Dealing with unregulated persons

Box investment types

01 Nov 2018 | 3 min. read

Find out how unregulated persons solicit financial products and services, and get tips to deal with them and protect yourself.

Who are unregulated persons?

You are strongly encouraged to deal only with persons who are regulated by the Monetary Authority of Singapore (MAS). You can check the MAS Financial Institutions Directory to confirm if the person is regulated by MAS or not. MAS' regulatory framework ensures that only competent and professional persons may provide financial services. These persons have to disclose information on the recommended investment products.

If you choose to deal with unregulated persons (including those based overseas), you will forgo the protection given under the MAS regulations.

Common sales tactics

There are usually telltale signs to warn you that you may be dealing with an unregulated person. Looking out for these signs could save you from problems later on.

Cold calls and unsolicited emails

A cold call is an unsolicited sales call offering investment products or services. There is seldom any face-to-face meeting. Even if there is, the meeting is usually at a location that is not a proper office. Cold calling by unregulated persons to market financial product and services in Singapore is illegal.

Bogus Internet websites

Beware of investment opportunities you learn about from the Internet or by email. Always check if:

  • The product is registered correctly
  • The persons marketing the product are regulated

High-pressure tactics

Persuasive tactics are used to get you to invest before you have the chance to think about the product or check on the person offering it. Claims of "once-in-a-lifetime opportunity" or a "limited offer" are the usual tactics.

Smooth-talking sales reps

Sales representatives often claim to have inside information that will generate a windfall by investing with them. Beware of promises of high returns, "guaranteed" profits and quick gains.

See also: How to spot an investment scam

Protect yourself

Before you invest any money, do your due diligence:

Deal only with regulated persons

To protect your interest, deal only with representatives listed on MAS Register of Representatives. If the caller insists that he is authorised to operate in Singapore, ask for proof and check with the following sources:

Financial Institution Directory

  • Check to see if the person or company he represents is regulated by MAS to operate in Singapore.
  • After you have found the entity in the Directory, check what activities it is authorised to conduct in Singapore. MAS only regulates persons with a presence in Singapore.

Investor Alert List

  • This is a list of unregulated persons (here and overseas) who, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS.
  • This list is not exhaustive.

MAS Register of Representatives

  • This list consists of names of representatives appointed by the financial institutions (banks, insurers, holders of capital markets services licenses or licensed financial advisers).
  • You will need the representative number of the person you are dealing to check if he or she is on this list.

Find out about the firm and staff

Do all necessary checks before dealing with any person offering financial products and services. Ask about the firm, its track record and background of the people running the operation. Make it a point to meet with the representatives.

Understand what you are buying

Do not get carried away by a good sales pitch or promise of high returns. Always ask for brochures and documents to be sent to you. Take your time to establish the facts, review the product and make an informed decision.

Do not sign on blank forms without understanding what you are signing. Never give your NRIC to strangers or without first clarifying why it is needed.

Ensure the investment fits your financial goals

You should not make a hasty decision when it comes to investments. Before you make an investment, consider if it matches your financial goals, risk profile and personal circumstances.

All investments have an element of risk, and a higher return is almost always accompanied by higher risks.

Learn more: Boiler room and other investment scams

Last updated on 06 Nov 2018