Outline
The financial services industry has shifted and repositioned itself over the last few years. Spurred by the pandemic, the industry has seen a rise in digitalization efforts to maintain the relationships between the company, employees, and customers. To operate in the financial services industry in Singapore, a company must obtain the necessary licenses.
Types of Financial Service Licenses in Singapore
Setting up a company offering financial services, especially in FinTech, in Singapore could be a strategic move. Ranked 2nd in growth by industry in Singapore by the Ministry of Trade, the finance and insurance industry is expected to grow 4-5% per annum from 2021 to 2025, according to the Monetary Authority of Singapore (MAS).
To operate a financial service company, you must obtain one of the key financial service licenses in Singapore:
Capital Market Services License in Singapore
Those who conduct activities which are regulated by the Securities and Futures Act must apply for a Capital Markets Services License, unless exempted. These activities include:
The CMS License in Singapore can only be applied by corporations. If an individual intends to act as a representative of the CMS License holder in conducting any of the above activities, the individual will need to acquire the related CMS Representative’s License, unless there is an exemption.
Financial Adviser’s License in Singapore
Those who conduct activities that are regulated by the Financial Advisers Act must apply for the Singapore Financial Adviser’s License. These activities include:
The Financial Services Act in Singapore does not regulate the following areas:
Similar to the CMS license, only corporations can apply for the FA license and individuals acting as a representative of the FA license holder will need to acquire the FA Representative’s License, unless exempted.
Exempted Entities for CMS & FA Licenses in Singapore
There are some entities who do not apply for such licenses. The list includes the following:
| Capital Market Service License | Financial Adviser’s License |
|---|---|
| Banks, merchant banks, finance companies, and insurance companies – these entities are already regulated by the Monetary Authority of Singapore (MAS) under a separate legislation | Banks, merchant banks, finance companies, and insurance companies – these entities are already regulated by the Monetary Authority of Singapore (MAS) under a separate legislation |
| Individuals who are acting on behalf of an exempt person | Individuals who are acting on behalf of an exempt person |
| Individuals who are acting on behalf of CMS license holders who are engaged in custodial services for securities or securities financing | Individuals who are Singaporean residents and act (directly or indirectly) as financial advisers who give advice on investment products excluding life insurance policies to no more than 30 accredited investors on any occasion. An accredited investor is an individual whose income over the preceding 12 months is either S$300,000 or whose net personal assets exceed S$2 million, a corporation with a net asset amount that exceeds S$10 million, or a trustee of a trust. |
| Individuals who are employees of banks or merchant banks and who are registered as associate persons of the Singapore Exchange Derivatives Trading Ltd. |
Eligibility Criteria for Financial Services Licenses Application in Singapore
As with every business license, there is a set of eligibility criteria that you must fulfil before applying for them. The requirements for CMS and FA licenses are listed below.
Procedure for Applying the Financial Service Licenses in Singapore
The procedure to apply for both CMS and FA licenses is as follows.
- Complete all application forms and submit them to MAS, along with supporting documents
- Payment of fee during the application process
- Successful applicants will receive their CMS license or CMS Representative’s License and Annual License Fee Advice – the license is valid for 3 years.
You must submit the license renewal at least 1 month before it expires.
How the MRA Grant Can Support Your Financial Services Business?
The Market Readiness Assistance (MRA) Grant can be leveraged to ease the costs associated with expanding your financial services company to Singapore. This grant is designed to help businesses enter new markets and could provide support in the following ways:
Regulatory and Licensing Compliance
MRA can subsidize costs for legal and consulting services needed to obtain CMS or FA licenses, ensuring your company adheres to MAS regulations.
Market Entry Strategy
Use MRA funding to conduct market research and strategy development, helping you better understand Singapore’s financial sector and identify niche opportunities within FinTech or advisory services.
Business Setup Assistance
MRA can cover a portion of costs related to company incorporation, office setup, and hiring professional service providers to ensure compliance with Singapore’s business environment.
Brand Development and Marketing
MRA can also support initiatives like branding, advertising, and promotional efforts to establish your company’s presence and attract clients in Singapore’s competitive financial market.
