Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2)

1 Monetary Authority of Singapore FINANCIAL ADVISERS ACT (CAP. 110) GUIDELINES ON APPLICATIONS FOR APPROVAL OF ARRANGEMENTS UNDER REGULATION 32CB OF THE FINANCIAL ADVISERS REGULATIONS (RG 2)

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 2 Guideline No : FAA-G16 Issue Date : 1 January 2019 (Last revised on 1 August 2019) GUIDELINES ON APPLICATIONS FOR APPROVAL OF ARRANGEMENTS UNDER REGULATION 32CB OF THE FINANCIAL ADVISERS REGULATIONS (RG 2) Purpose of these Guidelines

1 These Guidelines are issued pursuant to section 64 of the Financial Advisers Act (Cap. 110) [“the Act”] to provide guidance on an application for approval of an arrangement under regulation 32CB of the Financial Advisers Regulations (Rg 2) [“Regulation 32CB”]. 2 These Guidelines set out the Monetary Authority of Singapore [“the Authority”]’s assessment criteria and application procedures for approval of arrangements under Regulation 32CB and the Authority’s supervisory expectation in relation to approved arrangements. Definitions 3 For the purposes of these Guidelines: “ACMF Framework” means ASEAN Capital Market Professional Mobility Framework; “ACMF Handbook” means the Handbook on ACMF Pass under ASEAN Capital Market Professional Mobility Framework, set out at https://www.mas.gov.sg/- /media/MAS/Regulations-and-Financial-Stability/Regulations-Guidance-and￾Licensing/Financial-Advisers/Guidelines/Handbook-on-ACMF-Pass-under-the￾ASEAN-Capital-Market-Professional-Mobility-Framework.pdf; “ACMF Pass” means an arrangement between a relevant entity and a Singapore Entity approved by the Authority under Regulation 32CB in relation to the provision of the financial advisory service specified under paragraph 8(a) of these Guidelines;

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 3 “ACMF Participant” means a relevant entity that is providing a financial advisory service in Singapore effected under an arrangement approved by the Authority under Regulation 32CB; “ASEAN” means Association of Southeast Asian Nations; “Cross-Border Publication of Research Report Arrangement” means an arrangement between a relevant entity and a Hosting Platform Operator approved by the Authority under Regulation 32CB in relation to the provision of the financial advisory service specified under paragraph 8(b) of these Guidelines; “FAR” means the Financial Advisers Regulations (Rg 2); “host entity”, in relation to — (a) an application for approval of an ACMF Pass, means a Singapore Entity that is proposing to enter into an arrangement with a relevant entity in relation to the provision of the financial advisory service specified under paragraph 8(a) of these Guidelines; or (b) an application for approval of a Cross-Border Publication of Research Report Arrangement, means a Hosting Platform Operator that is proposing to enter into an arrangement with a relevant entity in relation to the provision of the financial advisory service specified under paragraph 8(b) of these Guidelines; “Hosting Platform Operator” means any person mentioned in paragraph (2)(a)(i) to (iii) of Regulation 32CB, who will be making available research reports, whether in electronic, print or other form, containing advice by a ACMF Participant concerning any Specified ASEAN capital markets products to investors in Singapore, pursuant to a Cross-Border Publication of Research Report Arrangement; “officer” has the same meaning as in section 4(1) of the Companies Act (Cap. 50); “Recognised ACMF member” means a regulatory authority that is specified in the Appendix of these Guidelines; “Recognised Representative” means a person, by whatever name called, in the direct employment of, or acting for, or by arrangement with, an ACMF Participant,

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 4 who performs on behalf of the ACMF Participant any financial advisory service in Singapore pursuant to a ACMF Pass, whether or not he is remunerated, and whether his remuneration, if any, is by way of salary, wages, commission or otherwise, and includes any officer of the ACMF Participant; “Singapore Entity” means a person who is a licensed financial adviser or an exempt financial adviser under section 23(1)(a), (b), (c), (d) or (e) of the Act; “Specified ASEAN capital markets products” means the following types of ASEAN capital markets products: (a) shares that are listed for quotation or quoted on an organised market in any member country of ASEAN; (b) bonds1 , whether or not such bonds are listed for quotation or quoted on an organised market in any member country of ASEAN; (c) units in a collective investment scheme, whether or not such units are listed for quotation or quoted on an organised market in any member country of ASEAN; “Specified ASEAN participating country” means any ASEAN participating country that is specified in the Appendix of these Guidelines. 3A The expressions used in these Guidelines, shall, except where expressly defined in these Guidelines and where the context otherwise requires, have the same meanings as in the Act and Regulation 32CB.

1 For the avoidance of doubt, bonds include bonds that are sukuk.

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 5 Applicability of Regulation 32CB 4 Section 6(1) of the Act provides that no person shall act as a financial adviser in Singapore in respect of any financial advisory service unless he is authorised to do so by a financial adviser's licence or is an exempt financial adviser. 5 In particular, Regulation 32CB prescribes a relevant entity as an exempt financial adviser under section 23(1)(f) of the Act in respect of a financial advisory service provided under an arrangement between the relevant entity and a company incorporated in Singapore, an unincorporated association formed or constituted in Singapore, a licensed financial adviser or a financial adviser who is exempt under sections 23(1)(a) to (e) of the Act, which has been approved by the Authority pursuant to an application made to the Authority. 6 Individuals who are representatives of the relevant entity are not required to be appointed or provisional representatives under the Act if — (a) the type and scope of the financial advisory service provided by the representatives are within the type and scope of, or are the same as, that provided by the relevant entity; and (b) the manner in which the representatives provide that type financial advisory service is the same as the manner in which the relevant entity provides that type of financial advisory service. 7 The Authority only considers arrangements made between the relevant entity and a host entity for approval under Regulation 32CB. 8 The types of arrangement and financial advisory service which the Authority considers for approval under Regulation 32CB are: (a) an arrangement between a Singapore Entity and a relevant entity under the ACMF Pass, in respect of the financial advisory service of advising others, either directly or through publications or writings, and whether in electronic, print or other form concerning any Specified ASEAN capital markets product, other than in the manner under paragraph 2 of the Second Schedule of the Act or advising on corporate finance within the meaning of the Securities and Futures Act (Cap. 289); and (b) an arrangement between a Hosting Platform Operator and a relevant entity under the Cross-Border Publication of Research Report Arrangement, in respect of the financial advisory service of advising others by issuing or

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 6 promulgating research analyses or research reports, whether in electronic, print or other form concerning any Specified ASEAN capital markets products. 9 The approval of the arrangement should not be taken as an approval of all activities proposed to be conducted by the host entity under the arrangement. The host entity should ensure that its proposed activities are in compliance with all applicable laws, rules and regulations in Singapore, including all applicable licensing requirements under the Act. Assessment Criteria of Relevant Entity 10 In assessing whether approval of the arrangements specified under paragraph 8(a) and (b) should be granted, the Authority will consider whether the relevant entity satisfies certain criteria, including but not limited to the following criteria: (a) whether it possesses a minimum of five years of corporate track record in the specific financial advisory services that it is proposing to effect under the arrangement; (b) whether it is financially sound and has discharged its functions in an efficient, honest and fair manner during the five-year period mentioned in sub-paragraph (a); and (c) whether it is licensed or otherwise authorised to conduct the relevant financial advisory services in a Specified ASEAN participating country and is subject to supervision by the Recognised ACMF member having regulatory oversight in the Specified ASEAN participating country. 11 Paragraph 10 sets out a list of non-exhaustive criteria that needs to be met in order for an approval to be obtained. Nonetheless, the Authority reserves the right to refuse to grant approval as the Authority deems fit, including where the Authority is of the view that the arrangement may facilitate business practices or market conduct that could undermine regulatory integrity or pose a risk to financial stability and market confidence. ACMF Pass Responsibilities of Singapore Entity 12 The Authority expects that the Singapore Entity ensures that all Recognised Representatives of the ACMF Participant meet the following criteria at all times:

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 7 (a) be at least 21 years old; (b) is licensed or otherwise authorised to conduct the relevant financial advisory services by a Recognised ACMF member; (c) is subject to the laws and regulations of the Specified ASEAN participating country where the Recognised ACMF member has regulatory oversight and is subject to supervision by the Recognised ACMF member having regulatory oversight in the Specified ASEAN participating country; and (d) satisfies the fit and proper criteria as set out in Section C in the Singapore section of Appendix 2 to the ACMF Handbook. 13 With respect to the Recognised Representatives’ activities in connection with the arrangement that is approved by the Authority, the Singapore Entity must ensure that: (a) the Recognised Representatives only act as representatives of the ACMF Participant in respect of the arrangement that is approved by the Authority under Regulation 32CB; and (b) the Recognised Representatives do not conduct any of the following activities: (i) solicit for sales of any Specified ASEAN capital markets product; or (ii) provide advice to investors by considering investor’s investment objective, financial situation and particular needs. 14 For arrangements where the Recognised Representative act as a representative in respect of a financial advisory service that is provided to any investor who does not fall within the definition of “accredited investor”, “expert investor” or “institutional investor” under regulation 2(1) of the FAR, the Authority expects that the Singapore Entity — (a) ensures that the Recognised Representative is accompanied at all times by an authorised employee or representative of the Singapore Entity when meeting any client or member of the public in the course of acting as a representative in respect of the financial advisory service; (b) monitors the conduct of the Recognised Representative; and (c) ensures the Recognised Representative’s compliance with the laws and regulations as well as any conditions or restrictions imposed by the Authority when conducting any activities under the ACMF Framework. 15 For arrangements where the financial advisory service is provided to investors that are investment vehicles, applicants should apply a “look-through” method to ascertain whether the end-beneficiaries of such investment vehicles satisfy the definition of

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 8 “accredited investor”, “expert investor” or “institutional investor” in regulation 2(1) of the FAR, as the case may be. 16 The Singapore Entity is also subject to conditions and restrictions imposed under the approval granted by the Authority, including the following: (a) The Singapore Entity shall maintain a register in respect of every Recognised Representative (regardless of the duration the Recognised Representative resides in Singapore) containing information such as the duration of the Recognised Representative’s visit to Singapore to carry out activities under the approved arrangement, his qualifications and the status of his licence or authorisation in jurisdictions other than Singapore; (b) The Singapore Entity shall ensure that proper documentation in relation to the approved arrangement, such as materials circulated or presented to investors, are kept for the duration of the approved arrangement until at least five years after the date of cessation of the approved arrangement and furnish such documentation to the Authority as the Authority may require; and (c) The Singapore Entity shall implement policies and procedures to provide for the oversight of the conduct of the ACMF Participant and the Recognised Representatives, handling complaints arising from the approved arrangement and the resolving of disputes between investors and the Recognised Representatives. 17 These Guidelines do not set out an exhaustive list of the Authority’s expectations on the Singapore Entity. The Authority may also impose other conditions and restrictions upon the approval granted, as the Authority deems fit, taking into account the particular arrangements proposed by the applicants. Validity Period of ACMF Pass 18 Upon approval, the ACMF Pass will be valid for a period of two years, unless the ACMF Pass lapses or is cancelled by the Authority prior to the expiry of this period. 19 If the Singapore Entity intends to renew the ACMF Pass, it must submit a renewal application at least 14 working days prior to the expiry of the ACMF Pass. The Authority shall re-assess the arrangement to consider if the ACMF Pass should be renewed.

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 9 Cross-Border Publication of Research Report Arrangement Conditions and Restrictions 20 The Authority will impose conditions and restrictions under an approval granted by the Authority to a Cross-Border Publication of Research Report Arrangement, including the following: (a) the research analyses and research reports are issued or promulgated by the ACMF Participant to the same classes of investors in Singapore as it is issued or promulgated to in the Specified ASEAN participant country where it is being licensed and supervised by a Recognised ACMF Member; (b) The Hosting Platform Operator had obtained consent from the ACMF Participant for the Hosting Platform Operator to make available the research analyses and the research reports to investors in Singapore, whether in electronic, print or other form; (c) the research analyses and research reports are made available by the Hosting Platform Operator in its original form with no changes to the research analyses and the research reports prepared by the ACMF Participant; (d) the Hosting Platform Operator does not endorse or otherwise comment on the research analyses and research reports; (e) the research analyses and research reports must include a disclaimer to notify investors in Singapore that the research analyses or research reports are issued or promulgated by the ACMF Participant, and not the Hosting Platform Operator; and (f) the Hosting Platform Operator does not provide a financial advisory service in respect of the research analyses and research reports. 21 The Authority may also impose other conditions and restrictions upon the approval granted, as the Authority deems fit, taking into account the particular arrangements proposed by the applicants. Applications 22 An application for approval under Regulation 32CB for the purposes of obtaining the ACMF Pass or for the approval of a Cross-Border Publication of Research Report Arrangement, must be submitted by the host entity using the format specified in this link: https://www.mas.gov.sg/-/media/MAS/Regulations-and-Financial-Stability/Regulations￾Guidance-and-Licensing/Financial-Advisers/Guidelines/ACMF-Application-Form-

Guidelines on Applications for Approval of Arrangements under Regulation 32CB of the Financial Advisers Regulations (Rg 2) 10 01082019.docx. The application should include key information that seeks to address the assessment criteria in paragraph 10. In approving an application, the Authority would expect the roles and responsibilities of the relevant entity and the host entity in the proposed arrangement to be clearly formalised in a service level agreement or an equivalent document. 23 In respect of an application for approval of an arrangement under the ACMF Pass, the application must include the declarations in relation to the activities of the Recognised Representatives mentioned in paragraph 13(b), in the application form. 24 In respect of an application for approval of a Cross-Border Publication of Research Report Arrangement, the application must include the declarations in relation to the approval conditions set out in paragraph 20, in the application form. 25 In granting the approval under Regulation 32CB, the Authority reserves the right to review, cancel or vary the approval of any arrangement or impose new conditions or restrictions under the approval as the Authority sees fit, including where there is a material change in the circumstances of the arrangement. A material change refers to a change in the substance of the arrangement rather than one of form. Such changes may be in relation to the type of financial advisory services provided, the target clientele or the role of the host entity. Changes in organisational structure or names of entities, and similar organisational changes which do not affect the substance of the arrangement, would not normally be considered material.

11 APPENDIX

ASEAN PARTICIPATING COUNTRIES RECOGNISED ACMF MEMBER 1 Thailand The Securities and Exchange Commission 2 Malaysia The Securities Commission Malaysia 3 Philippines The Philippines Securities and Exchange Commission