MAS has issued today its response to public feedback to its consultation papers issued on 16 June 2009 and 23 June 2009 relating to, among other things, the Representative Notification Framework (RNF), which is targeted for launch on 26 November 2010.
2. Under the RNF, financial institutions (FIs) will have to notify MAS when they intend to appoint a representative to provide financial advisory or capital markets services under the Financial Advisers Act (FAA) and the Securities and Futures Act (SFA). While MAS will no longer issue hardcopy licences to representatives, there is no change in the current admission criteria for all representatives. These criteria include possessing the necessary qualifications, passing specified examinations and meeting fit and proper requirements. Only representatives whose names appear on the public Register of Representatives will be allowed to conduct regulated activities. Representatives continue to be subject to the provisions of the SFA and FAA, and MAS has powers to take regulatory action should they breach these provisions.
3. MAS has reminded FIs, whether they are banks, insurers, holders of capital markets services licences or licensed financial advisers, that they have an existing obligation to ensure that their representatives are fit and proper and meet the competency, financial soundness, and integrity standards required under the SFA and FAA and spelled out in MAS' Fit and Proper Guidelines. Under the RNF, CEOs or Directors of FIs are required to certify that they are satisfied their proposed representatives meet MAS' fit and proper criteria when notifying MAS of their intention to appoint these representatives. While the fit and proper requirements are not new, the certification serves as a reminder to FIs that they have primary responsibility for ensuring that the representatives they support are fit and proper. Prior to placing the record of a proposed representative on the Register of Representatives, if MAS has reasons to believe that a FI has not conducted sufficient due diligence on its proposed representatives, MAS will ask the FI to conduct further checks or refuse to enter the name of a person on the Register of Representatives. MAS will not hesitate to take regulatory actions against FIs who have provided “fit and proper” certifications for their proposed representatives without a proper basis.
4. The new online public Register of Representatives will be available on MAS’ website. Every representative will be issued a unique representative number. Members of the public will be able to use the Register of Representatives to verify whether particular persons are authorised representatives, the regulated activities which the representatives are allowed to conduct, the FIs they act for, and any suspensions, revocations and prohibition orders issued against them by MAS. This will provide consumers with more information on their representatives, and enhance market discipline in the financial industry. MAS encourages all consumers to request for the representative number from their representatives in order to conduct their own checks on the Register of Representatives. Consumers should not deal with any person without a representative number.
5. MAS believes that these features of the RNF will enhance standards in the financial industry. At the same time, the online system will result in greater efficiency in the registration of representatives.
6. The consultation papers also proposed new regulations and amendments to existing regulations to supplement the Securities and Futures (Amendment) Act 2009 and the Financial Advisers (Amendment) Act 2009. To view MAS’ response to the feedback received, please click here.
