Related Foreign Corporations

Foreign companies are allowed to carry out a regulated activity under the SFA or provide a financial advisory service under the FAA in Singapore without a need to hold a license, provided that such activity or service is effected through a licensed related corporation in Singapore, or an entity exempted under the stipulated provisions under the SFA/FAA, and that such activity is carried out or service is provided under an arrangement approved by MAS. To give greater clarity on how applications for such approvals will be assessed, MAS is releasing a set of draft guidelines and is seeking industry feedback. 

3   The consultation papers are posted on the MAS website at  Comments should reach MAS by 19 April 2003. 

Annex 2

1   FAA Notice on Recommendations on Investment Products and FAA Notice on Information to Clients and Product Information Disclosure

1.1 The Notice on Recommendations on Investment Products sets out the standards to be maintained by financial advisers and their representatives with respect to recommendations made on investment products. This includes standards on Know Your Client, Needs Analysis and Documentation and Record Keeping. The Notice on Information to Clients and Product Information Disclosure sets out the general disclosure principles that apply to all disclosures made by a financial adviser to its clients, and outlines specific requirements as to the form and manner of disclosure required in relation to designated investment products, status of a financial adviser's representative, remuneration of the financial adviser, conflict of interest and marketing materials. These 2 Notices come into effect on 1 April 2003. 

1.2 In response to industry queries MAS indicated earlier this year that it would look at the application of the notices to execution related advice. MAS will work with the relevant industry associations to study how a set of modified business conduct rules should apply to execution related advisory activities of intermediaries. In the interim, MAS will extend the grace period for the two Notices in respect of execution related advice given by intermediaries by 12 months. 

2   Notice on Cancellation Period for Collective Investment Schemes constituted as Unit Trusts (32.5 KB) 

2.1 This Notice sets out the obligations of a manager of a collective investment scheme (CIS) constituted as a unit trust in relation to a cancellation of purchase of units in a unit trust by an investor. 

2.2 MAS will be extending the deadline by 3 months until 1 July 2003 for fund managers and trustees to comply with the Notice. This is in line with the 1 July deadline for all existing CIS schemes to comply with the provisions of the SFA. 

3   Amendments have been made to the Notices to effect these changes. The revised Notices can be found at the MAS website at