MAS TAKES REGULATORY ACTION AGAINST 15 FINANCIAL INSTITUTIONS FOR CONTRAVENTION OF SECTION 23B(3) OF THE FINANCIAL ADVISERS ACT (FAA) AND/OR SECTION 99B(3) OF THE SECURITIES AND FUTURES ACT (SFA)
SINGAPORE, 30 November 2011
1 On 26 November 2010, MAS launched the Representative Notification System (RNS) as a key infrastructure supporting MAS’ public register of representatives. The RNS allows the public to verify that the representatives they deal with are regulated individuals.
2 During the launch of the RNS, several financial institutions failed to ensure that the relevant regulated activities were reflected against their representatives’ names in the public register before their representatives engaged in regulated activities. As a result, their representatives conducted regulated activities before they were duly appointed. This constituted breaches of section 23B(3) of the FAA and/or section 99B(3) of the SFA. Section 23B(3) of the FAA provides that a principal shall not permit any individual to provide any type of financial advisory service on its behalf unless the individual is an appointed or provisional representative in respect of that type of financial advisory service; and section 99B(3) of the SFA provides that a principal shall not permit any individual to carry on business in any type of regulated activity on its behalf unless the individual is an appointed representative, provisional representative or temporary representative in respect of that type of regulated activity.1
3 MAS investigated these breaches and took regulatory action against 15 financial institutions for contravening section 23B(3) of the FAA and/or section 99B(3) of the SFA by allowing their representatives to provide one or more regulated activities before these individuals were appointed as representatives in respect of that type of regulated activity. The regulatory actions taken were dependent on the specific facts and circumstances surrounding each breach.
4 The following 10 financial institutions paid composition amounts of between $5,000 and $216,000 for contraventions of the FAA and/or SFA:
Contravention of the FAA
1. 12 August 2011: Prudential Assurance Company Singapore (Pte) Ltd ($200,000);
2. 12 September 2011: Marsh (Singapore) Pte. Ltd. ($5,000);
3. 14 September 2011: Aon Singapore Pte Ltd ($5,000);
4. 15 September 2011: Aon Consulting (Singapore) Pte Ltd ($5,000);
5. 21 September 2011: The Hongkong and Shanghai Banking Corporation Limited (S$24,000);
6. 21 September 2011: Manulife (Singapore) Pte. Ltd. ($5,000);
7. 29 September 2011: CIMB Bank Berhad ($6,000); and
8. 7 October 2011: Citibank N.A. ($5,000).
Contraventions of FAA and SFA
1. 29 September 2011: Oversea-Chinese Banking Corporation Limited ($67,000 for breach of the FAA and $15,000 for breach of the SFA); and
2. 10 October 2011: Citibank Singapore Limited ($56,000 for breach of FAA and $160,000 for breach of SFA).
5 MAS also reprimanded the following 5 financial institutions for similar contraventions of the FAA and/or SFA:
Contravention of the FAA
1. 26 September 2011: Lockton Companies (Singapore) Pte Ltd;
2. 11 November 2011: HSBC Insurance (Singapore) Pte. Limited; and
3. 11 November 2011: Barclays Bank PLC.
Contravention of the SFA
1. 11 November 2011: HSBC Private Bank (Suisse) SA.
Contraventions of the FAA and SFA
1. 6 October 2011: DBS Bank Ltd.
6 All 15 financial institutions have confirmed to MAS that they have completed remedial actions such that all the affected customers have been informed, and where relevant, revalidated the advice previously given and/or reaffirmed the contracts. As a result, customers have not suffered losses. The financial institutions have also put in place policies and procedures to prevent future recurrence.
7 The RNS is a key infrastructure to protect the interests of financial institutions’ customers. MAS expects all financial institutions to ensure that information submitted through the RNS, including the relevant regulated activity, is accurate so as to ensure the integrity of the data reflected on MAS’ public register of representatives.
8 Consumers should request for the unique representative numbers from the representatives of the financial institutions they deal with. This will allow validation of the representative’s regulatory status and the types of regulated activities they are authorised to conduct from the public register of representatives.
Notes:
1 Collectively, referred to as “regulated activities” or “regulated activity” singularly.
SINGAPORE, 30 November 2011
1 On 26 November 2010, MAS launched the Representative Notification System (RNS) as a key infrastructure supporting MAS’ public register of representatives. The RNS allows the public to verify that the representatives they deal with are regulated individuals.
2 During the launch of the RNS, several financial institutions failed to ensure that the relevant regulated activities were reflected against their representatives’ names in the public register before their representatives engaged in regulated activities. As a result, their representatives conducted regulated activities before they were duly appointed. This constituted breaches of section 23B(3) of the FAA and/or section 99B(3) of the SFA. Section 23B(3) of the FAA provides that a principal shall not permit any individual to provide any type of financial advisory service on its behalf unless the individual is an appointed or provisional representative in respect of that type of financial advisory service; and section 99B(3) of the SFA provides that a principal shall not permit any individual to carry on business in any type of regulated activity on its behalf unless the individual is an appointed representative, provisional representative or temporary representative in respect of that type of regulated activity.1
3 MAS investigated these breaches and took regulatory action against 15 financial institutions for contravening section 23B(3) of the FAA and/or section 99B(3) of the SFA by allowing their representatives to provide one or more regulated activities before these individuals were appointed as representatives in respect of that type of regulated activity. The regulatory actions taken were dependent on the specific facts and circumstances surrounding each breach.
4 The following 10 financial institutions paid composition amounts of between $5,000 and $216,000 for contraventions of the FAA and/or SFA:
Contravention of the FAA
1. 12 August 2011: Prudential Assurance Company Singapore (Pte) Ltd ($200,000);
2. 12 September 2011: Marsh (Singapore) Pte. Ltd. ($5,000);
3. 14 September 2011: Aon Singapore Pte Ltd ($5,000);
4. 15 September 2011: Aon Consulting (Singapore) Pte Ltd ($5,000);
5. 21 September 2011: The Hongkong and Shanghai Banking Corporation Limited (S$24,000);
6. 21 September 2011: Manulife (Singapore) Pte. Ltd. ($5,000);
7. 29 September 2011: CIMB Bank Berhad ($6,000); and
8. 7 October 2011: Citibank N.A. ($5,000).
Contraventions of FAA and SFA
1. 29 September 2011: Oversea-Chinese Banking Corporation Limited ($67,000 for breach of the FAA and $15,000 for breach of the SFA); and
2. 10 October 2011: Citibank Singapore Limited ($56,000 for breach of FAA and $160,000 for breach of SFA).
5 MAS also reprimanded the following 5 financial institutions for similar contraventions of the FAA and/or SFA:
Contravention of the FAA
1. 26 September 2011: Lockton Companies (Singapore) Pte Ltd;
2. 11 November 2011: HSBC Insurance (Singapore) Pte. Limited; and
3. 11 November 2011: Barclays Bank PLC.
Contravention of the SFA
1. 11 November 2011: HSBC Private Bank (Suisse) SA.
Contraventions of the FAA and SFA
1. 6 October 2011: DBS Bank Ltd.
6 All 15 financial institutions have confirmed to MAS that they have completed remedial actions such that all the affected customers have been informed, and where relevant, revalidated the advice previously given and/or reaffirmed the contracts. As a result, customers have not suffered losses. The financial institutions have also put in place policies and procedures to prevent future recurrence.
7 The RNS is a key infrastructure to protect the interests of financial institutions’ customers. MAS expects all financial institutions to ensure that information submitted through the RNS, including the relevant regulated activity, is accurate so as to ensure the integrity of the data reflected on MAS’ public register of representatives.
8 Consumers should request for the unique representative numbers from the representatives of the financial institutions they deal with. This will allow validation of the representative’s regulatory status and the types of regulated activities they are authorised to conduct from the public register of representatives.
Notes:
1 Collectively, referred to as “regulated activities” or “regulated activity” singularly.
