Martin Lee @ Sg
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Representative Notification Framework Error

Back in November 2010, MAS launched the Representative Notification Framework (RNF).

Under the framework, financial institutions (FIs) will have to notify MAS when they intend to appoint a representative to provide financial advisory or capital markets services under the Financial Advisers Act (FAA) and the Securities and Futures Act (SFA). The old system of issuing individual hardcopy licenses to individuals was done away with.

FIs also need to ensure that their representatives are fit and proper and meet the competency, financial soundness, and integrity standards required under the SFA and FAA and spelled out in MAS’ Fit and Proper Guidelines.

An online Register of Representatives was put up on MAS’ website to allow the public to check whether particular persons are authorised representatives, the regulated activities which the representatives are allowed to conduct, the FIs they act for, and any suspensions, revocations and prohibition orders issued against them by MAS.

The system has not got off to a good start. Apparently, errors in the registration process by HSBC, OCBC, CIMB and Prudential Assurance have lead to their omissions in the data captured.

In Prudential’s case, it left out the activity of ‘providing financial advice’ in the range of services its representatives can provide. So technically, their agents were not authorized to go around giving advice during the period of the mistake.

It baffles me how such a widespread error can go undetected during the registration process. Surely, the process has to be tightened up otherwise people will lose confidence in the register.

Also, for now you can only search the database if you know the unique representative number of the person you are checking on. I think a better way of increasing transparency is to allow the public to browse the database and search by name/company.

So is this new framework better?

To me, all these are just systems that helps MAS in regulating the financial industry. At the end of the day, the proof is really in the pudding – whether the representatives are giving the correct advice. That is the bottomline that really matters to all the clients.

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