Dealing with unregulated persons
Find out the risks of dealing with unregulated persons for financial products and services, and get tips to 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). MAS’ regulatory framework ensures that only competent and professional persons may provide financial services.
If you choose to deal with unregulated persons (including those based overseas), you will forgo the protection given under MAS’ regulations.
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.
- 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 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 with to check if he or she is on this list.
Check the background of entity and staff
Do all necessary checks before dealing with any person offering financial products and services. Ask about the entity, including its track record and background of the people running the operation. Make it a point to meet with the representatives.
Ask someone you trust to help you with your checks if necessary. Here are some examples:
- Check if the information provided by the entity about itself is true. For example, check their address, business registration number and track record.
- Check if the information (E.g. experience, qualifications) about its owners, directors and management members is true.
- Check if there are any complaints or negative comments about the enity or its related persons in the news or online forums.
Understand what you are buying
Do not get carried away by a good sales pitch or promise of high returns. Ask as many questions as you need to fully understand the investment opportunity. Take your time to establish the facts, review the product and make an informed decision.
If the company is unable to answer or avoids answering any of your questions, be wary. Here are some examples of questions to ask:
- How are the profits generated? Is the return being paid from new in-flows of money or from returns from actual investments? What is the maximum I can lose?
- How long must I stay invested? What happens if I withdraw my money? What are the penalties, restrictions and procedures?
- What are my options for recourse if anything goes wrong?
Even if the enity is able to provide answers, do not be too quick to believe everything you are told. Be sure to check.
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: Investment scam stories