MAS conducted a Financial Advisory Industry Review (FAIR) in 2012. One of the objectives of FAIR was to enhance the admission criteria and ongoing requirements for FA applicants and licensees. To ensure a smooth transition for new entrants when the enhanced requirements come into effect, MAS expects all FA License applicants to meet the enhanced requirements (listed below).

• (i) Base capital requirement

  If your company only advises others by issuing or promulgating research analyses or research reports concerning investment products, you are required to maintain a minimum base capital of SGD 250,000. For all other types of financial advisory activities, you are required to maintain a minimum base capital of SGD 500,000, or a lower base capital of SGD 300,000 plus additional professional indemnity insurance of SGD 500,000.

• (ii) Financial resources requirement

  You are required to maintain financial resources that are the higher of:

  • a) ¼ of your relevant annual expenditure of the preceding financial year; or
  • b) 150,000 SGD.
• (iii) Professional indemnity insurance (PII)
  • a) For those advising others by issuing or promulgating research analyses or research reports concerning any investment product only, a PII limit of SGD 500,000 applies;
  • b) For all others:

    You are required to have in force a PII policy with varying limits depending on the type of financial advisory services provided. The breakdown is as follows:

    • i. With revenue not more than SGD 5 million, a PII limit of SGD 1 million applies;
    • ii. With revenue more than SGD 5 million, a PII limit that is the lower of (i) 20% of gross revenue or (ii) SGD 10 million applies.