The MAS is proposing regulatory requirements for continuing professional development (‘CPD’) for representatives of financial adviser ('FA') and exempt financial advisers. At the same time, the MAS proposes to raise the criteria and standards for licensed financial advisers ('LFAs'), in particular with a view to financial requirements and in staff capabilities. Registered insurance brokers must also meet similar criteria to carry on the full range of FA activities.
At the same time, the MAS is proposing to restrict non-financial advisory activities which LFAs and their representatives can conduct. FAs will be required to institute adequate policies to assess representatives and the appointment of introducers and must track non-financial advisory activities. Moreover, the commission pay-out structure of regular premium life insurance products will be extended to six years or the premium payment period, whichever is shorter. Short-term product-related incentives that reward FAs and their represent firms for recommending specific investment products will also be banned. A Balanced Scorecard (‘BSC’) framework will be introduced to strengthen non-revenue aspects in the assessment and remuneration of representatives.
An online web aggregator will be launched to enhance the transparency of information of life insurance products. Retail market life insurers will be required to offer products directly to consumers without charging commissions.
The MAS also proposes to allow foreign regulatory authorities ('FRAs') or their appointed agents to inspect FAs in Singapore. The inspections are intended for FRAs from the parent jurisdictions that have regulatory oversight of the FA in Singapore to carry out their supervisory functions.
Comments can be submitted to the MAS until 3 November 2014. For more information, please read our regulatory update on the Legislative Consultation Paper for FAIR and Inspections by Foreign Regulatory Authorities.