Exemption from licensing for certain ASEAN financial advisers
On 1 January 2019, the Monetary Authority of Singapore (MAS) issued an amendment to the Financial Advisers Regulations that implemented the ASEAN Professional Mobility Framework. The ASEAN Professional Mobility Framework was established by the ASEAN Capital Market Forum. It introduces an “ACMF Pass” to allow licensed professionals to provide advisory services within participating ASEAN jurisdictions, with fast-track registration and no additional licensing requirements. The participating ASEAN countries are Malaysia, the Philippines, Singapore and Thailand.
A Malaysian, Filipino or Thai financial adviser (Foreign FA) and its representatives may, by obtaining an ACMF Pass from the MAS, provide financial advisory services to persons in Singapore without having to obtain a Singapore financial adviser’s licence (or representative’s licence). The financial advisory services may be in respect of shares, bonds and collective investment schemes which are listed in an organised market in any ASEAN country (and not only any of the four participating jurisdictions). However, the Foreign FA and its representatives must not solicit for sales of these products or provide financial advice tailored to the investment needs and objectives of the investor.
The services must also be provided under an arrangement between the Foreign FA and a licensed or exempt financial adviser in Singapore (Singapore FA). The arrangement must be approved by the MAS and the applicants must meet the requirements set out in regulation 32CB of the Financial Advisers Regulations and the Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations.
Where the services are provided to retail investors, the Singapore FA must ensure that one of its representatives accompanies the Foreign FA’s representative. The representative of the Singapore FA must ensure that the Foreign FA’s representative complies with Singapore law.
Proposed amendments to the exemption framework for foreign related corporations of Singapore capital markets services licensees and financial advisers
The MAS currently grants exemptions from licensing requirements on a case-by-case basis to financial institutions in Singapore and their related foreign corporations to enable the related foreign corporations to provide cross-border financial services to customers in Singapore. The MAS is proposing that the case-by-case approval system be replaced with an ex-post notification system provided that certain conditions are met. As these conditions are substantially the same as those currently imposed by the MAS, the main change is to do away with the requirement to seek prior approval.
Under the ex-post notification system, financial institutions in Singapore that enter into arrangements with their related foreign corporations will only need to notify the MAS of the arrangement within 14 days of its commencement. In return, the financial institutions must comply with the following conditions:
- The Singapore financial institution must have the relevant licence or authorisation to carry out the activities that the related foreign corporation intends to carry out in Singapore.
- The related foreign corporations and representatives must be from a properly supervised jurisdiction and be licensed in that jurisdiction.
- The arrangements may only be in respect of customers that are accredited investors, expert investors and institutional investors.
- The Singapore financial institution must have in place policies and procedures to oversee the conduct of the related foreign corporation and its representatives.
- The Singapore financial institution must submit annual certification from its external auditors that the conditions have been complied with.
The proposal has been set out in a Consultation Paper on Proposed Revisions to the Exemption Framework for Cross-Border Business Arrangements of Capital Markets Intermediaries. The closing date for feedback is 31 January 2019.