MAS seeks comments on revised Notices on reporting of misconduct of representatives and broking staff
28 April 2022
On 19 April 2022, the Monetary Authority of Singapore (“MAS”) issued a consultation paper on “Revised Notices on Misconduct Reporting Requirements under the Financial Advisers Act, Insurance Act and Securities and Futures Act”. The consultation closes on 20 May 2022.
Under the Financial Advisers Act 2001 (“FAA”), Insurance Act 1966 (“IA”) and Securities and Futures Act 2001 (“SFA”), financial institutions (“FIs”) are required to lodge a report with MAS when they become aware of misconduct committed by their representatives or broking staff (collectively, “representatives”), such as acts involving fraud, dishonesty, inappropriate advice, misrepresentation, or inadequate disclosure of information to customers. These requirements are set out under FAA-N14 Notice on Reporting of Misconduct of Representatives by Financial Advisers (“FAA Notice”), MAS 504 Notice on Reporting of Misconduct of Broking Staff by Insurance Brokers (“IA Notice”) and SFA 04-N11 Notice on Reporting of Misconduct of Representatives by Holders of Capital Markets Services Licence and Exempt Financial Institutions (“SFA Notice”).
By way of background, MAS had issued a consultation paper in July 2018 and sought feedback on proposed changes to the misconduct reporting requirements. MAS published its response to the feedback received on 14 May 2021.
In the present consultation paper, MAS is consulting on revisions to the FAA Notice, IA Notice and SFA Notice (collectively, “Revised Notices”) to implement changes to the misconduct reporting requirements. MAS will be making the following key changes to the misconduct reporting requirements:
- Application of the revised IA Notice to accident and health insurance intermediaries;
- Application of the revised SFA Notice to Registered Fund Management Companies (RFMCs);
- Revisions to the categories of reportable misconduct;
- Revision to the reporting timeline of the misconduct report (and subsequent updates to the misconduct report) which the FI is required to submit to MAS;
- Requirement for FIs to submit to MAS an investigation report (where the FI has commenced an internal investigation into the alleged misconduct) at the same time the FI submits a misconduct report to MAS;
- Requirement for FIs to submit to MAS a copy of any report lodged with the police (where available), with accompanying information as set out in the Revised Notices at the same time the FI submits a misconduct report to MAS; and
- Requirement for FIs to provide their representatives with a copy of the misconduct report (including subsequent updates to the misconduct report) filed with MAS within the timeline set out in the Revised Notices.
FIs will be required to submit misconduct and investigation reports using prescribed formats.
MAS will inform the industry of the effective date of the Revised Notices in due course and provide an adequate transition period for FIs to comply with the Revised Notices.
The following materials are available on the MAS website www.mas.gov.sg via the relevant webpage: