What is a Financial Advisory License in Singapore? – Guide to MAS FA Licensing
Singapore is among the top financial hub Centre globally. It features a friendly environment that encourages starting of financial businesses. However, for a company to be legitimate in providing financial advisory, it must apply for the FA (Financial adviser) license. It is governed by the Financial Advisers Act unless for some exemptions. Note that people who represent FAs must apply to become a MAS financial representative.
Who Needs a Financial Advisory License in Singapore? | FAA Compliance & MAS Rules
Suppose a Singapore-based company wishes to offer financial services which falls in the Financial Advisers Act (FAA). In that case, Singapore’s laws require that it applies for the FA license unless the exemptions. When you apply for the FA license, the Monetary Authority of Singapore (MAS) requires you to match some expectations, including:
- MAS checks the fit and proper criteria of directors and shareholders
- Applicant’s expertise in the financial sector
- Fulfillment of base capital requirements and FAA insurance standards
- Review of the company’s internal compliance system
- Business plan as per MAS Financial Advisory Regulations
The company must pass some requirements, including:
- It must have at least two directors where one of them must be a resident in the country
- The CEO must have experience of at least ten years with a minimum of five years in management and lives in Singapore
- It must have at least three Singapore-based employees with five years’ experience in the relevant sectors
How to Apply for a Financial Advisory License in Singapore
A company that is applying for an FA license for the first time must submit Form 1 governed by the Financial Advisory Regulations. However, a company with an FA license but wish to add some privileges can apply for FAR form 2. If the firm appoints an individual to perform regulated activities using the FA license, make sure to nominate these people as a regulated representative or provisional.
Types of Financial Advisory Licenses in Singapore
Australia: In Australia, financial advisory practices are undertaken under the requirements of the Corporations Act which calls for the issuance of proper licenses before the provision of such services. The categories of financial advisory licenses vary based on the range and contents of the services offered. Comprehension of these licenses’ types is key to firms and professionals carrying out activities under the wealth management, investment advisory, and financial planning fields.
1. Financial Adviser’s License (Corporate License)
This is written to companies that want to provide financial advisory services including investment advisory among others, life insurance broking, and arranging contracts in life policies. This license is applicable for financial advisory firms in Singapore that cater to the retail or institutional customers.
2. Individual Financial Adviser Representative License
A person who is a representative of licensed or exempt financial adviser firms must be registered as an FA representative. These specialists have to comply with the MAS Fit and Proper Criteria, requirements for Continuing Professional Development (CPD), and FAA Code of conduct.
3. Exempt Financial Advisers
There are other entities like banks, insurance companies, and Capital Markets Services (CMS) holders that might be exempted from having a separate FA license. Nevertheless, they are still required to abide by the regulatory demands that may require them to perform the advisory activities placed by the FAA.
Each grant license has unique conditions of compliance, as they have base capital thresholds, professional indemnity insurance and internal compliance framework. Businesses have to evaluate their service offerings to decide the right structure of licences so as to comply by not incurring penalties by regulators.
Selecting the appropriate licence helps to create credibility and gain the trust of clients while at the same time guaranteeing long-term success in the financial advisory industry in Singapore.
FA License Application Processing Time in Singapore – MAS Evaluation Timeline
The MAS is the Singapore government arm responsible for regulating the laws in the business world, especially in the finance department. It takes MAS at most four months to review a company’s application and decide if it meets all the requirements. However, if the data is incomplete or complex, MAS may need to use more time before deciding on the matter. As a result, all companies applying for the FA license should ensure that their application is correct, complete, and include all the supporting documents.
Validity, Renewal & Revocation of a Financial Advisory License in Singapore
If you hope to start a financial advisory company in Singapore, you must be wondering about an FA license and its validity. Note that your FA is valid and recognized by MAS unless you:
- Stop conducting all the activities governed by the license, and MAS cancels the license
- The MAS revokes the license
- If it lapses as stated by FAA section 19
Why Choose a Licensed Financial /Appointment
It is crucial that individuals and businesses in Singapore consider the importance of choosing a licensed financial adviser to secure the assets, make wise investment choices, and adhere to the regulations. The Monetary Authority of Singapore (MAS) oversees financial advisers under the Financial Advisers Act (FAA), which guarantees that the people allowed to offer advisory services are only the competent, the qualified, and the ethical; individuals or firms.
A licensed financial adviser has been subjected to strict MAS Fit and Proper Criteria (Honesty, Integrity, Financial Soundness and Professional Competence). This guarantees that the clients are getting advice from professionals who have undergone rigorous training and are held legally responsible for their advices. On the other hand, dealing with the unlicensed advisers exposes you to misleading information, financial mismanagement and lack of legal action.
Licensed advisers also need to participate in a Continuing Professional Development (CPD) and keep abreast on products, regulatory reforms, and industry norms. Such a constant education makes sure that you get the advice that is current, trustworthy, and in line with the changing face of Singaporean financial situation.
Further, in case of disagreements and or misconduct MAS has clearly defined regulatory standards when it comes to the interests of the clients. In turn, Licensed firms need also to hold Professional Indemnity Insurance, which provides additional security to clients.
Finally, the engagement of a licensed financial adviser in Singapore is not only legal protection – it is a wise decision about professional, transparent, and reliable financial consulting, investment recommendation, or insurance services seeking.
Conclusion
A financial advisory license in Singapore is a crucial requirement when conducting any licensed financial activities. Whether you’re setting up a financial advisory firm, seeking to be an individual FA representative, or exploring the differences between the Capital Markets Services (CMS) License vs FA License, this guide has covered the essentials.
