On 24 August 2023, the Monetary Authority of Singapore (“MAS“) issued its Response to feedback received on the “Consultation Paper on Enhancing Pre- and Post-Transaction Safeguards for Retail Clients” (“Consultation Paper“). The consultation exercise was conducted from 22 June 2021 to 3 August 2021. The proposals in the Consultation Paper aim to raise industry standards and promote greater consumer trust in the financial advisory (“FA“) industry in Singapore. These consist of proposed enhanced regulatory safeguards to be imposed on FA firms to protect the interests of retail clients, particularly selected clients (“SCs“), who meet any two of the following criteria:
- are 62 years of age or older;
- are not proficient in spoken or written English; and/or
- have below GCE “O” or “N” level certifications (or the equivalent).
MAS stated in its Response that it will proceed to implement the key proposals in the Consultation Paper which are highlighted below. The new requirements will be set out in MAS Notice FAA-N16 Recommendation on Investment Products (“FAA-N16“). MAS will consult on the proposed revisions to FAA-N16 in due course. MAS proposes a nine-month transitional period from the time the revised FAA-N16 is published, for the revisions to take effect.
- Strengthening the requirements to determine and document a client’s SC status.
- Requiring a TI to be present for all investment recommendations made to SCs.
- Criteria for qualification as a TI.
- Enhancing requirements relating to call-backs.
- Audio recording of call-backs for SCs and clients of SRs
- Digital advisers (subject to certain conditions) will be exempt from the above requirements.
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