Background

On 4 December 2025, the Monetary Authority of Singapore issued a thematic review of Financial Institutions’ (FI) recruitment and onboarding training of representatives. It clarifies supervisory expectations and highlights good and poor practices on due diligence, monitoring representatives with adverse information, onboarding training, and outsourcing. This affects all FIs appointing representatives and their assessment of the fit and proper criteria of the representatives.

 

Key Observations

MAS noted several compliance gaps across FIs operations. These include:

• Onboarding due diligence weaknesses: Inadequate assessment of financial soundness, no enquiries or rationale for errors/omissions in declarations, and inconsistent due-diligence standards for certain individuals/groups.
  
  
• Weak conflict-of-interest (COI) assessment: No information on connected persons, insufficient guidance on COI red flags, and failure to pick up COI and associated risks arising from applicants’ external business activities.
  
  
• Flawed handling of Representatives with adverse information: Representatives with adverse information were appointed as supervisors to oversee lower-tier representatives who require enhanced monitoring. Insufficient monitoring measures such as generic baseline monitoring, weak documentation, unsubstantiated basis for lifting enhanced monitoring measures, and repeated extensions without investigating non-compliance.
  
  
• Training: Onboarding training missed key topics, allowed advice before product training completion, exempted experienced hires from necessary training, neglected review of third-party materials, and promoting representatives without sufficient training
  
  
• Hiring of Assistants: Critical due diligence and oversight failures regarding representatives’ assistants include a lack of onboarding checks, no record-keeping, poor supervision without defined tasks or monitoring mechanisms, and inadequate controls over their access to systems and confidential information.
  
  
• Outsourced Activities: Lack of familiarity and oversight of outsourced service provider.
  
  

Regulatory Expectations

MAS emphasised the following measures:

Fit-and-proper and structured recruitment: FIs must appropriately evaluate that appointees are fit and proper and maintain senior management-approved recruitment policies covering rigorous due diligence, explicit eligibility/rejection criteria, and risk-mitigation for adverse-information hires.

Robust framework for adverse-information representatives: FIs should have a framework with enhanced, risk-tailored monitoring measures, clear criteria and timelines for lifting measures, and evaluation of supervisory structures.

Comprehensive training and competency regime: Under Fair Dealing Outcome 3, FIs must ensure representatives and supervisors are trained and assessed before advising or supervising, and must evaluate, review and approve all onboarding training programmes and materials (internal and external).

Controls over hiring assistants and outsourcing: FIs must monitor that assistants do not perform regulated activities, clearly define their tasks, restrict client-data access to need-to-know, and exercise effective oversight, governance and controls over all outsourced onboarding/monitoring/training in line with the Guidelines on Outsourcing (FIs other than banks).

 

What’s Next?

FIs must review their recruitment, monitoring, training, and outsourcing frameworks against MAS’ standards and remediate gaps quickly.
Increase accountability among representatives with adverse information.
Expect more thematic inspections focused on enhanced monitoring quality, COI assessment, and training governance.
Create guidelines for hiring assistants and other outsourced activities.

 

How Can We Help?

Capital Governance assists Financial Institutions by:

• Performing gap analysis against MAS expectations for recruitment, monitoring, training, and outsourcing.
• Redesigning policies, and monitoring frameworks for representatives and assistants.

And more…

Contact Us today to discuss how we can provide the risk and compliance advisory solutions for you.
Find out more here.