The Capital Markets and Services Act 2007 (CMSA) repeals the Securities Industry Act 1983 (SIA) and the Futures Industry Act 1993 (FIA). The CMSA, which takes effect on 28 September 2007 introduces a single licensing regime for capital market intermediaries.

Under this new regime, a capital market intermediary will only need one licence to carry on the business in any one or more of the following regulated activities:

  • Dealing in securities;
  • Trading in futures contracts;
  • Fund management;
  • Advising on corporate finance;
  • Investment advice; and
  • Financial planning

Licensing ensures an adequate level of investor protection, including the provision of sufficient safeguards to protect investors from default by market intermediaries or problems arising from the insolvency of such intermediaries. More importantly, it instills confidence among investors that the organisations and people they deal with, will treat them fairly and are efficient, honest and financially sound.

Through its authority to issue licences, the CODT regulates the market by ascertaining the fitness and propriety of companies and individuals applying for licences. In considering whether an applicant is fit and proper to hold a licence, the CODT takes into account the following factors:

  • Probity
  • Ability to perform such functions efficiently, honestly and fairly
  • Financial status
  • Reputation, character, financial integrity and reliability