1

Mone
Monetary Authority of Singapore

SECURITIES
URITIES AND FUTURES ACT
T
(CAP. 289)
NOTICE ON M
MINIMUM ENTRY AND EXAMINATIONON
REQUIREMENTS
EMENTS FOR REPRESENTATIVES OF HOLDERS
DERS
OF CAPITAL MARKETS SERVICES LICENCE AN
ND
EXEMPT FINANCIAL INSTITUTIONS

FREQ
QUENTLY ASKED QUESTIONS
(Updated in May 2012)

Disclaimer: The FAQs Qs are meant to provide guidance to the industry

on MAS' policy and administration of the Securities and Futures Act
and regulations. They do not constitute legal advice. MAS expects
industry participantsts to retain their independent legal counsel
c to
advise them on how their business operations should be conducted
nducted in
order to satisfy the llegal/regulatory requirements and to advise
dvise them
on all applicable lawss, rules or regulations of Singapore.
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SECURITIES AND FUTURES ACT (CAP. 289)

NOTICE ON MINIMUM ENTRY AND EXAMINATION
REQUIREMENTS FOR REPRESENTATIVES OF HOLDERS OF
CAPITAL MARKETS SERVICES LICENCE AND EXEMPT
FINANCIAL INSTITUTIONS
FREQUENTLY ASKED QUESTIONS

(A) Minimum Entry Requirements

1. Can the 4 GCE “O” Level be obtained from more than one sitting?
Yes.

2. What is considered equivalent to 4 GCE “O” level credit passes?

The minimum educational qualification requirement for persons
conducting regulated activities under the SFA is 4 GCE “O” level credit
passes. So long as an individual has 4 GCE “O” level credit passes or
higher educational qualifications such as a GCE “A” level certificate,
diploma or degree in any discipline, he would be considered as meeting the
minimum educational requirement. For foreign qualifications, individuals
must possess at least 4 passes in any national examination that is equivalent to
4 GCE “O” level passes.

3. Is a temporary representative as defined under section 99F of the SFA

required to comply with the minimum entry requirement spelled out in this
Notice?
No. A temporary representative is subject to a separate set of requirements as
specified in the Notice on the Entry Requirements of a Provisional or
Temporary Representative (Notice SFA 04-N10).

4. Can persons who do not satisfy the minimum 4 GCE “O” level requirement
conduct a regulated activity under the SFA?
They must have at least 4 GCE “O” level credit passes or its equivalent.
Alternatively, if they have sat for the GCE “O” Level Examination before or
in the year 1980, they must have at least 2 GCE “O” level credit passes and
at least 3 years of relevant and continuous working experience over the past
5 years in respect of the regulated activity to be conducted.
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5. If a person does not have 4 GCE “O” level credit passes but has been
working as a trading clerk with a broking company, can he subsequently
act as a remisier or dealer of the company?
No, unless the person has – (i) sat for the GCE “O” Level Examination before
or in the year 1980 and obtained at least 2 GCE “O” level credit passes; (ii)at
least 3 years of working experience as a trading clerk over the past 5 years;
and (iii) satisfied the examination requirements.

(B) Examination Requirements

1. Some companies require their representatives to pass relevant CMFAS

exams even though these representatives already have certain educational
qualifications (e.g. a degree in finance) and/or relevant work experience.
Are such representatives obliged to meet the requirements imposed by their
principal?

MAS places the onus on principals to satisfy themselves and certify to MAS
that their representatives are fit and proper. The principal has to ensure that
the proposed representatives are fit and proper (including examination
requirement) before appointing them as representatives under the SFA and
FAA. The fit and proper criteria (i.e. integrity, competence and financial
soundness) set out in MAS Guidelines on Fit and Proper Criteria (FSG-G01)
are the minimum standards that representatives are expected to meet.
Principals are encouraged to set standards that are higher than the minimum
standards required by MAS, so as to adequately reflect the integrity,
professionalism and conduct they expect of their representatives. Where a
principal takes the view that the current educational background and/or work
experience of existing or prospective representatives are insufficient, it may
require that these be supplemented by additional educational qualifications,
such as to pass certain CMFAS exams beyond what is strictly required by
MAS. Existing and potential representatives should check directly with the
compliance officer of their principal on the specific fit and proper
requirements expected of them.
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2. Are persons who wish to carry out only leveraged foreign exchange trading
subject to the CMFAS Exam requirements?

Yes, they have to pass Module 1A, 1B, 2A or 2B, and Module 6A (unless
otherwise exempted).

3. For appointed representatives carrying out securities dealing and wish to

expand their activity to include the trading of equity index futures contracts,
which modules should they take?

They must pass Module 2A or 2B, and Module 6A (unless otherwise

exempted) to conduct the additional activities. Module 7 has been replaced by
Module 6A with effect from 1 January 2012.

4. Are persons employed by a bank to deal solely in Singapore Government

securities subject to the CMFAS Exam requirements?

No.

5. Are persons who intend to deal in bonds with accredited investors subject to
the CMFAS Exam requirements?

No. The CMFAS Exam does not apply to them as long as they confine their
regulated activity to bond dealing with accredited investors.

6. Are persons subject to the CMFAS Exam requirem ents if they are
employed by a CMS licensee as proprietary trader with respect to trading
in futures contracts?

No.

7. Do the CMFAS Exam requirements apply to persons employed with an

exempt fund management company to conduct fund management for not
more than 30 qualified investors?

The CMFAS Exam does not apply to such persons. However, if they
subsequently wish to join a CMS licensee or an exempt financial institution
[“exempt FI”] to conduct any regulated activity, they will have to comply
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with the examination requirements.

8. For a person who was previously working in a specialised unit serving

high net worth individuals exempted under section 100(2) of the
Financial Advisers Act [“FAA”], is he required to pass Modules 3, 6
and 6A if he subsequently joins a fund management company that is not
exempted under section 100(2) of the FAA?

Yes, they will have to pass Module 3 and Module 6 or 6A (unless otherwise
exempted).

9. What is the difference between Module 4A and Module 4B?

Module 4A applies to persons who wish to conduct corporate finance advisory

while Module 4B applies to those who confine their corporate finance
advisory to debt securities. Persons who have passed Module 4A will not
have to pass Module 4B. However, persons who have passed Module 4B and
confine their activity to debt securities, will have to pass Module 4A if they
subsequently wish to expand their activity to offer other corporate finance
advisory services such as merger and acquisitions and corporate finance
advice relating to equity.

10. For persons who wish to conduct corporate finance advisory and dealing
in securities in connection with corporate finance advisory, such as
placement and underwriting of IPOs, what modules should they take?

They will have to pass Module 4A to conduct corporate finance advisory. If

they also intend to conduct placement and underwriting activities in relation to
the corporate finance activities of their principal company, they will have to
pass Modules 1B and 6. With effect from 1 January 2012, they also have to
pass Module 6A if they are carrying out placement and underwriting of
securities which are Specified Investment Products.
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11. Would a person who has passed the relevant CMFAS Exams more than 3
years ago, but did not commence any regulated activities, be required to re-
take the CMFAS Exams if he wishes to carry out the relevant regulated
activity now?

Such persons are required to re-take and pass the relevant rules and
regulations module(s) before commencing the activity. They are not required
to re-take the module(s) on product knowledge. However, with effect from 1
January 2012, they have to pass Module 6A if they wish to carry out dealing
in securities (which are Specified Investment Products), trading in futures
contracts or leveraged foreign exchange.

12. For persons who were employed with a CMS licensee/Exempt FI to carry
out regulated activity under the SFA on 1 October 2002, but who left the
company subsequently without completing a non-examinable course by the
stipulated deadline of 30 November 2003, can they take a non-examinable
course now if they wish to re-commence the same regulated activity.

No. They have to pass the relevant rules and regulations module(s) before re-
commencing the activity.

13. For persons employed with a CMS licensee/Exempt FI to carry out

regulated activity under the SFA on 1 October 2002, and who completed
the relevant non-examinable course, but subsequently ceased carrying out
the relevant regulated activity, are they required to re-take the relevant rules
and regulations module(s) if they wish to join a CMS licensee/Exempt FI to
conduct the same activity in the future?
As the completion of the non-examinable course is valid for 3 years following
the cessation of the regulated activity, they will be required to re-take the
relevant rules and regulations module(s) if they intend to re-commence the
relevant regulated activity with a CMS licensee or an exempt FI more than 3
years after the date of their cessation.

14. Will existing representatives conducting additional regulated activities be

“exempted” from passing the CMFAS Exam?

No. They will be treated as new entrants in respect of the new regulated
activities, and must pass the relevant CMFAS Exam before they can
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commence the new regulated activities.

15. For persons employed with a bank in Singapore to conduct corporate

finance advisory activities for 3 continuous years before taking a break of
slightly more than 6 months, are they required to take Module 4A if they
wish to re-commence the same activity again?

They do not need to take Module 4A if they had previously passed Module 4A
or completed a non-examinable course prior to 30 June 2005 on Module 4A
while they were employed with the bank. The passing of Module 4A is valid
for 3 years following their cessation of the regulated activity.

16. If a company holds a CMS licence for fund management, would its
employees who conduct activities such as client servicing, research,
central dealing, business development and marketing be required to be
appointed representatives and be required to pass the CMFAS Exam?

Generally, any employee who carries out activities that are necessary for,
directly connected with or form an integral part of fund management,
including the activities of portfolio management, research, client servicing and
business development, will be required to be an appointed representative to
conduct fund management. The employee will be required to pass the
applicable Modules relevant to fund management (Module 3 and Module 6 or
6A), unless otherwise exempted.

If the company is also licensed for dealing in securities and/or trading in

futures contracts for its central dealing activities, an employee who conducts
central dealing will be required to notify as an appointed representative to
conduct dealing in securities or trading in futures contracts, as may be
applicable. Such employee is required to pass the applicable Modules relevant
to dealing in securities or trading in futures contracts.

An employee who also provides financial advisory services under the FAA
such as marketing of collective investment schemes would be subject to the
relevant examination requirements under the FAA.
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17. For persons who do not have 4 GCE “O” level credit passes but have 3
years of relevant and continuous working experience in the regulated
activities that they wish to conduct, would their 3 years of working
experience qualify them for exemption from having to pass Module 6?
No. The exemption for persons who have 3 years of relevant working
experience does not apply if such persons do not satisfy the minimum
academic qualification i.e. 4 GCE “O” level credit passes.

18. Would a person who has taken some business and finance units as part of
his degree or higher qualification programme be granted exemption from
having to pass Module 6? More specifically, w i l l h i s degree or higher
qualification be accepted as having 'emphasis' on accountancy, actuarial
science, business/business administration/business management/business
studies, capital markets, commerce, economics, finance, financial
engineering, financial planning, or computational finance as required in
Annex 1 or Annex 1A of the Notice?

To qualify for exemption from Module 6, a major in the degree or higher

qualification has to be in the areas mentioned above. Alternatively, a degree or
higher qualification must have more than 50% of its syllabus in the areas
mentioned above.

19. For persons who have passed Module 3, have been exempted from
Modules 6 and 6A, and wish to join a start-up boutique fund manager to
conduct fund management activities, do they have to take any other CMFAS
exam?
No.

20. For persons who wish to be an appointed representative and have queries on
how to seek exemptions from certain modules of the CMFAS Exam, whom
should the person approach?

They should refer to the Notice on Minimum Entry and Examination

Requirements for Representatives of Holders of Capital Markets Services
Licence and Exempt Financial Institutions [Notice SFA 04-N09] for more
details of available exemptions. As a proposed appointed representative must
be supported by a principal, they should discuss with the principal supporting
their appointment on whether any exemption would apply to them.
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21. Would appointed representatives carrying out securities dealing as at

1 January 2012 be required to pass Module 6A before they deal in Specified
Investment Products?
They must pass Module 6A by 30 June 2013 if they deal in securities which
are Specified Investment Products.

22. Would appointed representatives carrying out futures trading or leveraged

foreign exchange trading as at 1 January 2012 be required to pass Module
6A?

They must pass Module 6A by 30 June 2013.

23. Representatives who have been carrying out securities dealing (which
include any Specified Investment Product), futures trading or leveraged
foreign exchange trading have until 30 June 2013 to pass Module 6A. In the
interim, can such representatives still continue carrying out securities
dealing (which include any Specified Investment Product), futures trading
or leveraged foreign exchange trading?

They have until 30 June 2013 to pass Module 6A. In the interim, they will still
be allowed to continue carrying out dealing in securities (which include any
Specified Investment Product), futures trading or leveraged foreign exchange
trading. If they have not passed Module 6A by 30 June 2013, they will only
be allowed to carry out dealing in securities which are Excluded Investment
Products. They are not allowed to carry out dealing in securities where the
securities is any Specified Investment Product, futures trading or leveraged
foreign exchange trading until they pass Module 6A.

24. Would persons carrying on the regulated activity of dealing in securities

which are Specified Investment Products for accredited investors be
required to pass Module 6A?

They are required to pass Module 6A unless meet the criteria as set out in
paragraph 18C of the Notice on Minimum Entry and Examination
Requirements for Holders of Capital Markets Services Licence and Exempt
Financial Institutions [Notice SFA04-N09].
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25. For existing appointed representatives carrying out securities dealing

(which include any Specified Investment Product) or futures trading or
leveraged foreign exchange trading, and who wish to submit a notification
to expand their activities, do they need to pass Module 6A prior to
expanding their activities?

They have to pass Module 6A before they can submit the notification for
securities dealing (which include any Specified Investment Product), futures
trading, or leveraged foreign exchange trading in addition to their current
activity.

26. For existing representatives who are exempted from Module 6 based on
Annex 1A of the Notice, can they be granted exemption from having to pass
Module 6A?

No. They will be exempted from the requirement to pass Module 6A if they
meet the criteria as set out in paragraph 18C of the Notice on Minimum Entry
and Examination Requirements for Holders of Capital Markets Services
Licence and Exempt Financial Institutions [Notice SFA04-N09].

27. For existing appointed representatives carrying out securities dealing

(which include any Specified Investment Product) or futures trading or
leveraged foreign exchange trading, and who wish to leave their current
principal and continue the same regulated activities with another principal
company, are they required to pass Module 6A before submission of their
notification with the new principal?

They have until 30 June 2013 to pass Module 6A. If they move to another
principal company before 30 June 2013 and continue the same regulated
activities, they still have until 30 June 2013 to pass Module 6A. However,
they have to pass Module 6A before submission of their notification with the
new principal, if they wish to add securities dealing (which include any
Specified Investment Product) or futures trading or leveraged foreign
exchange trading to their current activity after 1 January 2012.
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28. IBF has announced that from 1 January 2012, they will discontinue Module
7 of the CMFAS. Can persons who have passed Module 7 before 1 January
2012 still submit their notification to carry out trading in futures contracts or
leveraged foreign exchange trading on and after 1 January 2012?

Yes. If they submit their notification before 1 January 2012, their notification
will be considered. If they submit their application on or after 1 January 2012,
they have to pass the relevant modules of the CMFAS Exam.

29. Will persons who currently possess a qualification listed in Annex 1A

continue to qualify for exemption from Module 6 on and after 1 January
2012?

Yes. They will continue to be exempted from Module 6.

30. Will persons who currently possess a qualification listed in Annex 2A

continue to qualify for exemption from Module 7 on and after 1 January
2012?

As Module 7 is discontinued and replaced with Module 6A on 1 January 2012,

the exemption from Module 7 will only be applicable until 1 January 2012.
They will be exempted from the requirement to pass Module 6A if they meet
the criteria as set out in paragraph 18C of the Notice on Minimum Entry and
Examination Requirements for Holders of Capital Markets Services Licence
and Exempt Financial Institutions [Notice SFA04-N09].

31. For persons who currently possess a qualification listed in Annex 1 or 2, but
the qualification is not listed in Annex 1A or 2A, are they required to pass
Module 6 or 7 respectively on and after 1 January 2012?

They are required to pass Module 6 or 7, unless they possess relevant working
experience as listed in Annex 1A or 2A, or –

(i) they are existing appointed representatives who have been conducting
relevant regulated activities immediately before 19 October 2011 and
continue to conduct such regulated activities on and after 19 October
2011;
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(ii) their principals have lodged with the Authority documents under section
99H of the Act, in relation to their appointments as appointed
representatives before 1 January 2012; or
(iii) there is no break in service of more than 6 months between their last
working experience as representatives conducting relevant regulated
activities and the date of their principal’s lodgment with the Authority
of documents under section 99H of the Act, in relation to their
appointments as appointed representatives.

Module 7 is discontinued and replaced with Module 6A with effect from

1 January 2012. They will be exempted from the requirement to pass Module
6A if they meet the criteria as set out in paragraph 18C of the Notice on
Minimum Entry and Examination Requirements for Holders of Capital Markets
Services Licence and Exempt Financial Institutions [Notice SFA04-N09].

32. Do degrees which include finance-related content qualify for exemption from
M6A?
Only a degree or higher qualification majoring in or with emphasis on finance,
financial engineering or computational finance will qualify for exemption as
stated in paragraph 18C of the Notice on Minimum Entry and Examination
Requirements for Holders of Capital Markets Services Licence and Exempt
Financial Institutions [Notice SFA04-N09]. The exemption list for the new
modules has been kept focused on the finance discipline to effectively raise
minimum standards, in keeping with the intent of enhancing representatives’
knowledge of derivatives and complex products when they advise, market or
deal in Specified Investment Products.

33. If a company sets up a specialised unit which carries out regulated activity in
respect of Excluded Investment Product only, do the representatives within
this specialised unit have to pass Module 6A?

If a company carries out regulated activity in respect of both Excluded

Investment Products and Specified Investment Products, but sets up a
specialised unit within the company which conducts regulated activity in
respect of Excluded Investment Products only, the representatives within this
specialised unit are not required to pass Module 6A subject to the company
putting in place proper controls to ensure that they do not conduct any
regulated activity in respect of Specified Investment Products. These controls
include direct supervision and monitoring that the activities of these
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representatives are confined to Excluded Investment Products. In such cases,

the representatives should inform their customers that they can only deal in
Excluded Investment Products. Nevertheless, the company may set standards
that are higher than the minimum standards required by MAS, so as to reflect
the professionalism and competency they expect of their representatives.