CMFAS RES5 FAA & FA Regulations question: cannot re-enter the financial advisory industry

CMFAS RES5FAA & FA Regulations

A former representative has been convicted of cheating. MAS wants to ensure he cannot re-enter the financial advisory industry in any capacity — including as a director or substantial shareholder of any FA. The most appropriate tool is:

A A reprimand under s125, published on the MAS website to warn the public and the rest of the industry
B An offer to compound his offence under s117, with a composition sum paid to MAS within 14 days
C A prohibition order under s68, barring him from FA services and from managing, directing or substantially owning an FA
D A civil penalty order requiring him to pay the affected client three times the loss he caused

Show the answer and explanation

Answer: C. A prohibition order under s68, barring him from FA services and from managing, directing or substantially owning an FA

A prohibition order (s68) is designed to keep unfit persons out of the industry: it can bar a person (permanently or for a period) from providing FA services and from taking part in the management of, acting as a director of, or being a substantial shareholder of a licensed or exempt FA. It is reserved for serious cases such as this conviction.

Common mistake

A reprimand, a composition or a civil penalty will not shut a person out of the industry — only a prohibition order reaches management/shareholding roles.

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Related CMFAS RES5 questions

A client with net personal assets of S$1.6 million, net financial assets of S$0.6 million and income of S$200,000 in the past 12 months asks to be treated as an 'accredited investor'. Under Section 4A of the SFA (as applied in the FAA framework), he An FA receives volume-linked commissions from a single insurer and can only recommend that insurer's products, yet markets itself to consumers as an 'independent financial adviser'. Under FAR Regulation 21, this is A principal lodges a representative-notification return with MAS that it knows contains false particulars. Which FAA offence is most directly engaged?

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Original study material mapped to the public CMFAS RES5 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.