The current Guidelines on Fair Dealing was introduced under the Financial Advisers Act and apply to the marketing and distribution of investment products, and the provision of financial advisory services. The consultation proposes the following:
- Widen the scope of application of the Guidelines to explicitly include all financial institutions (FIs) and the corresponding products and services.
- Incorporate key principles and guidance on the fair treatment of customers at various stages of the product life cycle or provision of service.
- Put in place sound and objective processes to assess applications received for financial products and services – When providing financial products and services, FIs should not accord differential treatment to any individual or groups of individuals unless there are justifications supported by relevant and reliable information or data.
- Designing and manufacturing products and services that are suitable for target customer segments – The Guidelines will apply to product manufacturers, and not just distributors, by including additional expectations (eg. policies and procedures, assess impact to customer, manage risks posed by products or services).
- Delivering products and services to customers as they have been led to expect – The proposed principles to be introduced are (i) Transparency in disclosures, (ii) Consideration of customer interests, and (iii) Accountability and product governance with adequate management oversight.
- Exercising right-of-review clauses judiciously – Put in place governance framework to approve the exercise, provide customers with a waiver of any lock-in mechanisms and fees when switching products, offer alternative arrangements, and provide customers with sufficient advance written notice before the changes take effect.
For the full details, please refer to the MAS website https://www.mas.gov.sg/publications/consultations/2022/consultation-paper-on-revisions-to-guidelines-on-fair-dealing
Disclaimer: The information, views or opinions expressed are provided for general information and should not be relied upon as legal or professional advice.