SAS Reply to Editorial Report

The Editor, The Business Times

The Securities Association of Singapore (SAS) would like to respond to your editorial “Trading representatives deserve better” dated June 19, 2013.

Under the current Monetary Authority of Singapore regulations, trading representatives (TRs) who have not passed the Capital Markets and Financial Advisory Services Module 6A exam by July 1, 2013, are to confine their dealing and financial advisory activities to only Excluded Investment Products (EIPs).

Financial products are getting more complex. It is widely recognized that it is important that TRs raise their professional knowledge to better serve their clients. Globally financial professionals are up-skilling and Singapore is no exemption.

With respect to the SIP regime, TRs are given more than a year to prepare themselves for the June 30, 2013 deadline set by the Monetary Authority of Singapore to pass the Module 6A exam. 

SAS member firms have encouraged TRs to pass the exam. To this end, they have assisted tangibly by:-

(i) Funding a new preparatory course covering the syllabus of Module 6A

(ii) Co-sponsoring some 3,000 TRs who attended this course since March 2012

For TRs who failed to pass Module 6A or chose to confine their dealings and financial advisor services to EIPs, SAS further assisted by:-

(a) Formulating a uniform industry-wide arrangement to support them with Module 6A house dealers to execute       SIPs trades for their clients

(b) In contrast to allegations that clients are taken away from these TRs, under the industry-wide arrangement, EIP-qualified TRs are able to retain their clients unless their clients opt otherwise.

Trading representatives and clients are the very core of the broking business of our member firms. We are hence disappointed that your editorial could suggest that the welfare of TRs were ignored by SAS members. We wish to correct the erroneous view.

Securities Association of Singapore’s Unified Approach For Customers To Deal In Specified Investment Products

In response to The Monetary Authority of Singapore’s letter to The Straits Times on 15 May 2013 “MAS explains need for exam” and Business Times article “Module 6A: issues still unresolved as deadline nears” on 12 June 2013, the Securities Association of Singapore is pleased to inform customers on the unified solution to be adopted by its members should they wish to deal in Specified Investment Products (SIPs) where their trading representatives have not attempted or passed the Capital Markets and Financial Advisory Services (CMFAS) Module 6A examination from 1 July 2013.

The collective approach is to give SIP-qualified customers the option to decide:-

(a) To self-execute their orders through an electronic platform; and/or

(b) Communicate with a qualified representative who has passed the CMFAS M6A examination to follow up on their SIPs-related dealing needs.

A trading representative must pass the CMFAS M6A examination in order to deal in any SIPs for his or her clients. Examples of SIPs include certain securities, covered warrants, exchange-traded funds or extended settlement contracts.

A representative is not allowed to deal in SIP orders for his or her customers till he/she passes the CMFAS M6A examination. Such representatives (referred to as EIP-Qualified) are confined to dealing in Excluded Investment Products (EIPs) which include corporate shares or stocks and REITs listed on Singapore Exchange or approved foreign exchanges such as HKSE, Bursa Malaysia, NYSE or LSE etc.

Where the customer is presently serviced by an EIP-Qualified representative, the customer will be duly informed. If the customer still wishes assistance, he/she will be redirected to a qualified representative to handle his/her SIP dealing and dealing-related needs or be given contact particulars of the designated qualified representative for the customer to call directly.