Notice on Reporting of Misconduct of Representatives by Financial Advisers

Monetary Authority of Singapore FINANCIAL ADVISERS ACT 2001 NOTICE ON REPORTING OF MISCONDUCT OF REPRESENTATIVES BY FINANCIAL ADVISERS

Notice No: FAA-N27 Issue Date: 30 December 2025 NOTICE ON REPORTING OF MISCONDUCT OF REPRESENTATIVES BY FINANCIAL ADVISERS Introduction 1 This Notice (excluding the Annexes) is issued pursuant to section 67(1) of the Financial Advisers Act 2001 ("the Act") and takes effect from 1 January 2027. Notice No. FAA-N14 issued on 26 November 2010 is cancelled with effect from 1 January 2027. 2 This Notice shall apply to all licensed financial advisers and persons who are exempt from holding a financial adviser’s licence under section 20(1)(a), (b), (c), (d) or (e) of the Act. It sets out the reporting requirements for the misconduct of their representatives and former representatives. Definitions and Forms 3 For the purposes of this Notice — “corrective action” means any disciplinary action taken by a financial adviser against its representative, former representative, supervisor or former supervisor, or any remedial measure taken by a financial adviser, in respect of a misconduct; “designated investment product” has the same meaning as in section 34(7) of the Act; “financial adviser” means a licensed financial adviser or a person exempt from holding a financial adviser’s licence under section 20(1)(a), (b), (c), (d) or (e) of the Act; “Investigation Report” means a report by that name which is submitted in accordance with paragraph 4;

Notice on Reporting of Misconduct of Representatives by Financial Advisers 2 “misconduct” means — (a) any act or omission in the provision of any financial advisory service which amounts to gross negligence or which results in any inappropriate advice, inappropriate recommendation, misrepresentation, or inadequate disclosure of information to a client, including: (i) the making of a recommendation to a client without due consideration as to the client’s investment objectives, financial situation or particular needs; (ii) the making of a deceptive, false or misleading statement to a client; or (iii) the failure to disclose to a client all material information relating to any designated investment product recommended by the representative, as specified in MAS Notice FAA-N03 Notice on Information to Clients and Product Information Disclosure, where the act or omission has a materially adverse impact on the interests of the client or impinges on the fitness and propriety of the representative; or (b) any act involving fraud, dishonesty, illegal monetary gains, or any offence of a similar nature, such as cheating, forgery, dishonest misappropriation of monies, criminal breach of trust, bribery, money laundering and tax evasion; “Misconduct Report” means a report by that name which is submitted in accordance with paragraph 4; “public authority” means any body established by or under any written law and exercising powers vested therein by written law for a public purpose; “Update Report” means a report on any update to a Misconduct Report or an Investigation Report which is submitted in accordance with paragraph 4.

Notice on Reporting of Misconduct of Representatives by Financial Advisers 3 4 Unless the Authority otherwise permits, any Investigation Report, Misconduct Report or Update Report required to be submitted to the Authority under this Notice must be submitted through the electronic system established by the Authority in the relevant form set out in the electronic system, and the form shall be completed in accordance with such directions as may be specified in the form and electronic system. Submission of Misconduct Report and Investigation Report Submission of the Misconduct Report 5 If a financial adviser has reasonable grounds to believe that — (a) its representative had committed any misconduct; or (b) its former representative had committed any misconduct during the period when he or she was a representative of the financial adviser, the financial adviser must submit a Misconduct Report to the Authority, providing all the applicable information required therein in relation to the misconduct (called in this Notice “alleged misconduct”), no later than 21 calendar days, or such longer period as the Authority may allow in writing, after the date on which the financial adviser first has reasonable grounds to believe that which is mentioned in sub-paragraph (a) or (b). Submission of the Investigation Report 6 If the alleged misconduct falls within paragraph (b) of the definition of “misconduct”, a financial adviser mentioned in paragraph 5 must — (a) assess whether it should lodge a police report in respect of the alleged misconduct; and (b) at the same time as its submission of the Misconduct Report, submit an Investigation Report to the Authority, providing all the applicable information required therein including the following: (i) in the case where it has not lodged a police report by the time it submits the Misconduct Report —

Notice on Reporting of Misconduct of Representatives by Financial Advisers 4 (A) confirmation of whether it has assessed and decided not to lodge a police report or is still in the process of assessing this; and (B) if it has assessed and decided not to lodge a police report, the reasons for its decision not to lodge a police report; (ii) in the case where it has lodged a police report by the time it submits the Misconduct Report — the information mentioned in paragraph 8. 7 If the alleged misconduct falls outside paragraph (b) of the definition of “misconduct”, a financial adviser mentioned in paragraph 5 must submit an Investigation Report to the Authority — (a) in the case where — (i) the financial adviser’s reasonable grounds mentioned in paragraph 5 are, in any way, based on or corroborated by the findings of any internal investigation 1 into the alleged misconduct at the time it submits the Misconduct Report; or (ii) the financial adviser has lodged a police report in respect of the alleged misconduct by the time it submits the Misconduct Report — at the same time as its submission of the Misconduct Report; and (b) in any other case, where the financial adviser subsequently makes findings in its internal investigation which corroborates the alleged misconduct or lodges a police report in respect of the alleged misconduct — no later than 21 calendar days, or such longer period as the Authority may allow in writing, after the date on which findings are made or the police report is lodged (as the case may be). 1 A financial adviser may refer to the Guidelines on the Conduct of Internal Investigations in Annex A on the expectations relating to the conduct of internal investigations into any misconduct.

Notice on Reporting of Misconduct of Representatives by Financial Advisers 5 8 Where there is a police report lodged by the financial adviser, the Investigation Report submitted under paragraph 6 or 7 must provide all the following information, where available, together with a copy of the police report: (a) the name of the police officer investigating the case; and (b) the status of the police investigation and criminal proceedings (if any), including any outcome or result. Updates to Misconduct Report or Investigation Report 9 Once a Misconduct Report or Investigation Report is submitted in relation to an alleged misconduct, if there is any significant development which necessitates an update to any reported or reportable information in the submitted Misconduct Report or Investigation Report or both (including a Misconduct Report or Investigation Report as updated by a previously submitted Update Report), the financial adviser must submit to the Authority an Update Report or Update Reports, as the case may be2 , no later than 21 calendar days, or such longer period as the Authority may allow in writing, after the date of occurrence of that significant development. 10 In paragraph 9, “significant development” includes, but is not limited to, the following: (a) the lodging of a police report by the financial adviser in respect of the alleged misconduct; (b) a decision by the financial adviser not to lodge a police report, if the financial adviser had pursuant to paragraph 6(b)(i)(A) confirmed that it was still in the process of assessing whether it should lodge a police report; (c) an arrival at an outcome, or a change in the outcome, of the financial adviser’s internal investigation into the alleged misconduct, 2 To avoid doubt, separate Update Reports are to be provided on a Misconduct Report and on an Investigation Report as long as information arising from the significant development is reportable as part of the data fields in the applicable form for the Misconduct Report and the Investigation Report respectively. Where the information arising from the significant development is reportable as part of the data fields in the Investigation Report but not in the Misconduct Report, an Update Report is only required to update the Investigation Report and not the Misconduct Report, and vice versa.

Notice on Reporting of Misconduct of Representatives by Financial Advisers 6 regardless of whether this substantiates or does not substantiate the alleged misconduct; (d) a decision by the financial adviser to take, or to reverse, modify or add to, any corrective action in respect of the alleged misconduct3 ; (e) the financial adviser being notified or made aware, through any source, of the outcome of police investigations or criminal proceedings (if any) in respect of the alleged misconduct. 11 For a significant development mentioned in paragraph 10(a), the Update Report to the financial adviser’s submitted Investigation Report must provide all the following information, where available, together with a copy of the police report: (a) the name of the police officer investigating the case; and (b) the status of the police investigation and criminal proceedings (if any), including any outcome or result. 12 For a significant development mentioned in paragraph 10(b), the Update Report to the financial adviser’s submitted Investigation Report must provide the reasons for its decision not to lodge a police report. Provision of Misconduct Report and Update Report to Representative 13 Subject to paragraph 15, the financial adviser must provide to the representative or former representative concerned — (a) a copy of the Misconduct Report, no later than 21 calendar days, or such longer period as the Authority may allow in writing, after the date of submission of the Misconduct Report to the Authority; and (b) where applicable, a copy of each Update Report to its submitted Misconduct Report, no later than 21 calendar days, or such longer period as the Authority may allow in writing, after the date of submission of the respective Update Report to the Authority. 3 A financial adviser may refer to the Guidelines on Corrective Action in Annex B on the expectations relating to the taking of corrective action in respect of any misconduct.

Notice on Reporting of Misconduct of Representatives by Financial Advisers 7 14 To avoid doubt, a financial adviser is not required to provide to the representative or former representative, a copy of any Investigation Report or Update Report to its submitted Investigation Report, or a copy of any police report submitted to the Authority together with its Investigation Report or Update Report. 15 Paragraph 13 shall not apply if — (a) the financial adviser is acting, or is proposing to act, in connection with its internal investigation which is being, or is about to be, conducted, and the provision of the copy of the Misconduct Report or Update Report (as the case may be) to the representative or former representative concerned is likely to prejudice that investigation or proposed investigation; (b) the financial adviser knows or has reasonable grounds to suspect that any officer of a public authority is acting or is proposing to act, in connection with an investigation which is being, or is about to be, conducted, and either — (i) any officer of the public authority has requested for the financial adviser not to disclose to the representative or former representative information in respect of the alleged misconduct which is contained in the Misconduct Report or Update Report; or (ii) the provision of the copy of the Misconduct Report or Update Report (as the case may be) to the representative or former representative concerned is likely to prejudice that investigation or proposed investigation; or (c) the individual concerned is a former representative and the financial adviser has taken reasonable steps but is unable to contact the former representative using his or her last known contact details. 16 A financial adviser who relies on paragraph 15(a) or (b) must provide a copy of the Misconduct Report or Update Report (as the case may be) to the

Notice on Reporting of Misconduct of Representatives by Financial Advisers 8 representative or former representative as soon as practicable after the circumstances mentioned in that paragraph no longer apply4 . Keeping of Relevant Records 17 A financial adviser must keep proper records of — (a) documentary evidence that a copy of the Misconduct Report or Update Report has been provided to the representative or former representative concerned; (b) its assessment on the likelihood of prejudice to any investigation, if the financial adviser does not provide a copy of the Misconduct Report or Update Report to the representative or former representative concerned in reliance on paragraph 15(a) or (b)(ii); (c) the request from the officer of the public authority, if the financial adviser does not provide a copy of the Misconduct Report or Update Report to the representative or former representative concerned in reliance on paragraph 15(b)(i); or (d) the reasonable steps taken by the financial adviser to contact the former representative, if the financial adviser does not provide a copy of the Misconduct Report or Update Report to the former representative concerned in reliance on paragraph 15(c). 18 Where a financial adviser conducts an internal investigation into an alleged misconduct, the financial adviser must keep proper records of the following, where applicable: (a) a summary of the facts of the case, such as the source of the allegation or suspicion, the number of clients affected, details of relevant transactions and the financial impact on the clients; 4 That is, when the provision of such copy is no longer likely to prejudice any investigation or proposed investigation, or the officer of the public authority no longer requests for the financial adviser not to disclose information contained in such Misconduct Report or Update Report.

Notice on Reporting of Misconduct of Representatives by Financial Advisers 9 (b) accounts from relevant parties such as the representative or former representative, his or her supervisor or former supervisor and the client; (c) documentary evidence of the alleged misconduct; (d) the investigator’s assessment and recommendation; (e) corrective action taken, and basis for the corrective action; (f) appeal against the corrective action, along with assessment and the outcome of the appeal. 19 A financial adviser must keep, for the period prescribed in section 49(3) of the Act read with regulation 26(1) of the Financial Advisers Regulation (Rg 2), the records mentioned in paragraphs 17 and 18. Transitional Provisions 20 Despite paragraph 5, where a financial adviser — (a) first had reasonable grounds to believe, before 1 January 2027, that any type of misconduct within the definition of “misconduct” in paragraph 3 of this Notice was committed by its representative or its former representative when he or she was its representative; and (b) has not submitted to the Authority a Misconduct Report, which is in the form set out at Appendix 1 of the Notice on Reporting of Misconduct of Representatives by Financial Advisers (MAS Notice No. FAA-N14) (“Cancelled Notice”), in relation to the misconduct before 1 January 2027, the financial adviser must submit to the Authority a Misconduct Report in relation to the misconduct under this Notice and any other document or information that may be required under paragraphs 6 to 8 of this Notice, no later than 21 calendar days, or such longer period as the Authority may allow in writing, after 1 January 2027.

Notice on Reporting of Misconduct of Representatives by Financial Advisers 10 21 This Notice does not apply to or in relation to any of the following, and despite paragraph 1, the Cancelled Notice as in force immediately before 1 January 2027 continues to apply to or in relation to any of the following as if this Notice has not been issued: (a) any case for which a financial adviser submitted a Misconduct Report under the Cancelled Notice (which is in the form set out at Appendix 1 of that Notice) before 1 January 2027; (b) any case for which a financial adviser was required under the Cancelled Notice to submit a Misconduct Report (which is in the form set out at Appendix 1 of that Notice) by 31 December 2026, save that a reference in the Cancelled Notice to “MASNET” is to MASNET or any electronic system which may be established by the Authority in place of MASNET. Note: Under section 67(5) of the Act, any person who fails to comply with any requirement specified in a written direction issued under section 67(1) of the Act 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 of a day during which the offence continues after conviction.

Annex A Guidelines on the Conduct of Internal Investigations 1 A financial adviser is expected to conduct internal investigations once it suspects that a misconduct was or has been committed by a representative or former representative. The investigation process should take into account any appeals submitted by the representative or former representative in relation to the alleged misconduct and also incorporate relevant sources of information including the following, where applicable: (a) interviews with relevant parties, such as clients, representatives or former representatives, and their supervisors or former supervisors; (b) transactions, sales documents, post-sale surveys, call-backs to clients, and correspondence between the representative and the client. 2 The guidelines in this Annex are issued pursuant to section 74(1) of the Financial Advisers Act 2001 (“the Act”) and provide guidance to financial advisers on the conduct of internal investigations into misconduct mentioned in MAS Notice FAA-N27 (“the Notice”). The expressions used in these guidelines have the same meanings as in the Notice. These guidelines should be read in conjunction with the provisions of the Act, the subsidiary legislation made thereunder, and other relevant legislation, notices, codes, guidelines and Frequently Asked Questions issued by the Authority. Any failure to comply with the guidelines set out in this Annex does not of itself render a financial adviser liable to criminal proceedings.

Annex B Guidelines on Corrective Action 1 A financial adviser is responsible for the conduct of its representatives. It should take appropriate corrective action including such action against its representatives or former representatives for any misconduct committed by them in relation to the provision of any financial advisory service and ensure consistency in its application of corrective action. 2 If the financial adviser has reasonable grounds to believe that the misconduct committed was attributable to inadequate or improper supervision, it should take appropriate corrective action against the supervisors or former supervisors in the representative or former representative’s supervisory chain of command. 3 The type of corrective action that a financial adviser may take against its representatives, former representatives, supervisors or former supervisors in respect of any misconduct committed depends on the severity of the case and includes, but is not limited to, any one or more of the following: (a) suspension from providing any financial advisory service; (b) restitution of misappropriated monies; (c) fine; (d) warning; (e) demotion; (f) termination of the representative’s employment or arrangement with the financial adviser; (g) clawback; (h) impact on balanced scorecard grade5 ; 5 Refers to balanced scorecard grade as defined in FAA-N20 Notice on Requirements for the Remuneration Framework for Representatives and Supervisors (“Balanced Scorecard Framework”) and Independent Sales Audit Unit.

(i) re-training; (j) enhanced supervision and monitoring. 4 A financial adviser should have an internal process for addressing the appeals against any corrective action. 5 A financial adviser should have an internal process to identify the root cause of the misconduct and implement appropriate remedial measures that include, but are not limited to, improvement of controls, systems and processes to address the weaknesses identified which led to the misconduct. 6 The guidelines in this Annex are issued pursuant to section 74(1) of the Financial Advisers Act 2001 (“the Act”) and provide guidance to financial advisers on the taking of corrective action for misconduct mentioned in MAS Notice FAA-N27 (“the Notice”). The expressions used in these guidelines have the same meanings as in the Notice. These guidelines should be read in conjunction with the provisions of the Act, the subsidiary legislation made thereunder, and other relevant legislation, notices, codes, guidelines and Frequently Asked Questions issued by the Authority. Any failure to comply with the guidelines set out in this Annex does not of itself render a financial adviser liable to criminal proceedings.