MAS relaxes some rules on provision of robo advisory services

The Monetary Authority of Singapore has released a public consultation paper on proposals to facilitate the provision of robo advisory services in Singapore.
The Monetary Authority of Singapore has released a public consultation paper on proposals to facilitate the provision of robo advisory services in Singapore. ST PHOTO: KUA CHEE SIONG

SINGAPORE - The Monetary Authority of Singapore (MAS) released on Wednesday (June 7) a public consultation paper on proposals to facilitate the provision of robo advisory services in Singapore.

At least two firms - Autowealth and Stashaway/AWP - have already been approved in recent months to offer such services.

Financial institutions currently regulated under the Securities and Futures Act (SFA) and Financial Services Act (FAA) can already provide robo advisory services, and some, including OCBC Bank and UBS, have started to do so.

MAS has also received indications of interest from new entities intending to offer robo advisory services to retail investors.

To make it easier for such entities to operate in Singapore, MAS intends to refine licensing and business conduct requirements.

First, digital advisers that operate as fund managers under the SFA will be allowed to offer their services to retail investors even if they do not meet the track record requirement, provided they meet certain safeguards.

These safeguards include offering diversified portfolios of non-complex assets and having key management staff with relevant experience in fund management and technology. They are also required to undertake an independent audit of their robo advisory business within a year of operation.

Robo advisers that operate as financial advisers under the FAA will be allowed to assist clients to execute their investment transactions and rebalance their clients' investment portfolios in collective investment schemes without the need for an additional licence under the SFA.