Consultation Paper on Enhancing Safeguards for Proper Conduct of Prospecting Activities at Public Places and Telemarketing

In view of continuing issues observed by the Monetary Authority of Singapore (MAS) as regards the conduct of supervised „institutions“ when conducting public prospecting activities (PPAs), MAS has launched a new consultation in this context. Specifically, MAS seeks to enhance the requirements of financial advisers, brokers, investment firms, certain fund managers, banks, and insurance companies (briefly called „Financial Institutions or FIs“) to ensure that they are conducting such marketing activities in a professional manner that protect clients from unwanted solicitations. Additionally, MAS seeks to apply similar rules for „telemarketing“ activities.
##### Therefore, MAS proposes to
(1) issue a notice on the current Guidelines on Standards of Conduct for Marketing and Distribution Activities by Financial Institutions to make the requirements set out in the guidelines mandatory for all financial institutions and their representatives (financial advisers). The guidelines set out „the roles and responsibilities of Board and senior management, and safeguards that FIs should put in place to address market conduct risks when marketing financial products and services to retail customers at retailers and public places“ (e.g. good compliance records of representatives, adequate remuneration to ensure no harassment of clients takes place, a reasonable level of training).
(2) revise the above noted guidelines to adopt additional safeguards such as:
– the presentation and disclosure of the fact that the activity is for marketing purposes PRIOR to the commencement of any activity (presentation of motive);
– obtaining consent from customers on such marketing activity either in written or oral form also PRIOR to the commencement of any activity (prior consent);
– prohibiting firms to conclude any contracts on financial products and services at PPAs, unless certain conditions are met (e.g. the customer explicitly requested such sale);
– allowing customers to opt out from any contracts initiated at PPAs for an adequate period of time (MAS seeks comments on what would be considered an „adequate period of time“);
– prohibiting firms to use gift offers to induce customers to purchase financial products and services;
– prohibiting firms to conduct PPAs on private premises and requiring some minimum standards as regards the place of the PPA;
– requiring firms to establish a feedback channel for customers solicited at PPAs; or
– requiring firms to designate a „responsible person“ for such marketing activities to ensure adequate monitoring of practices and conduct.
(3) issue a new notice / notices to require telemarketing activities which refer to „prospecting and marketing financial products and services to customers over the telephone“ to adhere to the following key safeguards:
– requiring firms to disclose upfront their intention to sell a product or service and get customers‘ consent on such activity; and
– prohibiting firms to use gift offers to induce customers to purchase financial products and services.
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The proposed measures would apply to banking products, insurance products, and investment products. The comment period will be open up to June 30, 2023.