FTT Securities & Futures Regulations 2 — Questions and Answers
Question 1: Under MAS licensing, which licence is required to provide financial advisory services including recommending investment products?
- Financial Adviser's Licence (Correct answer)
- Capital Markets Services Licence
- Trust Business Licence
- Payment Service Licence
Correct answer: Financial Adviser's Licence
A Financial Adviser's Licence under the Financial Advisers Act (FAA) is required to provide financial advisory services, including advising on and recommending investment products to retail clients.
Question 2: What does 'exempt financial adviser' status mean under the FAA?
- The entity is exempt from holding a Financial Adviser's Licence but must still comply with conduct rules (Correct answer)
- The entity is fully exempt from all FAA requirements
- The entity only serves institutional clients and has no obligations
- The entity is licensed but not regulated
Correct answer: The entity is exempt from holding a Financial Adviser's Licence but must still comply with conduct rules
An exempt financial adviser is not required to hold a Financial Adviser's Licence but must still comply with specific conduct requirements under the FAA. Banks, insurers, and certain other entities may qualify for exempt status.
Question 3: Which entity is automatically an exempt financial adviser under the FAA?
- A bank licensed under the Banking Act (Correct answer)
- A sole proprietor advising on unit trusts
- A foreign company without local presence
- A newly incorporated Pte Ltd company
Correct answer: A bank licensed under the Banking Act
Banks licensed under the Banking Act are automatically exempt financial advisers under the FAA, allowing them to provide financial advisory services without a separate Financial Adviser's Licence.
Question 4: MAS's representative notification framework requires financial advisers to notify MAS when:
- A representative is appointed, ceases, or has a change in particulars (Correct answer)
- Only when a representative is first appointed
- Only when a representative commits misconduct
- Only at the end of each calendar year
Correct answer: A representative is appointed, ceases, or has a change in particulars
Under the representative notification framework, financial advisers must notify MAS when a representative is appointed, when they cease to act as a representative, and when there are changes to their particulars.
Question 5: The 'fit and proper' criteria for MAS licensing includes:
- Honesty, integrity, reputation, competence, and financial soundness (Correct answer)
- Only educational qualifications and age
- Only criminal record checks
- Only financial solvency
Correct answer: Honesty, integrity, reputation, competence, and financial soundness
MAS's 'fit and proper' criteria encompasses honesty, integrity and reputation, competence and capability, and financial soundness. All these dimensions are assessed when granting and maintaining licences.
Question 6: How often must CMS licence holders submit financial returns to MAS?
- Quarterly and annually (Correct answer)
- Only annually
- Monthly only
- Only when there is a material change
Correct answer: Quarterly and annually
CMS licence holders are required to submit financial returns to MAS on a quarterly basis as well as annual audited accounts, ensuring ongoing regulatory oversight of their financial health.
FTT Securities & Futures Regulations 2
Under MAS licensing, which licence is required to provide financial advisory services including recommending investment products?