On 3 June 2015, the Monetary Authority of Singapore (the “MAS”) released a Consultation Paper on “Policy Consultation on Regulatory Framework for Intermediaries Dealing in OTC Derivative Contracts, Execution-Related Advice, and Marketing of Collective Investment Scheme”. The Consultation Paper contains changes to the Securities and Futures Act (the “SFA”) and the Financial Advisers Act (the “FAA”) that concern three key topics:
- New regulatory framework for intermediaries dealing in over-the-counter derivative contracts (“OTC Intermediaries”). OTC Intermediaries will be regulated under the SFA as capital markets services licence holders for dealing in capital markets products. Transitional arrangements for existing OTC Intermediaries are proposed.
- Exempting dealers from complying with business conduct requirements relating to the provision of execution-related advice in respect of listed Excluded Investment Products, which include stocks and shares, collective investment schemes (“CIS”), real estate investment trusts and simpler exchange-traded funds. Providing execution-related advice is a type of financial advisory service regulated under the FAA.
- Removing the regulated activity of “marketing of CIS” from the FAA so that it will be regulated only under the SFA as part of the activity of “dealing in CIS”. In addition, changes will be introduced to streamline the licensing and business conduct requirements governing “marketing of CIS”.
The consultation closed on 3 July 2015.
The following materials relating to the Consultation Paper are available from the MAS website www.mas.gov.sg: