BY EMAIL ONLY

BY EMAIL ONLY

Members' Undertaking No. 76

8 January 2020

Re-issued: 13 May 2020

To: All Ordinary and Associate Members

[RE-ISSUED] MU 76/20 - PAYMENT OF INCENTIVES TO FINANCIAL ADVISORY FIRMS BY INSURERS

ACTION:

1. FOR COMPLIANCE OF INSURERS THAT PARTNER WITH FINANCIAL ADVISORY (FA) FIRMS

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This Undertaking takes effect for existing and new business from 1 February 2020 or earlier,

if any member is able to do so.

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Members should inform their respective MAS officer-in-charge when they have done so.

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Members will be further advised by LIA regarding full compliance ¡°by no later than

date/month/year¡±.

2. Following the issuance of this MU on 8 January 2020, MAS received queries from LIA members

and responded to them individually. For the benefit of all members, MAS has prepared a set of

frequently asked questions (FAQs), as attached: FAQ for LIA MU 7620.pdf

MAS will be sharing the FAQs with the LFAs to align the FA industry¡¯s understanding of the MU

with MAS¡¯s expectations.

If LIA members have any further queries, please reach out to their respective MAS officers-incharge.

3. FOR OTHER MEMBERS¡¯ INFORMATION

1. LIA recognises that insurers offer volume based incentives1 to licensed financial advisers (LFA

firms) that represent them. LIA members commit to do the following:

a) Any volume based incentives offered by insurers will be given to the LFA firm to structure

the incentive for the LFA firm¡¯s own representatives.

b) No incentive structure will be communicated directly by the insurer to the individual

representatives of the LFA firm.

c) No incentives will be paid directly by the insurer to the individual representatives of the LFA

firm.

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Volume-based incentives refer to monetary and/or non-monetary remuneration that are provided to the LFA firms

and/or the LFA firms¡¯ representatives and are tied to the sales volume of investment products (as defined under the

Financial Advisers Act).

LIA SECRETARIAT

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