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MAS Proposes New Legal Framework for Robo-advisory Services

Written by: Bridgewest

MAS-proposes-new-legal-framework-for-robo-advisory-servicesA while back, the Monetary Authority of Singapore (MAS) which is also the city-state’s National Bank, had announced an easier process related to the registration of fund managers under the Securities and Futures Law. Now, these registration procedures will include digital advertisers who will be allowed to set up robo-advisors in order to offer their services. Our lawyers in Singapore can offer more information on the Securities and Futures Act in its new form.

Who will provide the robo-advisory services in Singapore?

This is the first time when the MAS proposes the introduction of digital and robo-advisers with the purpose of operating as fund managers. The measure comes as the capital markets in Singapore has developed and the number of retail investors selling shares on the Singapore Stock Exchange (SGX) has increased considerably.

The MAS’ proposal will help both investors seeking to have their questions answered as soon as possible, but will also make it possible for Singapore companies offering digital advisory services to enter a new era in which the innovative financial services plays a very important role.

Even if at this moment, financial companies authorized by MAS under the Financial Services Law can integrate robo-advisory solutions in their services, this is a proposal which was put for public debate by the National Bank.

Our law firm in Singapore can assist foreign investors interested in setting up a business in the financial industry in the city-state.

What are the suggestions of the Singapore National Bank?

At this moment, Singapore companies offering digital advisory services are limited in their operations, however the new proposal targets for these companies to receive a financial license which will allow them to make investment transactions through brokerage companies on behalf of their clients. They would also be allowed to re-balance portfolios related to collective investment funds without further licensing from the MAS.

The key requirement related to offering robo-advisory services, however, will be for Singapore companies to have the right management to oversee the compliance requirements related to the quality of the advice offered. The draft document is up for public consultation until the 7th of July.

For assistance in opening a company in the city-state, please contact our Singapore lawyers.



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