Singapore: MAS Proposes Revisions To The Competency Requirements For Representatives Conducting Regulated Activities Under The Securities And Futures Act And Financial Advisers Act

Last Updated: 22 December 2016
Article by Eric Chan
Most Read Contributor in Singapore, February 2017

On 12 December 2016, the Monetary Authority of Singapore ("MAS") issued a consultation paper inviting comments on proposed amendments to the competency requirements for appointed representatives under the Securities and Futures Act (Chapter 289) (the "SFA") and the Financial Advisers Act (Chapter 110) (the "FAA"). The amendments relate to the Capital Markets and Financial Advisory Services Examination ("CMFAS") requirements, as well as Continuing Professional Development ("CPD") training, and are being proposed in light of changes in the regulatory landscape for the capital markets and financial advisory industries.

MAS has stated that its proposals were made with the following principles and considerations in mind:

  1. Raising the competency of appointed representatives;
  2. Building a culture of high ethical standards in the financial industry; and
  3. Offering greater customisation and flexibility to appointed representatives to fulfil their competency requirements.

To recap, appointed representatives are the individual professionals (by whatever name they are called) that carry out the relevant intermediary activity for which the entity they represent are licensed under Part IV of the SFA or under the FAA. Appointed representatives are required to meet requirements set out in notices issued by MAS under the SFA or under the FAA (as the case may be).

This note summarises the various proposals to the CMFAS and CPD requirements.

Enhancement of CMFAS requirements

A. Introduction of ethics and skills content into rules and regulations modules

MAS proposes to introduce content on ethics and skills to the CMFAS curriculum to raise the professional standards of appointed representatives, and better align the CMFAS framework with best practices in other leading jurisdictions. This is along with the existing curriculum, which focuses on rules & regulations and product knowledge.

In relation to content on ethics, the additional content aims to test appointed representatives on their understanding of ethical principles, as well as their responses in ambiguous situations. In relation to content on skills, MAS has stated that whilst it does recognise that many skills are developed through work experience and might be difficult to assess within a paper examination, nevertheless skills-related content will help equip appointed representatives with some understanding, especially with regard to regulatory obligations. Ultimately, the aim would be to help ensure that an appointed representative is suitably equipped with the requisite skills to perform and execute his duties.

This additional content will be added to the current CMFAS module on rules and regulations, under a new Rules, Ethics and Skills module (the "RES module"). This module is intended to be role-based and tailored according to the job function of the appointed representative, so as to provide flexibility when appointed representatives move between roles and without the appointed representative having to re-take the same product knowledge module. In revising the existing list of modules available, MAS has also indicated that it would discontinue the existing module M4B on rules and regulations for advising on corporate finance (solely on debt securities) due to low enrolment rates in recent years.

B. Customisation of content of CMFAS modules

To streamline the requirements and ensure that the CMFAS modules remain relevant, MAS will also streamline and customise the content of each RES module to map against the appointed representatives' job requirements, rather than against the broader category of regulated activity which they will be conducting under the SFA and/or FAA. This followed from feedback received that some representatives, whose roles cover more than one class of regulated activity (such as dealing staff), were presently being required to clear more than one CMFAS module relating to rules and regulations.

C. Streamlining of securities and derivatives exchange rules content

There are two significant changes proposed in relation to exchange-related content. First, MAS proposes to offer two add-on modules that cover only securities exchange-related and derivatives exchange-related content. In this way, an appointed representative who shifts from a non-exchange member firm to an exchange member firm will have the option of enrolling in these add-on modules without having to repeat the content modules applicable equally to exchange member firms and non-exchange member firms (for which he would already have previously been assessed). Secondly, MAS proposes that exchange-related content in the CMFAS curriculum be principle-based in order to give appointed representatives the flexibility of trading on different exchanges without necessarily having to take additional examinations. Thus, an appointed representative who engages in a single regulated activity of dealing in securities, but does so on a number of different exchanges, will only be required to clear a single examination module.

D. Redesigning of the product knowledge modules

In 2015, MAS had proposed to expand the scope of coverage of the SFA to include over-the-counter ("OTC") derivatives contracts. With this broadening in scope, plans have already been announced for various terms in the SFA to be revised.

In alignment with these changes, corresponding amendments to the CMFAS product knowledge module M6A (which covers futures and other securities-based derivatives contracts) will be made so as to include new content on commodity, credit, foreign exchange, and rate-based derivative contracts. This will mean that appointed representatives dealing in exchange-traded derivatives contracts and/or OTC derivatives contracts will, moving forward, be required to take module M6A as revised.

Regardless of the above, MAS will still retain content on collective investment schemes ("CIS") (as defined under the upcoming amended SFA) within the CMFAS module M6, in order to allow trading representatives who deal in securities as well as in CIS to continue to take a single module. Further, content on CIS within module M6 will be made comparable to module M8 so that appointed representatives who are dealing or advising in both securities and CIS need not further take module M8.

MAS will also retain the current single product knowledge modules (i.e. modules M8, M8A, M9 and M9A) in order that the framework can remain flexible for those appointed representatives who wish to work within a niche product market or who do not wish to transact in complex or multiple product classes. However, MAS will also introduce four new modules, which are combinations of the existing product knowledge modules, as follows:

  1. CIS: Modules M8 and M8A to be combined and renamed "module CM-CIS";
  2. Life insurance and investment-linked policies: Modules M9 and M9A to be combined and renamed "module CM-LIP";
  3. Life insurance, investment-linked policies and CIS: Modules M8, M8A, M9, M9A to be combined and renamed "module CM-LIC"; and
  4. Securities, CIS, derivatives, CIS (specified investment products) and foreign exchange: Modules M6 and M6A to be combined and renamed "module CM-CMP".

These changes aim to provide flexibility for appointed representatives who deal in multiple product classes, by enabling them to sit for a lesser number of examination modules and thus enabling them to potentially clear the CMFAS requirements within a shorter time frame.

E. Applicability of the revised CMFAS framework

The proposed new CMFAS framework will be implemented when the other proposed amendments to the SFA take effect. Additionally, it will only affect appointed representatives who are appointed after the date of implementation of the new framework (that is, new entrants to the industry). Existing appointed representatives will be subject to the new CMFAS framework only when they undertake a new or an additional regulated activity, or if there is a change in the scope of their regulated activity arising from the amendments to the SFA.

Alignment of Continuing Professional Development training requirements

In relation to CPD requirements, presently, appointed representatives under the FAA are required to undergo 30 hours of structured CPD training annually, with 12 hours being mandatory (in turn broken down into 4 hours of CPD training on ethics and 8 hours of CPD training on rules and regulations). By contrast, for appointed representatives under the SFA, at present, the CPD training requirements are more generally worded. MAS thus proposes to align the CPD training requirements across the SFA and the FAA. However, appointed representatives who conduct both SFA and FAA activities will not be required to take on the additional hours of CPD training beyond 30 hours. Thus, the fulfilment of the requisite 30 hours can be achieved through a combination of training under the SFA or the FAA.

Consultation Period

The consultation period ends on 13 January 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.