CMS licence application

According to MAS (Pages)
last revised on 7 Oct 2021

If your company is applying for a CMS licence, your company should submit Form 1 under the Securities and Futures (Licensing and Conduct of Business) Regulations (SF(LCB)R). If your company already holds a CMS licence for certain regulated activities and wishes to add another activity to the CMS licence, you should submit Form 5 under the SF(LCB)R.

In addition, if you hire or appoint individuals to conduct a regulated activity under your licence, you have to appoint these individuals as an appointed or provisional representative for that regulated activity. You can refer to the page Appointing a Representative for CMS Licensees or Exempt Financial Institutions for more information.

"The procedure to apply for both CMS and FA licenses

1. Complete all application forms and submit to MAS, along with supporting documents
2. Payment of fee during application process
3. Successful applicants will receive their CMS license or CMS Representative’s License and Annual License Fee Advice – the license is valid for 3 years."

Source: Paul Hype Page & Co, last revised on 29 Sep 2021

According to MAS (Pages)

When assessing an application to be an RFMC, LFMC or VCFM, MAS takes into account factors such as:

• Fitness and propriety of the applicant, its shareholders and directors.
• Track record and fund management expertise of the applicant and its parent company or major shareholders.
• Ability to meet the minimum financial requirements prescribed under the SFA.
• Strength of internal risk management and compliance systems.
• Business model/ plans and projections and the associated risks.

The company will need to appoint the following individuals:
- Minimum of 2 directors, at least one is resident in Singapore;
- Chief Executive Officer with least 10 years of relevant experience and is resident in Singapore;
- Minimum of 2 full-time Singapore-based individuals for each regulated activity (except REIT management). Such individuals are required to be appointed as representatives under the SFA.

Other requirements: 

• Application must be for a corporation and its primary business activity must be one of the regulated activities specified in the Second Schedule to the Securities and Futures Act.
• Evidence of a positive track record, management skills, and financial soundness over the preceding five years. This also applies to any parent company of major shareholders.
• Have business plans and future projections in place.
• Adequate internal compliance systems.
• Ability to satisfy the minimum financial requirements which are listed in the Securities and Futures Act.
• Personal status of the applicant as well as those of employees, officers, and substantial shareholders.
• Approval from Monetary Authority of Singapore (MAS) to hire a CEO or Director who is a Singaporean resident.
• At least two full-time employees in each of the regulated activities for which the corporation is seeking a license. Each of these employees will also need to hold a Representative’s License for the activities as required by the Securities and Futures Act.
• If the applicant is applying for the license in order to deal in securities or trade in futures contracts, the applicant must have cumulative shareholders’ funds of S$200 million for securities dealing, and S$100 million for futures contract trading.
• If the applicant is applying for the license in order to engage in fund management, the applicant must have at least S$1 billion worth of global funds under management.
• If the applicant is applying for the license in order to engage in fund management or the advising on corporate finance matters of both, the Monetary Authority of Singapore (MAS) may decide to impose a license condition – one that specifies that the applicant has to purchase a Professional Indemnity Insurance policy and is in compliance with the basic requirements as stated by MAS.
• If the applicant is applying for a license in order to engage in fund management or advising on corporate finance matters of both, the Monetary Authority of Singapore (MAS) may decide to impose a license condition – one that specifies that the applicant has to purchase a Professional Indemnity Insurance policy and is in compliance with the basic requirements as stated by MAS."

Source: Paul Hype Page & Co, last revised on 29 Sep 2021

Persons who are exempted under Paragraph 2(1) of the Second Schedule, Securities and Futures (Licensing and Conduct of Business) Regulations

Persons who are exempted under Paragraph 2(1) of the Second Schedule, Securities and Futures (Licensing and Conduct of Business) Regulations, including but not limited to the following:
a. A person when carrying on business in dealing in such capital markets products for his own account, or an account belonging to and maintained wholly for the benefit of a related corporation, and with or through certain specified types of entities;
b. A person whose dealing in such capital markets products is solely incidental to his carrying on business in fund management, providing custodial services, or product financing; and
c. A licensed or exempted financial adviser, when dealing in such capital markets products by passing on an order to purchase or sell any specified product on behalf of a customer to whom the financial adviser provides a specified financial advisory service, to an appropriately licensed or exempted person.

Paragraph 2(1) of the Second Schedule, Securities and Futures (Licensing and Conduct of
Business) Regulations

According to MAS (FAQs)
last revised on 11 April 2012

For those holding on to CMS licences, the company is required to apply to MAS to add regulated activities to its CMS licence. The application should be made in prescribed form, which is Form 5 pursuant to Securities and Futures (Licensing and Conduct of Business) Regulations [“SF(LCB)R”], and submitted together with the prescribed application fee. Upon approval, the company shall return its CMS licence to MAS for cancellation, and MAS shall issue a new licence reflecting the new regulated activities to the company. The company shall commence the new regulated activities only after the new licence is issued. The expiry date of the new licence will be the same as that of the old licence.

According to the SFA

82.—(1) Subject to subsection (2) and section 99, no person shall, whether as principal or agent, carry on business in any regulated activity or hold himself out as carrying on such business unless he is the holder of a capital markets services licence for that regulated activity.

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(3) Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.

Yes. MAS Notice SFA 04-N09 sets out the entry, examination and continuing education requirements for representatives, and the obligations of the financial institutions regarding their representatives. 

According to MAS (Notices)
last revised 8 April 2020

This Notice is issued pursuant to section 101 of the Securities and Futures Act (Cap. 289) (the “Act”) to the holders of a capital markets services (“CMS”) licence, exempt financial institutions (“exempt FIs”) and appointed representatives. The earlier Notice (SFA 04-N06) issued on 1 August 2008 on the same subject is cancelled. [SFA 04-N09 (Amendment) 2010] [SFA 04-N09 (Amendment) 2011]

1A This Notice does not apply to venture capital fund managers. [SFA 04-N09 (Amendment) 2017]

2 This Notice sets out the following:

(a) minimum entry requirements for appointed representatives under the Act; [SFA 04-N09 (Amendment) 2010]

(b) application of the Capital Markets and Financial Advisory Services Examination requirements to individuals intending to conduct regulated activities as appointed representatives under the Act; [SFA 04-N09 (Amendment) 2010] [SFA 04-N09 (Amendment) 2018]

(c) circumstances under which the CMFAS Exam requirements do not apply;

(d) obligations of CMS licence holders and exempt FIs; and

(e) continuing professional development for appointed representatives. [SFA 04-N09 (Amendment) 2010] [SFA 04-N09 (Amendment) 2018]