In ensuring that the representatives hired by financial institutions (FIs) are fit and proper, and continue to remain so when carrying out any activity regulated under the Securities and Futures Act (SFA), Financial Advisers Act (FAA), and Insurance Act (IA), the Monetary Authority of Singapore (MAS) requires these FIs to:
- conduct due diligence checks on prospective representatives, such as reference checks with their former employers or principal companies; and
- lodge a report with MAS when the FI becomes aware of any misconduct committed by their representatives or broking staff, such as acts involving fraud, dishonesty, inappropriate advice, misrepresentation, or inadequate disclosure of information to customers.
To address both the varying in standards in misconduct reporting by FIs and the movement of individuals with a history of misconduct across FIs, MAS has:
- issued a two-part public consultation proposing revisions to misconduct reporting requirements and proposals to mandate reference checks; and
- proposed two new forms for misconduct reports and investigation reports.
The public consultation paper was published on 6 July 2018 and the consultation period will close on 6 August 2018.
To assist you in preparing for changes in misconduct reporting and employee record keeping, we have summarised in our client alert, MAS' proposed revisions.