The proposals were sparked after the MAS found an increased interest from new entities intending to offer digital advisory services.

The Monetary Authority of Singapore has proposed to ease restrictions of digital advisory services. The proposals were released on a consultation paper to be discussed by the public, which will end on 7 July 2017.

The proposals made by the MAS will seek to support innovation in the financial services sector by recognising the unique characteristics of digital platforms, the regulator and central bank said yesterday in a statement.

If the plans are given the green light, the availability of digital advisory services could widen investor choice to low-cost investment advice.

​According to the MAS, financial institutions currently regulated under the Securities and Futures Act and the Financial Advisers Act can provide digital advisory services, and some firms have already started to do so. The MAS intends to refine the licensing and business conduct requirements to make it easier for entities offering digital advisory services to operate in Singapore.

Singapore has made a priority of pushing digital innovation in private banking and wealth management in recent years. As an example, when Credit Suisse, Switzerland's second-largest bank, rolled out its private banking mobile platform about two years ago, it chose the Asian city-state as the first place to do so. DBS, the Singapore-headquartered group, have made digital strategy central to its overall business plans.

Among the MAS proposals are:

- Digital advisors that operate as fund managers under the SFA will be allowed to offer its services to retail investors even if they do not meet the track record requirement. However this is provided they meet certain safeguards; which include offering diversified portfolios of non-complex assets, having key staff with collective experience in fund management and undertaking an independent auit of the digital advisory business within one year of operations; 
- Digital advisors that operate as financial advisors under the FAA will be allowed to assist their clients to execute investment transactions and re-balance its clients’ investment portfolios in collective investment schemes without the need for an additional licence under the SFA; and 
- Digital advisors can seek exemption from the FAA requirement to collect the full suite of information on the financial circumstances of a client, if it can mitigate the risks of providing inadequate advice based on limited client information.

The proposals were sparked by the increased interest from new entities intending to offer digital advisory services to retail investors.

Singapore has signed a number of cross-border deals with other jurisdictions to foster fintech developments, such as with the UK and South Korea. (See here.)

To see the MAS consultation and provide responses, click on this link.