Corporate finance advisers

Corporate finance advisers are licensed and governed under the Securities and Futures Act 2001 (SFA)  and its subsidiary legislation, including the regulations notices guidelines  and circulars  issued under the SFA.

When is licensing required?

The scope of a corporate finance adviser’s activities may include:

  • Giving advice on the laws or regulatory requirements on fund-raising by an entity, trust or collective investment scheme;
  • Giving advice on an offer to acquire or to dispose of capital markets products; and/or
  • Giving advice relating to an arrangement, reconstruction or take-over of a company or a business trust, or any of its assets or liabilities.

Capital markets products include securities, securities-based derivatives contracts and collective investment schemes.

 

For example, if a company intends to provide advice to other companies on how to raise capital, for instance via a private or public offering, and the conduct of this activity is carried out with system, repetition and continuity, this company is likely to be considered as a corporate finance adviser and may need to be licensed.

 

Corporate finance advisers are required to hold a CMS licence in advising on corporate finance, unless an exemption apply. Corporate finance advisers which also carry out underwriting and placement activities may also be required to hold a CMS licence for dealing in capital markets products.

 

The definitions for the above regulated activities can be found in Part 2 of the Second Schedule to the SFA .

 

In addition, a corporate finance adviser will have to appoint individuals who conduct regulated activities on its behalf as representatives.

 

Details on how to apply for a corporate licence and appoint a representative can be found on the Capital Markets Services (CMS) Licence page and Appointing a Representative for CMS Licensees or Exempt Financial Institutions page respectively.

What licensing exemptions are available?

There are exemptions available for advising on corporate finance. Examples of exemptions are as follows:

  • If a company gives advice to a related company and such advice is not for the offer of capital markets products to the public. Where the related company is a public company or a company listed on an exchange or its subsidiary, such advice is also not circulated to the related company’s shareholders;
  • If a company gives advice to accredited, expert or institutional investors and such advice is not for the offer of capital markets products to the public. Where the accredited, expert or institutional investor is a public company or a company listed on an exchange or its subsidiary, such advice is also not circulated to that investor’s shareholders. The company should notify MAS by submitting Form 22 within 14 days after the commencement of business;
  • If a company is already licensed by MAS as a bank, merchant bank, finance company or insurance company, the company will however be required to comply with the representative notification, and business conduct requirements under the SFA. The company should notify MAS by submitting Form 26 within 14 days prior to commencing the regulated activity under the SFA; or
  • If a company gives advice on the laws or regulatory requirements on fund-raising that does not involve any capital markets products.

More information on licensing exemptions can be found in Section 99 of the SFA and the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations (SF(LCB)R) .

What are the business conduct requirements?

A corporate finance adviser is required to put in place policies, procedures and controls which are commensurate with its nature, scale and complexity of business, including an independent compliance function in Singapore. The corporate finance adviser should also ensure compliance with MAS’ requirements on anti-money laundering and countering terrorism financing.

 

More information on the conduct and other requirements are found in the SF(LCB)R , and the applicable Notices and Guidelines .

What if a corporate finance adviser wants to conduct other regulated activities under the SFA or Financial Advisers Act (FAA)?

A corporate finance adviser may also carry out other regulated activities under the SFA or provide financial advisory services under the FAA . If you wish to find out how to conduct additional regulated activities or services under the SFA or FAA with your existing CMS licence, please refer to the Capital Markets Services (CMS) Licence page.