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Contents  

Long Title

Enacting Formula

Part I PRELIMINARY

Part II LICENsing of financial advisers and their representativeS

Part III CONDUCT OF BUSINESS

Division 1 — General

Division 2 — Life Insurance

Division 3 — Securities

Division 4 — Register of Interests in Securities

Part IV ACCOUNTS AND AUDIT

Division 1 — Accounts

Division 2 — Audit

Part V POWERS OF AUTHORITY

Part VI supervision and investigation

Division 1 — General

Division 2 — Inspection Powers of Authority

Division 3 — Investigative Powers of Authority

Part VII ASSISTANCE TO FOREIGN REGULATORY AUTHORITIES

Part VIII OFFENCES

Part IX APPEALS

Part X MISCELLANEOUS

FIRST SCHEDULE Excluded Financial Advisers

SECOND SCHEDULE types of financial advisory service

 
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REPUBLIC OF SINGAPORE
GOVERNMENT GAZETTE
ACTS SUPPLEMENT
Published by Authority

NO. 46] Friday, December 7 [2001

The following Act was passed by Parliament on 5th October 2001 and assented to by the President on 17th October 2001:—
Financial Advisers Act 2001

(No. 43 of 2001)


I assent.

S R NATHAN,
President.
17th October 2001.
Date of Commencement: 6th August 2002 Section 106
Date of Commencement: 1st October 2002 Sections 1 to 105
An Act to regulate financial advisers and their representatives, and to repeal the Insurance Intermediaries Act (Chapter 142A of the 2000 Revised Edition).
Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:
PART I
PRELIMINARY
Short title and commencement
1.  This Act may be cited as the Financial Advisers Act 2001 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.
Interpretation
2.
—(1)  In this Act, unless the context otherwise requires —
“advocate and solicitor” means an advocate and solicitor of the Supreme Court or a foreign lawyer as defined in section 130A of the Legal Profession Act (Cap. 161);
“appointed day” means the date of commencement of this Act;
“Authority” means the Monetary Authority of Singapore established under the Monetary Authority of Singapore Act (Cap. 186);
“book” includes any record, register, document or other record of information and any account or accounting record, however compiled, recorded or stored, whether in written or printed form or on microfilm or by electronic process or otherwise;
“collective investment scheme” has the same meaning as in section 2(1) of the Securities and Futures Act 2001;
“company” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“connected person”, in relation to —
(a)
an individual, means —
(i)
the individual’s spouse, son, adopted son, step-son, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister; and
(ii)
a firm or a corporation in which the individual or any of the persons mentioned in sub-paragraph (i) has control of not less than 20% of the voting power in the firm or corporation, whether such control is exercised individually or jointly; and
(b)
a firm or a corporation, means another firm or corporation in which the first-mentioned firm or corporation has control of not less than 20% of the voting power in that other firm or corporation,
and a reference in this Act to a person connected to another person shall be construed accordingly;
“corporation” has the same meaning as in section 4(1) of the Companies Act (Cap 50);
“dealing in securities” has the same meaning as in section 2(1) of the Securities and Futures Act 2001;
“director” has the same meaning as in section 4(1) of the Companies Act;
“exempt financial adviser” means a financial adviser which is exempt under section 23(1) or (2) from holding a financial adviser’s licence;
“financial year” has the same meaning as in section 4(1) of the Companies Act;
“financial adviser” means a person who carries on a business of providing any financial advisory service, but does not include any person specified in the First Schedule;
“financial advisory service” means all or any of the services specified in the Second Schedule;
“financial adviser’s licence” means a licence granted or renewed under section 13 in respect of a financial adviser, and “licensed financial adviser” shall be construed accordingly;
“firm” has the same meaning as in section 2(1) of the Business Registration Act (Cap. 32);
“futures contract” has the same meaning as in section 2(1) of the Securities and Futures Act 2001;
“futures exchange” means a corporation that is approved by the Authority under section 9 of the Securities and Futures Act 2001 as a futures exchange;
“investment product” means —
(a)
any capital markets product as defined in section 2(1) of the Securities and Futures Act 2001;
(b)
any life policy; or
(c)
any other product as may be prescribed;
“leveraged foreign exchange trading” has the same meaning as in section 2(1) of the Securities and Futures Act 2001;
“licence” means a financial adviser’s licence or representative’s licence, and “licensee” shall be construed accordingly;
“life policy” has the same meaning as in the First Schedule to the Insurance Act (Cap. 142);
“newspaper” has the same meaning as in section 2 of the Newspaper and Printing Presses Act (Cap. 206);
“officer” has the same meaning as in section 4(1) of the Companies Act (Cap 50);
“prescribed written law” means this Act, or any of the following written laws and any subsidiary legislation made thereunder:
(a)
Banking Act (Cap. 19);
(c)
Insurance Act;
(d)
Monetary Authority of Singapore Act (Cap. 186);
(f)
Securities and Futures Act 2001; or
(g)
such other written law as the Authority may prescribe;
“recognised trading system provider” means a person who is recognised by the Authority under section 36 of the Securities and Futures Act 2001 as a recognised trading system provider;
“registered insurer” means an insurer who is for the time being registered under section 8 of the Insurance Act;
“related corporation” has the same meaning as in section 4(1) of the Companies Act;
“representative” means an individual, in the direct employment of or acting for or by arrangement with a financial adviser, who performs for the financial adviser any of the functions of a financial adviser (other than work ordinarily performed by accountants, clerks or cashiers), whether his remuneration (if any) is by way of salary, wages, commission or otherwise, and includes an officer of the financial adviser who performs for the financial adviser any of those functions, whether or not his remuneration is as aforesaid;
“representative’s licence” means a licence granted or renewed under section 13 in respect of a representative, and “licensed representative” shall be construed accordingly;
“securities” has the same meaning as in section 2(1) of the Securities and Futures Act 2001;
“securities exchange” means a corporation that is approved by the Authority under section 9 of the Securities and Futures Act 2001 as a securities exchange;
“share” has the same meaning as in section 4(1) of the Companies Act (Cap 50);
“substantial shareholder” has the same meaning as in Division 4 of Part IV of the Companies Act;
“trading in futures contracts” has the same meaning as in section 2(1) of the Securities and Futures Act 2001;
“voting share” has the same meaning as in section 4(1) of the Companies Act;
“written direction” means a written direction issued under section 58.
(2)  The definitions in the First Schedule to the Insurance Act (Cap.142) shall have effect for the construction of references to life policies in this Act.
Associated person
3.
—(1)  Unless the context otherwise requires, any reference in this Act to a person associated with another person shall be construed as a reference to —
(a)
where the other person is a corporation —
(i)
a director or secretary of the corporation;
(ii)
a related corporation; or
(iii)
a director or secretary of such a related corporation;
(b)
where the matter to which the reference relates is the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a corporation, a person with whom the other person has, or proposes to enter into, an agreement, arrangement, understanding or undertaking, whether formal or informal, or express or implied —
(i)
by reason of which either of those persons may exercise, directly or indirectly control the exercise of, or substantially influence the exercise of, any voting power attached to a share in the corporation;
(ii)
with a view to controlling or influencing the composition of the board of directors, or the conduct of affairs, of the corporation; or
(iii)
under which either of those persons may acquire from the other of them shares in the corporation or may be required to dispose of such shares in accordance with the directions of the other of them,
except that, in relation to a matter relating to shares in a corporation, a person may be an associate of the corporation and the corporation may be an associate of a person;
(c)
a person with whom the other person is acting, or proposes to act, in concert in relation to the matter to which the reference relates;
(d)
where the matter to which the reference relates is a matter, other than the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a corporation —
(i)
subject to subsection (2), a person who is a director of a corporation of which the other person is a director; or
(ii)
a trustee of a trust in relation to which the other person benefits or is capable of benefiting otherwise than by reason of transactions entered into in the ordinary course of business in connection with the lending of money;
(e)
a person with whom the other person is, according to any subsidiary legislation made under this Act, to be regarded as associated in respect of the matter to which the reference relates;
(f)
a person with whom the other person is, or proposes to become, associated, whether formally or informally, in any other way in respect of the matter to which the reference relates; or
(g)
where the other person has entered into, or proposes to enter into, a transaction, or has done, or proposes to do, any other act or thing, with a view to becoming associated with a person as referred to in paragraph (a), (b), (c), (d), (e) or (f), that last-mentioned person.
(2)  Where, in proceedings under this Act, it is alleged that a person referred to in subsection (1)(d)(i) was associated with another person at a particular time, the first-mentioned person shall not be considered to be so associated in relation to a matter to which the proceedings relate unless the person alleging the association proves that the first-mentioned person at that time knew or ought reasonably to have known the material particulars of that matter.
(3)  A person shall not be taken to be associated with another person by virtue of subsection (1)(b), (c), (e) or (f) by reason only of one or more of the following:
(a)
that one of those persons furnishes advice to, or acts on behalf of, the other person in the proper performance of the functions attaching to his professional capacity or to his business relationship with the other person;
(b)
that one of those persons, a customer, gives specific instructions to the other, whose ordinary business includes dealing in securities, trading in futures contracts or leveraged foreign exchange trading, to acquire shares on the customer’s behalf in the ordinary course of that business;
(c)
that one of those persons has sent, or proposes to send, to the other a take-over offer, or has made, or proposes to make, offers under a take-over announcement, within the meaning of the Take-over Code issued under section 321(1) of the Securities and Futures Act 2001, in relation to shares held by the other;
(d)
that one of those persons has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a corporation.
Interest in securities
4.
—(1)  Subject to this section, a person has an interest in securities if he has authority (whether formal or informal, or express or implied) to dispose of, or to exercise control over the disposal of, those securities.
(2)  It is immaterial for the purposes of subsection (1) that the authority of a person to dispose of, or to exercise control over the disposal of, particular securities is or is capable of being made subject to restraint or restriction.
(3)  Where any property held in trust consists of or includes securities, and a person knows, or has reasonable grounds for believing, that he has an interest under the trust, he shall be deemed to have an interest in those securities.
(4)  Where a corporation has, or is by the provisions of this section deemed to have, an interest in a security and —
(a)
the corporation is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of a person; or
(b)
a person has a controlling interest in the corporation,
that person shall be deemed to have an interest in that security.
(5)  Where a corporation has, or is by the provisions of this section (apart from this subsection) deemed to have, an interest in a security and —
(a)
a person is;
(b)
the associates of a person are; or
(c)
a person and his associates are,
entitled to exercise or control the exercise of not less than 20% of the votes attached to the voting shares in the corporation, that person shall be deemed to have an interest in that security.
(6)  For the purposes of subsection (5), a person is an associate of another person if the first-mentioned person is —
(a)
a related corporation of the second-mentioned person;
(b)
a person in accordance with whose directions, instructions or wishes the second-mentioned person is accustomed or is under an obligation, whether formal or informal, to act in relation to the security referred to in subsection (4);
(c)
a person who is accustomed or is under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the second-mentioned person in relation to that security;
(d)
a corporation which is, or the directors of which are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the second-mentioned person in relation to that security; or
(e)
a corporation in accordance with the directions, instructions or wishes of which, or of the directors of which, the second-mentioned person is accustomed or under an obligation, whether formal or informal, to act in relation to that security.
(7)  A person shall be deemed to have an interest in a security in any one or more of the following circumstances:
(a)
where he has entered into a contract to purchase a security;
(b)
where he has a right, otherwise than by reason of having an interest under a trust, to have a security transferred to himself or to his order, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not;
(c)
where he has the right to acquire a security, or an interest in a security, under an option, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or
(d)
where he is entitled, otherwise than by reason of his having been appointed a proxy or representative to vote at a meeting of members of a corporation or of a class of its members, to exercise or control the exercise of a right attached to a security, not being a security of which he is the registered holder.
(8)  A person shall be deemed to have an interest in a security if that security is held jointly with another person.
(9)  For the purpose of determining whether a person has an interest in a security, it is immaterial that the interest cannot be related to a particular security.
(10)  There shall be disregarded —
(a)
an interest in a security if the interest is that of a person who holds the security as bare trustee;
(b)
an interest in a security if the interest is that of a person whose ordinary business includes the lending of money if he holds the interest only by way of security for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money;
(c)
an interest of a person in a security if that interest is an interest held by him by reason of his holding a prescribed office;
(d)
an interest of a company in its own securities if that interest is purchased or otherwise acquired in accordance with sections 76B to 76G of the Companies Act (Cap. 50); and
(e)
a prescribed interest in a security being an interest of such person, or of a person included in such class of persons, as may be prescribed.
(11)  An interest in a security shall not be disregarded by reason only of —
(a)
its remoteness;
(b)
the manner in which it arose; or
(c)
the fact that the exercise of a right conferred by the interest is or is capable of being made subject to restraint or restriction.
Amendment of First and Second Schedules
5.
—(1)  The Minister may from time to time, by order published in the Gazette, amend the First or Second Schedule.
(2)  The Minister may, in any order made under subsection (1), make such incidental, consequential or supplementary provisions as may be necessary or expedient.
(3)  Any order made under subsection (1) shall be presented to Parliament as soon as possible after publication in the Gazette.