Financial Advisers Act 2001

Financial Advisers Act 2001 2020 REVISED EDITION This revised edition incorporates all amendments up to and including 1 December 2021 and comes into operation on 31 December 2021 An Act to regulate financial advisers and their representatives and supervisors, and for other purposes relating thereto or connected therewith. [18/2015] [6 August 2002: Section 106 ; 1 October 2002: Sections 1 to 105 ] PART 1 PRELIMINARY Short title 1. This Act is the Financial Advisers Act 2001. Interpretation 2.—(1) In this Act, unless the context otherwise requires — “advocate and solicitor” means an advocate and solicitor of the Supreme Court or a foreign lawyer as defined in section 2(1) of the Legal Profession Act 1966; “appointed representative”, in respect of a type of financial advisory service, has the meaning given to that expression by section 23, and “appointed representative” means an appointed representative in respect of any type of financial advisory service; “approved exchange” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “approved holding company” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “auditor” means a public accountant who is registered or deemed to be registered under the Accountants Act 2004; “Authority” means the Monetary Authority of Singapore established under the Monetary Authority of Singapore Act 1970; “book” includes any record, register, document or other record of information and any account or accounting record, however compiled, recorded or stored, whether in written or printed form or on microfilm or by electronic process or otherwise; “capital markets products” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “collective investment scheme” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “commodity” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “company” has the meaning given by section 4(1) of the Companies Act 1967; “connected person”, in relation to — (a) an individual, means — (i) the individual’s spouse, son, adopted son, stepson, daughter, adopted daughter, stepdaughter, father, stepfather, mother, stepmother, brother, stepbrother, sister or stepsister; and (ii) a firm, a limited liability partnership or a corporation in which the individual or any of the persons mentioned in sub‑paragraph (i) has control of at least 20% of the voting power in the firm, limited liability partnership or corporation, whether such control is exercised individually or jointly; or (b) a firm, a limited liability partnership or a corporation, means another firm, limited liability partnership or corporation in which the firstmentioned firm, limited liability partnership or corporation has control of at least 20% of the voting power in that other firm, limited liability partnership or corporation, and a reference in this Act to a person connected to another person is to be construed accordingly; “corporation” has the meaning given by section 4(1) of the Companies Act 1967; “dealing in capital markets products” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “director” has the meaning given by section 4(1) of the Companies Act 1967; “executive officer”, in relation to a licensed financial adviser, means any person, by whatever name called, who is — (a) in the direct employment of, or acting for or by arrangement with, the licensed financial adviser; and (b) concerned with or takes part in the management of the licensed financial adviser on a day-to-day basis; [Act 12 of 2024 wef 30/08/2024] “exempt financial adviser” means a financial adviser who is exempt under section 20(1) from holding a financial adviser’s licence; “financial adviser” means a person who carries on a business of providing any financial advisory service, but does not include any person specified in the First Schedule; “financial adviser’s licence” means a licence granted under section 10 in respect of a financial adviser, and “licensed financial adviser” is to be construed accordingly; “financial advisory service” means all or any of the services specified in the Second Schedule; “financial journalist” means a person who contributes advice concerning specified products, or prepares analyses or reports concerning specified products, for publication in a newspaper, but does not include such person or a person belonging to such class of persons as may be prescribed; “financial year” has the meaning given by section 4(1) of the Companies Act 1967; “firm” has the meaning given by section 2(1) of the Business Names Registration Act 2014; “futures contract” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “independent sales audit unit”, in relation to a licensed financial adviser, means a unit of the licensed financial adviser which — (a) audits the quality of the provision of financial advisory services by representatives of the licensed financial adviser; and (b) is independent from all units of the licensed financial adviser which provide financial advisory services; “investment product” means — (a) any capital markets products; (b) spot foreign exchange contracts other than for the purposes of leveraged foreign exchange trading; (c) any life policy; or (d) any other product as may be prescribed; “leveraged foreign exchange trading” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “licensed insurer” means an insurer who is for the time being licensed under section 11 of the Insurance Act 1966; “life policy” has the meaning given by the First Schedule to the Insurance Act 1966, but does not include any contract of reinsurance; “limited liability partnership” has the meaning given by section 2(1) of the Limited Liability Partnerships Act 2005; “manager” and “partner”, in relation to a limited liability partnership, have the respective meanings given by section 2(1) of the Limited Liability Partnerships Act 2005; “newspaper” has the meaning given by section 2(1) of the Newspaper and Printing Presses Act 1974; “officer” has the meaning given by section 4(1) of the Companies Act 1967; “organised market” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “prescribed written law” means — (a) for the purpose of Division 3 of Part 6 — this Act or any of the following Acts, and any subsidiary legislation made under this Act or those Acts: (i) Banking Act 1970; (ii) Credit Bureau Act 2016; (iii) Deposit Insurance and Policy Owners’ Protection Schemes Act 2011; (iv) Finance Companies Act 1967; (v) Financial Holding Companies Act 2013; (vi) Financial Services and Markets Act 2022; (vii) Insurance Act 1966; (viii) Monetary Authority of Singapore Act 1970; (ix) Payment Services Act 2019; (x) Securities and Futures Act 2001; (xi) Trust Companies Act 2005; (xii) such other written law as the Authority may prescribe by regulations made under section 135; and (b) for the purpose of any other provision — this Act or any of the following Acts, and any subsidiary legislation made under this Act or those Acts: (i) Banking Act 1970; (ii) Finance Companies Act 1967; (iii) Financial Services and Markets Act 2022; (iv) Insurance Act 1966; (v) Monetary Authority of Singapore Act 1970; (vi) Payment Services Act 2019; (vii) Securities and Futures Act 2001; (viii) such other written law as the Authority may prescribe by regulations made under section 135; [Act 12 of 2024 wef 24/01/2025] “principal”, in relation to a representative, means a person whom the representative is in the direct employment of, is acting for or is acting by arrangement with, and on behalf of whom the representative provides or will provide any financial advisory service; “prohibition order” means, unless the context otherwise requires — (a) a prohibition order made under section 68(1) as in force immediately before the date of commencement of section 200(1)(b) and (2) to (7) of the Financial Services and Markets Act 2022; (b) a prohibition order made under section 68(1) as in force immediately before the date of commencement of section 200(1)(b) and (2) to (7) of the Financial Services and Markets Act 2022, and as continued by section 217(2) of the Financial Services and Markets Act 2022; or (c) a prohibition order made under section 7(1) of the Financial Services and Markets Act 2022; [Act 18 of 2022 wef 31/07/2024] “provisional representative”, in respect of a type of financial advisory service, has the meaning given to that expression by section 24, and “provisional representative” means a provisional representative in respect of any type of financial advisory service; “public register of representatives” means the register of that name under section 73(3); “recognised market operator” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “record” means information that is inscribed, stored or otherwise fixed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form; “regulated financial institution” means a person who carries on a business the conduct of which is regulated or authorised by the Authority or, if it is carried on in Singapore, would be regulated or authorised by the Authority; [Act 12 of 2024 wef 30/08/2024] “regulatory authority”, in relation to a foreign country or jurisdiction, means an authority of the foreign country or jurisdiction exercising any function that corresponds to a regulatory function of the Authority under this Act, the Monetary Authority of Singapore Act 1970 or any of the written laws set out in the Schedule to that Act; [Act 12 of 2024 wef 30/08/2024] “related corporation” has the meaning given by section 4(1) of the Companies Act 1967; “representative” means a person, by whatever name called, in the direct employment of, or acting for, or by arrangement with, a financial adviser, who performs on behalf of the financial adviser any financial advisory service, whether or not the person is remunerated, and whether the person’s remuneration (if any) is by way of salary, wages, commission or otherwise, and includes any officer of the financial adviser who performs for the financial adviser any financial advisory service whether or not the officer is remunerated, and whether the officer’s remuneration (if any) is by way of salary, wages, commission or otherwise; “securities” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “securities-based derivatives contract” has the meaning given by section 2(1) of the Securities and Futures Act 2001; “share” has the meaning given by section 4(1) of the Companies Act 1967; “specified products” means securities, specified securities‑based derivatives contracts or units in a collective investment scheme; “specified securities-based derivatives contract” and “spot foreign exchange contract” have the meanings given by section 2(1) of the Securities and Futures Act 2001; “substantial shareholder” has the meaning given by section 2(6) of the Securities and Futures Act 2001; “supervisor”, in relation to a financial adviser, means any person (by whatever name described) who — (a) is in the direct employment of, is acting for, or has an arrangement with the financial adviser; and (b) is responsible, whether directly or indirectly, for the supervision or management of the conduct and performance of any representative of the financial adviser or another supervisor; “unit” means a group of individuals carrying out a common activity of a licensed financial adviser, each of whom is directly employed by, is acting for, or has an arrangement with the licensed financial adviser; “unit in a collective investment scheme” or “units in a collective investment scheme” has the meaning given by “unit” in section 2(1) of the Securities and Futures Act 2001; “voting share” has the meaning given by section 4(1) of the Companies Act 1967; “written direction” means a written direction issued under section 67. [35/2007; 1/2009; 35/2012; 11/2013; 29/2014; 18/2015; 4/2017; 2/2019] (2) The definitions in the First Schedule to the Insurance Act 1966 have effect for the construction of references to life policies in this Act. Associated person 3.—(1) Unless the context otherwise requires, any reference in this Act to a person associated with another person is to be construed as a reference to — (a) where the other person is a corporation — (i) a director or secretary of the corporation; (ii) a related corporation; or (iii) a director or secretary of such a related corporation; (b) where the matter to which the reference relates is the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a corporation, a person with whom the other person has entered into, or proposes to enter into, an agreement, arrangement, understanding or undertaking, whether formal or informal, or express or implied — (i) by reason of which either of those persons may exercise, directly or indirectly control the exercise of, or substantially influence the exercise of, any voting power attached to a share in the corporation; (ii) with a view to controlling or influencing the composition of the board of directors, or the conduct of affairs, of the corporation; or (iii) under which either of those persons may acquire from the other of them shares in the corporation or may be required to dispose of such shares in accordance with the directions of the other of them, except that, in relation to a matter relating to shares in a corporation, a person may be an associate of the corporation and the corporation may be an associate of a person; (c) a person with whom the other person is acting, or proposes to act, in concert in relation to the matter to which the reference relates; (d) where the matter to which the reference relates is a matter, other than the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a corporation — (i) subject to subsection (2), a person who is a director of a corporation of which the other person is a director; or (ii) a trustee of a trust in relation to which the other person benefits or is capable of benefiting otherwise than by reason of transactions entered into in the ordinary course of business in connection with the lending of money; (e) a person with whom the other person is, according to any subsidiary legislation made under this Act, to be regarded as associated in respect of the matter to which the reference relates; (f) a person with whom the other person is, or proposes to become, associated, whether formally or informally, in any other way in respect of the matter to which the reference relates; or (g) where the other person has entered into, or proposes to enter into, a transaction, or has done, or proposes to do, any other act or thing, with a view to becoming associated with a person as mentioned in paragraph (a), (b), (c), (d), (e) or (f), that last mentioned person. (2) Where, in proceedings under this Act, it is alleged that a person mentioned in subsection (1)(d)(i) was associated with another person at a particular time, the firstmentioned person is not to be considered to be so associated in relation to a matter to which the proceedings relate unless the person alleging the association proves that the firstmentioned person at that time knew or ought reasonably to have known the material particulars of that matter. (3) A person is not to be taken to be associated with another person by virtue of subsection (1)(b), (c), (e) or (f) by reason only of one or more of the following: (a) that one of those persons provides advice to, or acts on behalf of, the other person in the proper performance of the functions attaching to the person’s professional capacity or to the person’s business relationship with the other person; (b) that one of those persons, a customer, gives specific instructions to the other, whose ordinary business includes dealing in capital markets products, to acquire shares on the customer’s behalf in the ordinary course of that business; (c) that one of those persons has sent, or proposes to send, to the other, a take‑over offer, or has made, or proposes to make, offers under a take‑over announcement, within the meaning of the Take‑over Code issued under section 321(1) of the Securities and Futures Act 2001, in relation to shares held by the other; (d) that one of those persons has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a corporation. [4/2017] Interest in specified products 4.—(1) Subject to this section, a person has an interest in specified products if the person has authority (whether formal or informal, or express or implied) to dispose of, or to exercise control over the disposal of, those specified products. [4/2017] (2) For the purposes of subsection (1), it is immaterial that the authority of a person to dispose of, or to exercise control over the disposal of, particular specified products is or is capable of being made subject to restraint or restriction. [4/2017] (3) Where any property held in trust consists of or includes specified products and a person knows, or has reasonable grounds for believing, that the person has an interest under the trust, the person is deemed to have an interest in those specified products. [4/2017] (4) Where a corporation has, or is by the provisions of this section deemed to have, an interest in a specified product and — (a) the corporation is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of a person; or (b) a person has a controlling interest in the corporation, that person is deemed to have an interest in that specified product. [4/2017] (5) Where a corporation has, or is by the provisions of this section (apart from this subsection) deemed to have, an interest in a specified product and — (a) a person is; (b) the associates of a person are; or (c) a person and the person’s associates are, entitled to exercise or control the exercise of at least 20% of the votes attached to the voting shares in the corporation, that person is deemed to have an interest in that specified product. [4/2017] (6) For the purposes of subsection (5), a person is an associate of another person if the firstmentioned person is — (a) a subsidiary of that other person; (b) a person who is accustomed or is under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of that other person in relation to the specified product mentioned in subsection (5); or (c) a corporation that is, or a majority of the directors of which are, accustomed or under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of that other person in relation to that specified product. [35/2014; 4/2017] (7) A person is deemed to have an interest in a specified product in any one or more of the following circumstances: (a) where the person has entered into a contract to purchase a specified product; (b) where the person has a right, otherwise than by reason of having an interest under a trust, to have a specified product transferred to the person or to the person’s order, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; (c) where the person has the right to acquire a specified product, or an interest in a specified product, under an option, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or (d) where the person is entitled, otherwise than by reason of the person having been appointed a proxy or representative to vote at a meeting of members of a corporation or of a class of its members, to exercise or control the exercise of a right attached to a specified product, not being a specified product of which the person is the registered holder. [4/2017] (8) A person is deemed to have an interest in a specified product if that specified product is held jointly with another person. [4/2017] (9) For the purpose of determining whether a person has an interest in a specified product, it is immaterial that the interest cannot be related to a particular specified product. [4/2017] (10) The following interests are to be disregarded: (a) an interest in a specified product if the interest is that of a person who holds the specified product as bare trustee; (b) an interest in a specified product if the interest is that of a person whose ordinary business includes the lending of money if the person holds the interest only by way of security for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money; (c) an interest of a person in a specified product if that interest is an interest held by the person by reason of the person holding a prescribed office; (d) an interest of a company in its own securities if that interest is purchased or otherwise acquired in accordance with sections 76B to 76G of the Companies Act 1967; (e) a prescribed interest in a specified product being an interest of such person, or of a person included in such class of persons, as may be prescribed. [4/2017] (11) An interest in a specified product is not to be disregarded by reason only of — (a) its remoteness; (b) the manner in which it arose; or (c) the fact that the exercise of a right conferred by the interest is or is capable of being made subject to restraint or restriction. [4/2017] (12) In subsection (6)(a), “subsidiary” has the meaning given by section 5 of the Companies Act 1967. [35/2014; 4/2017] Amendment of Schedules 5.—(1) The Minister may by order in the Gazette, amend, add to or vary the First, Second or Third Schedule. (2) The Minister may, in any order made under subsection (1), make such incidental, consequential or supplementary provisions as may be necessary or expedient. (3) Any order made under subsection (1) must be presented to Parliament as soon as possible after publication in the Gazette.