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 required to maintain a minimum base capital of S$250,000. For all other types of financial advisory activities, you are required 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.

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

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

b) S$150,000.

(iii) Professional indemnity insurance (PII)

You are required to have in force a PII policy with varying limits depending on the type of financial advisory services provided. 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;

b) For all others:

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 regulated 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 regulated activity under your licence, you have to appoint these individuals as an appointed or provisional representative for that regulated activity. You can refer to the page Appointing a Representative for Licensed 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 emailed to your company.

What is the processing time required?

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 assessed to be incomplete or inaccurate, MAS will need a longer time to review the application.

Please ensure that your company’s application is complete, correct and accompanied 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 fixed 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 calculated 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 regulated activities on the licence, and the licence is cancelled by MAS.
• The licence is revoked by MAS.
• The licence lapses in accordance with section 19 of the FAA .

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

Individuals appointed as broking staff by exempt insurance brokers are not required to be registered or authorised 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.