3) CMS Dealing in Capital Market Products
Dealing in capital market products includes marketing or dealing in and introducing broker activity relating to capital market products such as securities, debentures, units of CIS, exchange-traded derivatives, over-the-counter derivatives, and spot foreign exchange contracts for the purpose of leveraged foreign exchange trading.
Summary of requirements:
- established track record for the past 5 years
- operate out of a physical office in Singapore
- ensure applicant, employees, representatives and substantial shareholders are fit and proper
- minimum of 2 board members, at least one of whom is resident in Singapore
- CEO is resident in Singapore
- at least 2 full time employees
- letter of responsibility or undertaking from parent company
- potential banker’s guarantee, Professional Indemnity Insurance or Letter of Undertaking
- base capital ranging from 50,000 to 5 million depending on type of broking activities carried out
- representatives meet minimum examination qualifications.
4) CMS Dealing in Corporate Finance Advisory
Corporate finance advisors are licensed and governed under the Securities and Futures Act and its subsidiary legislation. The scope of corporate finance advisors may include:
- giving advice on the laws or regulatory requirements on fund-raising by an entity, trust or collective investment scheme
- giving advice on an offer to acquire or to dispose of capital markets products
- giving advice relating to an arrangement, reconstruction or take-over of a company or a business trust, or any of its assets or liabilities.
Capital markets products include securities, securities-based derivatives contracts and collective investment schemes.
Summary of Requirements:
- established track record for the past 5 years
- operate out of a physical office in Singapore
- ensure applicant, employees, representatives and substantial shareholders are fit and proper
- minimum of 2 board members, at least one of whom is resident in Singapore
- CEO is resident in Singapore
- at least 2 full time employees
- letter of responsibility or undertaking from parent company
- potential banker’s guarantee, Professional Indemnity Insurance or Letter of Undertaking
- base capital of S$250,000
- representatives meet minimum examination qualifications.
Exemptions
There are several exemptions available for advising on corporate finance which include:
- If a company gives advice to accredited, expert or institutional investors and such advice is not for the offer of capital markets products to the public. Where the accredited, expert or institutional investor is a public company or a company listed on an exchange or its subsidiary, such advice is also not circulated to that investor’s shareholders. An exempt corporate finance application must be submitted to MAS in order to operate in Singapore.
- If a company is already licensed by MAS as a bank, merchant bank, finance company or insurance company, it will be deemed to be an exempt corporate finance adviser and submit relevant notification to MAS.
5) Payment Services Act (PSA)
The streamlines the payment services regulatory framework into a single piece of legislation. There are two regulatory frameworks which run parallel. The first framework is a designation regime that enables MAS to designate significant payment systems and regulate operators, settlement institutions and participants of these designated payment systems for financial stability reasons and efficiency reasons. The second framework is the licensing framework for payment service providers.
There are three (3) license-types available within the PSA:
- Money-Changing License
- Standard Payment Institution License
- Major Payment Institution License.
Under the Standard and Major Payment Institution License categories the following activities can be carried out:
- account issuance – issuing payment account or any service relating to any operation for operating a payment account
- domestic money transfer – service providing local funds transfer within Singapore
- cross border money transfer – service providing inbound and outbound remittance services in Singapore
- merchant acquisition – service providing merchant acquisition in Singapore where service provider processes payment receipts on behalf of merchants
- e-money issuance – service issuing e-money to allow the user to pay merchants or transfer to another individual
- digital payment token – service of buying and selling digital payment tokens or providing platform to allow persons to exchange digital payment tokens
- money changing – the service of buying and selling foreign currency notes.
Whether one falls under Standard Payment Institution or Major Payment Institution depends on meeting certain thresholds. In the event the below thresholds are exceeded, you are required to apply for Major Payment Institution Licence.
- S$3 million monthly transactions for any payment service (other than e-money account issuance and money-changing services)
- S$6 million monthly transactions for two or more payment services (other than e-money account issuance and money-changing services)
- S$5 million of daily outstanding e-money.
Summary of Requirements:
6) Financial Advisers Licence
A Financial Advisers Licence is governed by the Financial Advisers Act and relevant subsidiary legislation.
This covers advising others concerning any investment products (including securities, debentures, units of CIS, exchange-traded derivatives, over-the-counter derivatives, spot foreign exchange contracts and life policies), issuing or promulgating research analyses or research reports concerning any investment products, and arranging life policies.
SUMMARY OF REQUIREMENTS:
- meet fitness and propriety of the company its shareholders and directors
- track record, management expertise and financial soundness of the company and its parent company or major shareholders
- ability to meet the minimum financial requirements and professional indemnity insurance requirements with paid up capital ranging from S$150,000 to S$300,000
- strength of internal compliance systems
- business plans and projections
- minimum of 2 directors, at least one of whom should be a resident of Singapore
- Chief Executive Officer with at least 10 years of relevant experience, of which at least 5 years must have been in a managerial capacity, and who is resident in Singapore
- Minimum of 3 full-time Singapore-based individuals who have at least 5 years of relevant working experience.
Exemptions
Several exemptions from holding the Financial Advisers Licence are available:
- if the financial adviser only gives advice or provides research analysis on bonds to accredited investors, expert investors or institutional investors
- if the financial adviser only gives advice or provides research analysis to not more than 30 accredited investors – you must submit an exemption notification to MAS.
- if the financial adviser is already licensed by MAS as a bank, merchant bank, finance company, insurance company, insurance broker, or capital markets services licence holder – you must submit an exemption notification to MAS.
If you would like to find out more about how Waystone Compliance Solutions can assist you to apply for and obtain any of the licences discussed, please reach out to your usual Waystone Compliance Solutions representative or contact us here.
