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More Relaxed Rules for Robo-advisory Service Providers in Singapore

Written by: Bridgewest

At the beginning of this month, the Singapore Central Bank released a draft consultation paper through which it proposes the introduction of robo-advisory services for financial companies in Singapore. The proposal comes after two companies have already been authorized by the Monetary Authority of Singapore (MAS) to provide such services. Our company formation specialists in Singapore can assist foreign entrepreneurs who want to open companies in the financial sector.

Singapore companies are allowed to offer robo-advisory services

The current legislation related to the financial industry already provides for Singapore companies to offer robo-advisory services, as two private banks provide this type of service. However, the interest of more financial institutions to integrate these solutions in their packages has increased. Most of the companies are interested in serving retail investors selling their stock on the Singapore Stock Exchange. This is also what determined the MAS to ease the licensing process and the requirements related to the management of such entities. However, if it does pass, the paper provides only for Singapore companies regulated by the Securities and Futures Act and by the Financial Services Act.

You can obtain more information on the licensing requirements under the two laws above from our company registration consultants in Singapore. We can also help you open a company in Singapore in this area of activity.

What would the new regulations imply?

First of all, Singapore investment fund managers offering digital advisory services at this moment will be allowed to provide these services even if they have not reached the track record requirements imposed by the MAS. However, their activities would be related to offering diversified portfolios of non-complex instruments. Once they start offering robo-advisory services, they must also have their businesses audited within the first year of activity.

The second proposal refers to robo-advisers which will be allowed to help clients with the transactions and rebalance of their portfolios related to collective investment funds without applying for an additional license.

For full information on regulations related to obtaining a financial license in the city-state and if you want help to open a company in Singapore, please feel free to contact our Singapore company formation agents.

 

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