FAA-N16 (Amendment) 2025: MAS Compliance Updates for Financial Advisers

The Monetary Authority of Singapore’s Notice on Recommendations on Investment Products was last updated on 29 December 2025. The Notice applies to licensed and exempt financial advisers, as well as their representatives, when recommending investment products to clients. This includes advisory interactions involving individual clients, including accredited investors, and other in-scope clients under the Financial Advisers Act framework.

The Notice contains a few limited exclusions. For instance, it does not apply in certain cases involving non-individual, non-accredited investor clients entering into specified OTC derivatives purely for hedging purposes.

For firms, the immediate focus should be on the FAA-N16 (Amendment) 2025, which introduces additional compliance requirements around client assessment, trusted individual arrangements, supervisory review, pre-transaction checks and retention of records.

Key amendment 1: New “selected client” assessment

A financial adviser must now, as part of the know-your-client process, ascertain whether the client is:

1. under 62;
2. proficient in the language used in the sales and advisory process and documentation, and;
3. has at least GCE ‘O’ or ‘N’ Level qualifications or equivalent.

If at least two of these are answered negatively, the client must be treated as a selected client, unless the adviser has reasons to conclude that the client has adequate knowledge and experience in the relevant class of investment products and limits its recommendation accordingly. The adviser must also document that determination.

Key amendment 2: “Trusted individual” requirement

A major new concept introduced is the trusted individual. For a selected client, the financial adviser must not proceed with the sales and advisory process unless the client either identifies a trusted individual who satisfies the prescribed criteria, or signs a written statement declining to have one present and confirming that he or she is fully able to make decisions without one.

Under the Notice, a trusted individual must be at least 21 years old, be proficient in the language used during the sales and advisory process and the documents, have at least GCE ‘O’ or ‘N’ Level qualifications or equivalent, and be able to communicate effectively with the selected client. The client’s consent to let that trusted individual be privy to his or her personal information must also be documented.

This means firms should review whether their onboarding forms, fact-find templates, advisory scripts and internal SOPs are now sufficient to capture selected-client screening, trusted-individual eligibility, consent wording and written opt-out language.

Key amendment 3: New pre-transaction checks

The 2025 amendment also introduces a more formal Pre-Transaction Check regime. Where a financial adviser executes a transaction in a recommended investment product for a selected client or a client of a selected representative, the adviser must complete a Documentation Review and, unless a supervisor was present throughout the full sales and advisory process, conduct a Call-back before the effective date of the transaction.

Even where the client is neither a selected client nor a client of a selected representative, a Documentation Review is still required before the effective date, unless the firm falls within the specific exception and completes that review within the free-look or cancellation period, or within five business days where no such period exists.

Key amendment 4: More prescriptive call-back controls

The amendment now prescribes what the call-back must cover. It must generally be audio-recorded and include questions designed to ensure that the client understands the basis for the recommendation, the main features, key risks and limitations of the recommended product, and where relevant, the existence of any free-look or cancellation period. For selected clients, the call-back must also verify that the client was given the opportunity to have a trusted individual present, and whether that trusted individual was present or, if not, whether the client declined and was able to decide independently.

Where audio recording is not possible, the Notice allows a non-recorded call-back or meeting, but only if the required discussion points, the client’s answers, the reason for non-recording, and the relevant acknowledgements are properly documented in a summary document.

Key amendment 5: Stronger retention and evidence expectations

The amendment also strengthens record-keeping expectations. Financial advisers must retain the audio recording of the call-back or the summary document for at least five years, and must maintain records of the processes and methods used to comply with the pre-transaction check requirements, including assessments, determinations and supporting reasoning.

In practice, this means firms should revisit not only client-facing forms, but also internal review logs, supervisory sign-off workflows, record retention controls and evidence files.

How Alder can help

For many firms, the challenge is no longer understanding MAS rules at a high level. The real challenge is converting regulatory amendments into forms, scripts, declarations, checklists, controls and records that can withstand compliance testing and supervisory scrutiny.

At Alder, we support licensed and exempt financial advisers with outsourced compliance support, ad hoc policy review and drafting, regulatory advisory, and practical help in tracking and operationalising MAS updates. This can include reviewing your current advisory workflow, updating selected client and trusted individual documentation, refining call-back and pre-transaction check procedures, and helping your firm maintain continued compliance as MAS requirements evolve.

If your firm is assessing whether its current policies and advisory controls remain aligned with the latest MAS expectations, reach out to Alder for practical compliance support.