In Singapore, financial institutions (FIs) market their financial products and services in public venues. For example, some conduct roadshows in shopping mall atriums, at bus interchanges or in MRT stations.
Singapore’s market regulator noted increasing interest from FIs to enter into arrangements with retailers, such as those selling consumer goods and groceries, to market and sell their financial products and services on the premises of these retailers.
Although FIs could find selling to the public through retail channels effective, the practice may give rise to market conduct issues, the MAS said.
Therefore, the regulator is calling for financial institutions to notify the MAS in advance of any plans to conduct sales and marketing efforts through retailers or in public places.
FIs will also need to submit a periodic report to the regulator about such marketing programs, the MAS said in its consultation paper, which is open for public comments until 24 August.
“These proposals seek to strike a balance between allowing FIs flexibility with their marketing and distribution activities, while safeguarding consumers’ interests when they purchase financial products at retailers and public places,” said Lee Boon Ngiap, assistant managing director for the capital markets division.
Call back
The MAS is also proposing that financial institutions call back all customers who bought financial products to ensure they have understood the transactions. The rule would apply to the sale of life, general and accident and health insurance products, as well as collective investment schemes [mutual funds], said the MAS.
Entities such as financial advisers, banks, non-bank credit card issuers, holders of a capital markets services license, insurance companies and their intermediaries would need to comply with the proposed rules.
FIs will also be required to maintain a register about such marketing activities, separately track and monitor consumer complaints and report complaint statistics to senior management on a regular basis.
The MAS exempted from the proposed rules “closed-door” events such as a seminar organised in an auditorium by invitation or subject to registration, or a workplace seminar specifically conducted for employees of an organisation.
With an increase in public marketing drives, there is the possibility that consumers could be harassed or enticed with gifts to purchase financial products or services that are not suitable for them. Also, there could be mishandling of cash and cheque payments, which could expose a financial institution to possible losses or fraud, the MAS noted in its consultation.
Most financial institutions already have controls in place for their marketing and distribution activities at retailers and public places, and MAS believes the proposed guidelines complement existing rules.
