Singapore: consultation on regulations for the provision of digital advisory services

In line with its recognition of the rapid expansion of, and new products within, the FinTech sphere, the Monetary Authority of Singapore (MAS) issued a consultation paper on 7 June 2017 on the provision of digital advisory services (i.e. advice on investment products using automated, algorithm-based tools, also known as “robo-advisory services”). The consultation closed on 7 July 2017.

In examining the current regulatory regime, the MAS has noted that while the existing licensing and business conduct rules under the Securities and Futures Act (SFA) and the Financial Advisers Act (FAA) are able to accommodate the provision of digital advisory services, the legislation needs to be reviewed to ensure that the safeguards remain relevant. In particular, the MAS highlighted that providers of digital advisory services would need to put in place adequate safeguards in order to manage the new technology risks associated with the algorithms and the online tools that such providers rely upon. The MAS also considered that the exemptions regime under both the SFA and the FAA could be reviewed in order to facilitate the development of the provision of digital advisory services.

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Herbert Smith Freehills LLP is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.

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