Financial Adviser’s Licence 

financialtreat – will explain about the Financial Adviser’s Licence which you will get in the following article. let’s look at this article carefully!

A company must hold a financial adviser (FA)’s licence to conduct financial advisory services regulated under the Financial Advisers Act, unless otherwise exempted. Individuals representing licensed FAs or exempt FAs need to be appointed as representatives.

Who needs to apply?

If your company wishes to conduct regulated activities under the Financial Advisers Act (FAA) , it must hold a financial adviser’s (FA) licence unless otherwise exempted. Individuals conducting financial advisory activities on behalf of licensed FAs or exempt FAs need to be appointed as representatives.

You can find out more about financial advisers here.

MAS also publishes a Licensing and Registration Report for Capital Markets Intermediaries (including financial advisers) here. What are the admission criteria?

When assessing an application for an FA licence, MAS takes into account factors such as:

  • Fitness and propriety of the applicant, its shareholders and directors.
  • Track record, management expertise and financial soundness of the applicant and its parent company or major shareholders.
  • Ability to meet the minimum financial requirements and professional indemnity insurance requirements prescribed under the FAA.
  • Strength of internal compliance systems.
  • Business plans and projections.

Your company will also need to appoint the following individuals:

  • Minimum of 2 directors, at least one of whom is resident in Singapore.
  • Chief Executive Officer with at least 10 years of relevant experience, of which at least 5 years must have been in a managerial capacity and is resident in Singapore.
  • Minimum of 3 full-time Singapore-based individuals with at least 5 years of relevant working experience.

You can refer to the Guidelines on Criteria for the Grant of a Financial Adviser’s Licence for more information.

What are the applicable financial requirements?

MAS conducted a Financial Advisory Industry Review (FAIR) in 2012. One of the objectives of FAIR was to enhance the admission criteria and ongoing requirements for FA applicants and licensees. To ensure a smooth transition for new entrants when the enhanced requirements come into effect, MAS expects all FA licence applicants to meet the enhanced requirements (listed below).

If your company only advises others by issuing or promulgating research analyses or research reports concerning investment products, you are require to maintain a minimum base capital of S$250,000. For all other types of financial advisory activities, you are require to maintain a minimum base capital of S$500,000, or a lower base capital of S$300,000 plus an additional professional indemnity insurance of S$500,000.

(ii) Financial resources requirement

You are require to maintain financial resources that are the higher of:

a) ¼ of your relevant annual expenditure of the preceding financial year; or

Read more financial advisor:

(iii) Professional indemnity insurance (PII)

You are require to have in force a PII policy with varying limits depending on the type of financial advisory services provide. The breakdown is as follows:

a) For those advising others by issuing or promulgating research analyses or research reports concerning any investment product only, a PII limit of S$500,000 applies;

i. With revenue not more than S$5 million, a PII limit of S$1 million applies;

ii. With revenue more than S$5 million, a PII limit that is the lower of (i) 20% of gross revenue or (ii) S$10 million applies.

You can find more details on the financial requirements in Part II, Questions 7, 7A and 8 of the FAQs on Financial Advisers Act, Financial Advisers Regulations, Notices and Guidelines.

How do I apply for an FA licence?

If your company is applying for an FA licence, you should submit Form 1 under the Financial Advisers Regulations (FAR) . If your company already holds an FA licence for certain regulate activities and wishes to add another activity to the FA licence, you should submit Form 2 under the FAR .

In addition, if your company hires or appoints individuals to conduct a regulate activity under your licence, you have to appoint these individuals as an appointe or provisional representative for that regulate activity. You can refer to the page Appointing a Representative for License FAs or Exempt FAs for more information.

How much is the application fee and how do I make payment?

You will need to pay a non-refundable application fee of S$500. A fee advice and instructions on the amount and manner of payment for the application fee will be emaile to your company.

What is the processing time require?

MAS expects to take not more than 4 months to review and process an application if the business model is straightforward, the applicant meets the relevant admission criteria fully, and the application is complete and clear. For more complex cases, or cases where information is assesse to be incomplete or Adviser inaccurate, MAS will need a longer time to review the application.

Please ensure that your company’s application is complete, correct and accompanie by the requisite supporting documents.

What is the annual fee to be paid by a holder of an FA licence?

For corporate annual fees, you will need to pay a fixe fee of S$2,000 per year, regardless of the number of different financial advisory services your company provides. There will also be a variable corporate annual fee calculate at S$5 per representative from the 101st representative onwards as at 1 January of the calendar year.

More information on the computation. And payment of annual fees can be found at Guidelines on Licence Applications. Representative Notification and Payment of Fees.

What is the validity of the FA licence?

The licence is valid until:

  • The licensee stops conducting all the regulate activities on the licence, and the licence is cancelle by MAS.
  • The licence is revoke by MAS.
  • The licence lapses in accordance with section 19 of the FAA .

All entities that hold an FA licence are liste on the Financial Institutions Directory. Correspondingly, all entities that cease to hold a licence will be remove from the Financial Institutions Directory.

What if a financial adviser wants to provide insurance broking services under the Insurance Act (IA)?

If a financial adviser also intends to provide insurance broking services to its customers. It will have to lodge a notification for commencement. (using Form E under the Insurance (Intermediaries) Regulations ) of business as an exempt insurance broker.

So Individuals appointe as broking staff by exempt insurance brokers are not require. To be registere or authorise by the MAS but must comply with the minimum standards. And examination requirements for broking staff set out in MAS Notice 502.

The exempt insurance broker and its broking staff will have to comply with the relevant conduct requirements under the IA. Thus the article on the Financial Adviser’s Licence . So I Hope it will be useful and thank you.

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