Background

MAS issued a circular on 24 August 2026 on the FAQs on the Misconduct Reporting Requirements under the Financial Advisers Act 2001 (“FAA”), Insurance Act 1966 (“IA”) and Securities and Futures Act 2001 (“SFA”) last revised on 30 December 2025. The new FAQs include relevant misconducts for Representatives and broking staff, timeline for reporting, and replacement of the existing misconduct reporting system (“MRS”).  

MAS’ Expectations

1. Reportable misconduct: The FAQs set out a list of non-exhaustive examples, on reportable misconduct, where the FIs need to assess based on the following principles:  
   • Actual and potential detriment to the client or customer (henceforth collectively referred to as “client”) and/or the FI;
   • Actual and potential number of clients impacted; 
   • Wilfulness of the Representative or Broking Staff; 
   • Sufficiency of care and diligence exercised; and 
   • Impact to the financial industry’s reputation, integrity and interest. 
      
     
2. Fit & Proper: FIs are obligated to continually assess and certify that their Representatives and Broking Staff continue to meet the fit-and-proper standards for conducting regulated activities. 
    
   
3. Unsubstantiated Misconduct: FIs do not need to submit misconduct reports for misconduct that are not substantiated. However, for any Investigation Report linked to a Misconduct Report, FIs must disclose all misconduct allegations examined, regardless of whether they were ultimately substantiated or unsubstantiated. 
   
   
4. Timeline: MAS requires FIs to submit a Misconduct Report within 21 calendar days of first having reasonable grounds to believe misconduct occurred but expects that such grounds be established through a robust, fair, and holistic investigation — including interviews, document reviews, and due consideration of the staff member’s submissions and appeals. Accordingly, FIs should complete their full investigation prior to submitting the report to MAS. 
   
   
5. Annual Declaration: FIs are no longer required to submit to MAS a declaration of nil return of misconduct. 
   
   

What’s Next?

From 1 January 2027, the current MRS will be replaced by a new system, and access to the old system will no longer be available. FIs should therefore download and save copies of their existing submissions beforehand, though they are already encouraged to retain copies of their misconduct reports upon submission as a matter of good record-keeping practice. FIs should also look out for the new templates of Misconduct Reporting and update the relevant misconduct and investigation procedures.  

How Can We Help?

Capital Governance can assist asset FIs in:  

1. Conducting gap analysis of the current misconduct procedures and updating to the latest requirements.
   
   
2. Assisting in conduct of investigation and responses to MAS queries on misconduct reported.  
   

And more …