What is a Financial Advisory License?
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 the Financial Advisory License?
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 fitness of the company paying attention to the directors and shareholders
- Experience and the expertise of the applicant in the financial sector
- The applicant must meet the minimum state capital requirements and the FAA insurance requirements
- MAS checks for the business plans of the company
- Internal compliance system of the company
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 do you apply for the FA license?
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.
The processing time for an FA license
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 of an FA license
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
Conclusion
A financial advisory license is a crucial requirement when conducting any finance advisory role in Singapore. However, there are some things you must meet to become a holder of this card. This article gives you all the facts about the FA license.
