PART V

POWERS OF AUTHORITY

Approval of chief executive officer and director of licensed financial adviser
56. —(1) No licensed financial adviser shall appoint a person as —

(a) its chief executive officer;

(b) its director where, upon appointment, the person resides or is to reside in Singapore, whether or not he is directly responsible for its business in Singapore or any part thereof; or

(c) its director where, upon appointment, the person is directly responsible for its business in Singapore or any part thereof, whether he resides or is to reside in Singapore or elsewhere,

unless it has obtained the approval of the Authority.

[15/2003]

(1A) Where a licensed financial adviser has obtained the approval of the Authority to appoint a person as its chief executive officer or director under subsection (1), the person may be re-appointed as chief executive officer or director, as the case may be, of the licensed financial adviser immediately upon the expiry of the earlier term without the approval of the Authority.

[15/2003]

(2) Without prejudice to any other matter that the Authority may consider relevant, the Authority shall, in determining whether to grant its approval under subsection (1), have regard to such criteria as may be prescribed or as may be specified in written directions.

(3) Subject to subsection (4), the Authority shall not refuse an application for approval under subsection (1) without giving the licensed financial adviser an opportunity to be heard.

(4) The Authority may refuse an application for approval under subsection (1) on any of the following grounds without giving the licensed financial adviser an opportunity to be heard:

(a) the person is an undischarged bankrupt, whether in Singapore or elsewhere;

(b) a prohibition order under section 59 has been made by the Authority, and remains in force, against the person;

(c) the person has been convicted, whether in Singapore or elsewhere, of an offence —

(i) involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and

(ii) punishable with imprisonment for a term of 3 months or more.

[15/2003]

(5) Where the Authority refuses an application for approval under subsection (1), the Authority need not give the person who was proposed to be appointed an opportunity to be heard.

(6) Any licensed financial adviser which is aggrieved by the decision of the Authority under subsection (1) may, within 30 days of the decision of the Authority, appeal in writing to the Minister.

(7) Any licensed financial adviser which, without reasonable excuse, contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.

(8) In this section, “chief executive officer” means any person, by whatever name described, who is —

(a) in the direct employment of, or acting for or by arrangement with, a licensed financial adviser; and

(b) principally responsible for the management and conduct of any type of business of the financial adviser in Singapore.

[SF Bill,Clause 96]

Removal of officer of licensed financial adviser
57. —(1) Where the Authority is satisfied that an officer of a licensed financial adviser —

(a) has wilfully contravened or wilfully caused that licensed financial adviser to contravene any provision of this Act;

(b) has, without reasonable excuse, failed to secure compliance with this Act;

(c) has failed to discharge the duties of his office;

(d) is an undischarged bankrupt, whether in Singapore or elsewhere;

(e) has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation;

(f) has had execution against him in respect of a judgment debt returned unsatisfied in whole or in part;

(fa) has had a prohibition order under section 59 made by the Authority against him that remains in force; or

(g) has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly,

then the Authority may, if it thinks it necessary in the public interest or for the protection of investors or policy owners, direct, by notice in writing, the licensed financial adviser to remove from its office or employment the officer, and the licensed financial adviser shall comply with such notice.

[15/2003;2/2005]

(2) Without prejudice to any other matter that the Authority may consider relevant, that Authority shall, in determining whether an officer of a licensed financial adviser has failed to discharge the duties of his office under subsection (1) (c), have regard to such criteria as may be prescribed or as may be specified in written directions.

(3) Subject to subsection (4), the Authority shall not direct a licensed financial adviser to remove from its office or employment an officer under subsection (1) without giving the licensed financial adviser an opportunity to be heard.

(4) The Authority may direct a licensed financial adviser to remove an officer from its office or employment under subsection (1) on any of the following grounds without giving the licensed financial adviser an opportunity to be heard:

(a) the officer is an undischarged bankrupt, whether in Singapore or elsewhere;

(b) a prohibition order under section 59 has been made by the Authority, and remains in force, against the officer;

(c) the officer has been convicted, whether in Singapore or elsewhere, of an offence —

(i) involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; and

(ii) punishable with imprisonment for a term of 3 months or more.

[15/2003]

(5) Where the Authority directs a licensed financial adviser to remove from its office or employment an officer under subsection (1), the Authority need not give that officer an opportunity to be heard.

(6) Any licensed financial adviser which is aggrieved by the direction of the Authority to remove from its office or employment an officer under subsection (1) may, within 30 days of the decision of the Authority, appeal in writing to the Minister.

(7) Any licensed financial adviser which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.

(8) No criminal or civil liability shall be incurred by a licensed financial adviser, or any person acting on behalf of the licensed financial adviser, in respect of anything done or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of its obligations under this section.

(9) Nothing in section 152 of the Companies Act (Cap. 50) shall prevent the Authority from exercising any power under subsection (1).

[SF Bill, Clause 97]

Power of Authority to issue written directions
58. —(1) The Authority may, if it thinks necessary or expedient in the public interest, issue written directions, either of a general or specific nature, to —

(a) any licensee;

(b) any person exempt under section 23 or 100;

(c) any representative of a person exempt under section 23; or

(d) any class of the persons referred to in paragraph (a), (b) or (c),

to comply with such requirements as the Authority may specify in the written directions, or for any other purpose.

[15/2003;2/2005]

(2) Without prejudice to the generality of subsection (1), written directions may be issued —

(a) with respect to —

(i) the standards to be maintained by —

(A) a licensee;

(B) any person exempt under section 23 or 100; or

(C) any representative of a person exempt under section 23,

in the conduct of his business, including the provision of any financial advisory service to any person outside Singapore and the duties to be undertaken when making recommendations to clients in respect of investment products;

(ii) the type and frequency of financial returns and other information to be submitted to the Authority;

(iii) the qualifications, experience and training of representatives; or

(iv) the procedure for the conduct of disciplinary control of licensees, exempt financial advisers and their representatives;

(b) where any person is contravening, is likely to contravene or has contravened, any provision of this Act, to require the person —

(i) to comply with that provision or to cease contravention of that provision;

(ii) to take such action necessary to enable him to conduct his business in accordance with sound principles;

(iii) where the person is a corporation, to remove any of its directors;

(iv) to remove any person whom the Authority considers unfit to be associated with him;

(v) to take action as to the disposition or recovery of assets;

(vi) to take any available step for the recovery of sums which appear to the Authority to have been improperly paid; or

(vii) to make good any default committed by him; or

(c) for any other purpose specified in this Act.

[15/2003;2/2005]

(3) For the avoidance of doubt, any written direction issued under subsection (1) shall be deemed not to be subsidiary legislation.

(4) The Authority may at any time vary, rescind or revoke any written direction issued under subsection (1).

(5) Any person who fails to comply with any requirement specified in a written direction issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 and, in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part thereof during which the offence continues after conviction.

[2/2005]

(6) In this section, “written direction” includes a circular or notice.

[SF Bill, Clause 101]

Power of Authority to make prohibition orders
59. —(1) The Authority may make a prohibition order against a person, by notice in writing, if —

(a) the Authority suspends or revokes the licence held by the person;

(b) where the person is an exempt financial adviser or a representative of an exempt financial adviser, the Authority has reason to believe that circumstances exist under which, if the person were a licensee, there would exist a ground on which the Authority may revoke his licence under section 19 (2);

(c) the Authority has reason to believe that the person is contravening, is likely to contravene or has contravened, any provision of this Act;

(d) the person has been convicted of an offence under this Act or has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that he had acted fraudulently or dishonestly; or

(e) the person has been convicted of an offence involving the contravention of any law or requirement of a foreign country or territory relating to any financial advisory service provided by that person.

[2/2005]

(2) A prohibition order made under subsection (1) may —

(a) prohibit the person from providing any financial advisory service, or from providing such financial advisory service in specified circumstances or capacities, whether permanently or for a specified period; and

(b) include a provision allowing the person, subject to any condition specified in the order —

(i) to do specified acts; or

(ii) to do specified acts in specified circumstances,

that the order would otherwise prohibit him from doing.

(3) The Authority shall not make a prohibition order against a person without giving the person an opportunity to be heard.

(4) Any person who is aggrieved by the decision of the Authority to make a prohibition order against him may, within 30 days of the decision, appeal in writing to the Minister.

[Aust. Corporations 2001, Clauses 920A, 920B]

Effect of prohibition orders
60. —(1) A person against whom a prohibition order is made shall comply with the prohibition order.

(2) No licensed financial adviser or exempt financial adviser shall employ or otherwise deal with any representative against whom a prohibition order has been made under section 59 to the extent that such employment or dealing is prohibited by the order.

(3) Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $75,000 or to imprisonment for a term not exceeding 2 years or to both.

(4) Any licensed financial adviser or exempt financial adviser which contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.

[Aust. Corporations 2001, Clause 920C]

Variation or revocation of prohibition orders
61. —(1) The Authority may vary or revoke a prohibition order, by giving written notice to the person against whom the order was made, if the Authority is satisfied that it is appropriate to do so because of a change in any of the circumstances based on which the Authority made the order.

(2) The Authority may vary or revoke a prohibition order under subsection (1) —

(a) on its own initiative; or

(b) if the person against whom the order was made lodges with the Authority an application for the Authority to do so, accompanied by such document or fee as may be prescribed.

(3) The Authority shall not vary a prohibition order made against a person under subsection (2) (a) without giving the person an opportunity to be heard.

(4) Any person who is aggrieved by the decision of the Authority to vary a prohibition order made against him under subsection (2) (a) may, within 30 days of the decision, appeal in writing to the Minister.

[Aust. Corporations 2001, Clause 920D]

Date of effect of prohibition orders
62. A prohibition order, or any variation or revocation of a prohibition order, shall take effect on a date as specified in the order by the Authority.

[Aust. Corporations 2001, Clause 920E]

Registers
63. —(1) The Authority shall establish and maintain one or more registers in respect of the following persons:

(a) licensees;

(b) officers removed by licensed financial advisers as directed by the Authority in the exercise of its powers under section 57;

(c) persons against whom any prohibition order is made under section 59; and

(d) such other persons as may be prescribed.

(2) The Authority may prescribe the manner in which the registers are established or maintained, including the details or particulars required to be entered in the registers.

(3) Any person may, upon payment of such fee as may be prescribed, inspect and take an extract from the registers established under subsection (1), and any such extract, certified by the Authority to be a true copy, shall be admissible as evidence in any legal proceedings.

[Aust. Corporations 2001, Clauses 922A, 922B]

Codes, guidelines, etc., by Authority
64. —(1) The Authority may issue, and in its discretion publish by notification in the Gazette or in any other manner it considers appropriate, such codes, guidelines, policy statements, practice notes and no-action letters as it considers appropriate for providing guidance —

(a) in furtherance of its regulatory objectives;

(b) in relation to any matter relating to any of the functions of the Authority under this Act; or

(c) in relation to the operation of any of the provisions of this Act.

(2) The Authority may, at any time, amend or revoke the whole or any part of any code, guideline, policy statement, practice note or no-action letter issued under this section.

(3) Where amendments are made under subsection (2) —

(a) the other provisions of this section shall apply, with the necessary modifications, to such amendments as they apply to the code, guideline, policy statement, practice note or no-action letter; and

(b) any reference in this Act or any other written law to the code, guideline, policy statement, practice note or no-action letter, however expressed, shall, unless the context otherwise requires, be a reference to the code, guideline, policy statement, practice note or no-action letter as so amended.

(4) Any person who fails to comply with any of the provisions of a code, guideline, policy statement or practice note issued under this section that applies to him shall not of itself render that person liable to criminal proceedings, but any such failure may, in any proceedings, whether civil or criminal, be relied upon by any party to the proceedings as tending to establish or negate any liability which is in question in the proceedings.

(5) The issue by the Authority of a no-action letter shall not of itself prevent the institution of any proceedings against any person for the contravention of any provision of this Act.

(6) Any code, guideline, policy statement or practice note issued under this section may be of general or specific application, and may specify that different provisions thereof apply to different circumstances or provide for different cases or classes of cases.

(7) For the avoidance of doubt, any code, guideline, policy statement, practice note or no-action letter issued under this section shall be deemed not to be subsidiary legislation.

(8) In this section, a no-action letter means a letter written by the Authority to a person to the effect that, if the facts are as represented by the person, the Authority will not institute proceedings against the person in respect of a particular state of affairs or particular conduct.

[HK SF Bill, Clause 385; SF Bill, Clause 321]

Appointment of assistants
65. —(1) Subject to subsection (1A), the Authority may appoint any person to exercise any of its powers or perform any of its functions or duties under this Act, either generally or in any particular case, except the power to make subsidiary legislation.

[15/2003]

(1A) The Authority may, by notification published in the Gazette, appoint one or more of its officers to exercise the power to grant an exemption to any person (not being an exemption granted to a class of persons) under a provision of this Act specified in the Third Schedule, or to revoke any such exemption.

[15/2003]

(2) Any person appointed by the Authority under subsection (1) shall be deemed to be a public servant for the purposes of the Penal Code (Cap. 224).

[SF Bill, Clause 320]

General provisions as to winding up
66. —(1) The persons who may apply under the Companies Act (Cap. 50) for the winding up of the affairs of a licensed financial adviser, or for the continuance of the winding up of the affairs of a licensed financial adviser subject to the supervision of the court, shall include the Authority.

[42/2005]

(2) The Authority may, in accordance with the provisions of the Companies Act, apply for the winding up of a licensed financial adviser if the licensed financial adviser has contravened any of the provisions of this Act.

[42/2005]

(3) The Authority shall be a party to any proceedings under the Companies Act relating to the winding up of the affairs of a licensed financial adviser.

(4) The liquidator in any winding up referred to in subsection (3) shall give the Authority such information as it may, from time to time, require about the affairs of the licensed financial adviser.

(5) Any liquidator who contravenes subsection (4) shall be guilty of an offence.

[Insurance Intermediaries, s. 33]

Power of Authority to publish information
67. The Authority may, from time to time and in such form or manner as it considers appropriate, publish information relating to all or any of the following:

(a) the lapsing, revocation or suspension of the licence of any person under section 19;

(b) the removal of any officer under section 57;

(c) the making of any prohibition order against any person under section 59;

(d) the acceptance by any person of an offer to compound an offence under section 89;

(e) the reprimand of any person under section 97;

(f) the revocation or withdrawal of any exemption granted under this Act;

(g) the conviction of any person for any offence under this Act;

(h) the conviction of any licensee for any offence, whether in Singapore or elsewhere;

(i) any other action as may have been taken by the Authority against any person under this Act,

and any other information as the Authority may consider necessary or expedient to publish in the public interest.