MAS Misconduct Reporting Updates for FAs and Insurance Brokers

This regulatory update is specifically targeted at Licensed / Exempt Financial Advisers and Insurance Brokers.

The Monetary Authority of Singapore (MAS) has introduced updated misconduct reporting requirements that firms should start preparing for ahead of the official implementation date of 1 January 2027. The changes affect how firms identify reportable misconduct, when reports must be filed, when follow-up updates are required, and what records must be maintained internally.

Updated MAS Notices

The updated framework formalizes revised reporting obligations across two primary sector notices:

These updated notices formalize a structured reporting framework around:

• Submission of an initial Misconduct Report.
• Submission of an Investigation Report in specific cases.
• Submission of Update Reports following key developments.
• Provision of certain reports to the individual concerned.
• Maintenance of proper supporting records and audit trails.

Who This Affects

The updated requirements apply strictly to:

• Licensed Financial Advisers
• Exempt Financial Advisers
• Insurance Brokers
• Relevant accident and health insurance intermediaries

In practical terms, firms should immediately review whether their current compliance, HR, and investigation workflows are ready to support these new reporting obligations.

Scope of “Misconduct”

Under the updated notices, misconduct is defined significantly broader than fraud or dishonesty alone. It encompasses acts or omissions such as:

• Fraud
• Dishonesty
• Conduct involving illegal monetary gain
• Gross negligence
• Inappropriate advice
• Inappropriate recommendations
• Misrepresentation
• Inadequate disclosure of information to clients

The central test is whether the conduct materially adversely affects the client or calls into question the individual’s fitness and propriety.

Reporting Protocols & Requirements

1. Misconduct Report

Where a firm has reasonable grounds to believe that misconduct has occurred, it must generally submit a Misconduct Report to MAS within 21 calendar days, unless MAS has allowed a longer period in writing.

Firms should not wait until an issue is fully concluded before determining whether reporting is triggered. A clear internal escalation process is essential—particularly where the matter first arises through customer complaints, supervisory reviews, monitoring findings, or internal investigations.

2. Investigation Report

In certain cases, a firm must also submit an Investigation Report. This becomes especially important where alleged misconduct involves fraud, dishonesty, illegal monetary gain, or similar matters.

Firms are expected to assess whether a police report should be lodged. If a police report has been made, the relevant details must be included as part of the submission. Even where a matter does not involve fraud or dishonesty, an Investigation Report may still be required if the firm’s reasonable grounds are based on or supported by internal investigation findings.

3. Update Reports

The new framework does not stop at the initial report. Firms must submit Update Reports within 21 calendar days of any significant development, including:

• A police report being lodged.
• A decision not to lodge a police report after earlier consideration.
• Material changes to investigation findings.
• Disciplinary or corrective action taken by the firm.
• Material updates relating to ongoing investigations or legal proceedings.

Firms will need a proper mechanism to track post-reporting developments rather than treating the initial submission as the end of the matter.

Disclosure to the Individual Concerned

The updated notices place heavy emphasis on procedural handling after a report is submitted.

Subject to certain exceptions, firms must provide the individual concerned with a copy of the Misconduct Report and certain related Update Reports within the prescribed period after submission to MAS.

However, not every document needs to be shared. Certain reports and materials—particularly where disclosure may prejudice investigations or where the person cannot reasonably be contacted—may be treated differently.

Firms should ensure that their internal Standard Operating Procedures (SOPs) clearly set out:

• What materials must be shared with the individual.
• What materials may be withheld under legal or regulatory exceptions.
• Who within senior management approves that decision.
• How the rationale for non-disclosure is formally documented.

Mandatory Internal Record-Keeping

Record-keeping is a foundational part of the updated framework. Under the revised regime, financial institutions must maintain proper records of:

1. The underlying facts of the case.
2. Affected clients and impacted transactions.
3. Investigation steps taken and evidence reviewed.
4. Internal assessments and conclusions reached.
5. Disciplinary or corrective actions taken.
6. Whether reports were provided to the individual concerned.
7. The detailed basis for any decision not to provide certain materials to the individual.

Maintaining comprehensive records is critical not only for regulatory compliance, but also for demonstrating that the firm has handled the matter in a structured, objective, and defensible manner.

Transitional Provisions

The updated notices take effect from 1 January 2027.

Transitional treatment may apply depending on when the misconduct arose and whether reporting obligations had already been triggered under the previous notices (FAA-N14 or MAS 504). Legacy cases, unresolved complaints, or internal investigations that remain open when the new framework comes into force cannot simply be ignored.

Early process reviews are vital for firms that currently have ongoing cases or historical investigations in progress.

What Firms Should Do Now: 6-Point Readiness Checklist

Before 1 January 2027, financial advisers and insurance brokers should review whether they have:

• A clear trigger protocol for identifying when there are “reasonable grounds” to report.
• An assigned internal owner responsible for investigations and regulatory reporting.
• A documented process for assessing whether a police report should be lodged.
• A mechanism to track and meet 21-day deadlines for Update Reports.
• An SOP governing disclosure of reports to the individual concerned (including non-disclosure approval workflows).
• Adequate investigation record-retention procedures meeting MAS standards.

Frequently Asked Questions