Country Manuals Independent Portfolio Manager/Advisor (EAM)
BRP SA is glad to announce the publication of its COUNTRY MANUAL INDEPENDENT PORTFOLIO MANAGER/ADVISOR for the following jurisdiction:
SINGAPORE OUT OF COMPANY’S COUNTRY OF ESTABLISHMENT (Def, RS & BT)
Regulatory Summary
Material changes
This Country Manual has been reviewed to ensure that the content of all the documents remains accurate and up-to-date. In particular, this update follows an in-depth analysis of the Singaporean regulation relevant for cross-border purposes.
As a preliminary remark, note that financial services in Singapore are regulated by a number of different legislation; in particular
– Custodial, brokerage and discretionary asset management services are regulated by the Securities and Futures Act (“SFA”); and
– Investment advisory services are regulated by the Financial Advisers Act (the “FAA”).
While the overall approach of the Country Manual has not undergone massive changes, following consultations with our local counsel, the Country Manual now includes enlarged explanations of the regulatory framework taking into consideration not only the legislation relevant for cross-border purposes, but also the interpretation of the regulator and regulatory practice. Specifically, with regard to the recognition of reverse solicitation under the different regulations and its interpretations, the update provides more background information. Moreover, we have prominently stated existing exemptions under the law for qualified prospects and clients for services regulated under the SFA and the FAA.
Notable changes include the following:
(1) Financial advice exclusively provided to institutional investors (financial institutions regulated in Singapore) is generally exempt from licensing requirements under the FAA), which has been introduced into the Manual in the context of qualified clients for all FAA-related activities (i.e. for any solicitation, negotiation and provision of such services). Where non-qualified prospects and clients are concerned, however, we have clarified that reverse solicitation is not recognised under the regulatory practice for FAA-regulated services conducted on-site upon request (again, pertinent for all solicitation, negotiation and provision of such services).
(2) Pursuant to explicit MAS guidance, an activity within the ambit of a service regulated in the SFA to a financial institution regulated in Singapore is exempt from licensing requirements, even when undertaken on the Company’s initiative, if the activity is carried out wholly outside Singapore (i.e. not in case the Company’s representative visits Singapore) and where this is a bona fide sale or purchase of financial services between the foreign entity and the regulated person. Therefore, in such a situation concerning such qualified client, the Company is for example allowed to actively solicit or undertake pre-contractual activities related to discretionary asset management services via remote means of communication into Singapore (e.g. providing a prospect with a discretionary asset management agreement via remote means of communication upon the Company’s initiative). The contract must be accepted, concluded and executed abroad (this must be explicitly stated in a clause within the contract), i.e. the Company has to countersign it outside of Singapore.
(3) Given that custodial services follow the same rules as discretionary asset management services, the answers for the introduction of a foreign custodian by the EAM have been amended. In particular, reverse solicitation is not recognised on-site for services regulated under the SFA.
(4) The provision of investment research or financial analysis constitutes a regulated and licensable financial advisory service under the FAA (see above). Consequently, actively providing investment research to a non-qualified client on Singaporean territory is not allowed. Such activity seems to be allowed when undertaken via remote means of communication upon the Company’s initiative towards a non-qualified client provided the service is covered by an ongoing advisory agreement. Note, however, that there is no formal rule of official position to rely upon.
(5) We have clarified that in order to avoid any requalification of the service, the provision of macroeconomic information should not aim at the provision of personalised investment advice or the solicitation of orders, be it in Singapore or via remote means of communication.
(6) As financial advice exclusively provided to institutional investors (financial institutions regulated in Singapore) is exempt from licensing requirements under the FAA, the provision of research material, generic and personalised recommendation lists and investment advice with or without an ongoing advisory agreement to a qualified client (see above) is allowed, be it in Singapore (on an occasional basis) or via remote means of communication.
(7) Singapore laws and regulation generally do not provide for a licensing requirement for reporting activities. Reporting to a client on the performance of the managed account is permitted on an occasional basis in Singapore, be it actively or upon request. However, such activity bears the risk of being considered an ancillary activity directly related to the provision of discretionary asset management services.
Non-material changes
The documents have been reformatted onto the latest templates. Some comments have been reworded, additional references to applicable law/regulation have been made in order to provide more clarity and to reflect the current regulatory situation more accurately. Further non-material changes have been made throughout the document.
Behaviour Template
The answers in the BT have been aligned to those contained in the RS.
BT Short Comparison
BRP has created a comparison document allowing users to quickly identify the modifications made compared to the previous version of the PB Manual (BT Short Comparison). The BT Short Comparison can be found on BRP’s platform (mybrponline) in the Search tab by entering in the Document Field “CM EAM BT SHORT COMP” and “SINGAPORE” in the Target Country Field.
The BT Short Comparison should be read as follows:
The first column contains a short description of the activity in question. The second column contains the answers of the previous version of the Country Manual (online until the day of the alert). The third column contains the new answers of the most recent version of the Country Manual. Only the modified answers are displayed (in color). If the answers in the new version are unchanged compared to the previous version, they are shaded in grey.
Best regards,