21 April, 2016
Some financial advisers in Singapore have been granted permission to directly invest in exchange-traded funds (EFTs) on behalf of their investor customers after the country's financial regulator relaxed its rules, The Business Times has reported.
Financial advisers previously had to point clients to brokers if they wanted to invest in EFTs. However, according to The Business Times, the Monetary Authority of Singapore (MAS) has granted some financial advisers permission to buy and sell the funds for their clients directly via investment platforms on a case by case basis.
Financial advisers welcomed the move as benefitting clients that do not want to have to manage their own portfolios, The Business Times said. MAS will only grant permission if clients' orders are given in writing or electronically, and not over the phone, the advisers said.
In a public consultation paper last June, MAS proposed expanding the Securities and Futures Act (SFA) Dealing Exemption to allow financial advisers to "help customers transact in both listed and unlisted collective investment schemes (CIS) if such dealing is incidental to their advisory activities".
Dealing by a financial adviser would be considered incidental if the financial adviser had made a recommendation to the customer in respect of a particular CIS, the customer accepted the recommendation and the financial adviser proceeded to help the customer follow that recommendation, MAS said.
Currently, financial advisers can transact in unlisted unit trusts for clients, but not in listed CIS.
For further information please contact:
Bryan Tan, Partner, Pinsent Masons MPillay
bryan.tan@pinsentmasons.com
