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 digitalisation efforts to maintain the relationships they have between the company, employees, and customers. In order to start a company in Singapore, business licenses for the financial services industry are required.
What Are the Types of Financial Services Licenses in Singapore
Setting up a company offering financial services, especially in FinTech, in Singapore could be a smart move now. Ranked 2nd in biggest 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 Association of Singapore.
To operate a financial service company, you will need to hold one of the two business licenses:
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 which 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.
|CMS Representative’s License||
|FA’s Representative’s License||
Procedure for Applying the Singapore Financial Licenses
The procedure to apply for both CMS and FA licenses is as follows.
- Complete all application forms and submit to MAS, along with supporting documents
- Payment of fee during 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.
Renewal of the license must be submitted at least 1 month before expiry.
Starting A Company in Singapore
Looking to start your financial service company in Singapore? Don’t be taken aback by the complex business license requirements, we’re here to help!
Some industries do not require any business license. You may check out our Singapore Business License Guide (link to the business license guide) to learn more about the licensing requirements.
The Securities and Futures Act is an act created to regulate activities in the securities and derivatives industry. It also manages the institutions which operate within these industries. It was first enacted in 2001 and most recently revised in 2006.
The Financial Advisers Act is an act created to regulate financial advisers across Singapore. It also regulates the actions of their representatives and supervisors. It was first enacted in 2001 and most recently revised in 2007.