Background 

On 28 March 2025, Monetary Authority of Singapore (MAS) issued its Response to Feedback on their proposed amendments to enhance the regulatory safeguards in pre- and post-transaction engagements with retail clients, directed at Financial Advisers. These amendments are aimed at improving the quality of financial advice and ensuring that appropriate safeguards are applied to clients who may be more vulnerable to mis-selling. 

The regulatory changes refer to: 

• FAA-N16: Recommendations on Investment Products 

• FAA-N20: Balanced Scorecard (BSC) Framework and Independent Sales Audit Unit 

• FAA-G14: Guidelines on Remuneration, Reference Checks, and Pre-Transaction Checks 

Key Issues and MAS Responses  

• Execution-Related Advice: Transactions based solely on execution-related advice are excluded from the enhanced requirements. Nevertheless, firms must continue to ensure fair dealing outcomes and clear client communication. 

• Selected Clients (SCs): SC classification is to be conducted as part of the Know-Your-Client (KYC) process. MAS emphasised a holistic approach, cautioning against reliance on simple checklists, CKA results, or self-declarations alone. 

• Trusted Individuals (TIs): MAS has permitted flexibility in how consent for TIs is obtained and has removed rigid procedural obligations (e.g., no AML checks required). However, advisers must assess for potential conflicts of interest and ensure the TI can meaningfully support the SC. Written statements should be obtained from the SCs should they decline to have a TI present.  

• Call-Backs: MAS will proceed with a principles-based approach, which can be found in Notice FAA-N16. Firms may design their own question sets, provided they assess the client’s true understanding. Call-backs are not required if a supervisor was present for the full advisory process. 

• Clients of Selected Representatives (SRs): Clients served by representatives flagged for heightened monitoring must be treated with the same level of safeguards as SCs. Internal frameworks to identify SRs must be robust and transparent. 

• Post-Transaction Checks: Where pre-transaction call-backs are independently conducted and adequately documented, firms may treat these as fulfilling post-transaction survey obligations. Infractions without client detriment need not affect BSC grading, though disciplinary frameworks must still apply. 

• Language Requirements: MAS has clarified that there is no mandatory requirement to provide sales documents in a client’s preferred language. Where documents and the advisory process are conducted in a non-English language the client is proficient in, some SC safeguards may be waived. 

Conclusion 

MAS has demonstrated a calibrated and thoughtful regulatory posture, balancing client protection with operational viability. By shifting toward a principles-based regime, MAS continues to place trust in a Financial Adviser’s ability to exercise sound judgement and to deliver fair dealing outcomes, particularly for retail clients who may be less financially sophisticated. 

The expectation is clear: firms must go beyond formalistic compliance and focus on substantive client understanding and suitability. This includes stronger documentation, enhanced oversight of higher-risk representatives, and improved client engagement practices throughout the advisory lifecycle. 

 

What’s Next 

The revised requirements will take effect from 29 December 2025, with a nine-month transition period to facilitate implementation. 

Management of Financial Advisers should:  

• Reviewing their advisory processes, internal frameworks for SC classification, TI protocols, and call-back procedures 

• Align internal practices to both the letter and the intent of the revised regulations. 

• Review KYC documentation to include necessary statements with regards to SC and TI 

And more… 

 

How We Can Help 

We support Financial Advisers in preparing for these changes by providing: 

• Advisory on the implementation of client classification frameworks 

• Review and redesign of pre-transaction and call-back workflows 

• Development of documentation templates aligned with MAS expectations 

• Staff training programmes for representatives, supervisors, and compliance teams
   

Contact us today to discuss how we can support your implementation strategy and compliance obligations. Find out more here