The Monetary Authority of Singapore (MAS) has expanded its set of guidelines on fair dealing to now include all financial institutions (FIs) and all products and services they offer to their customers.
FIs will be expected to incorporate key principles of fair dealing at various stages of a product’s life cycle, or services rendered.
The guidelines were first introduced in 2009 under the Financial Advisers Act which covered the selection, marketing and distribution of investment products. The guideline also covered the provision of advice and post-sales services for these products.
The updated guidelines mean that customers can better expect products that are suited to the needs of the target market segment, advice with suitable product recommendations as well as an accurate representation of information and extra consideration for those who are more vulnerable.
Customers can also expect clear explanations of the products as well as the “independent and responsive handling” of feedback.
“This update to the Fair Dealing Guidelines reflects MAS’s expectation for all financial institutions to treat all customers fairly. This must be a foundational value championed by boards and senior management. Fair dealing should be demonstrated across all activities that impact the customer, from product design to post-sales service. We look forward to financial institutions implementing these guidelines robustly,” says Ho Hern Shin, deputy managing director (financial supervision) at MAS.
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Banks like DBS Group Holdings, Oversea-Chinese Banking Corporation (OCBC) and Citi have been supportive of the move.
"DBS stands behind the MAS's updated guidelines on fair dealing. Today, fair dealing is already the foundation of our business and is embedded in everything we do. This includes communicating with our customers in a clear and transparent manner, understanding our customers’ risk profile, and ensuring the suitability of products and services. Conducting our business in a responsible manner and acting in the best interest of customers is key to maintaining trust, which is the bedrock of banking," says Lam Chee Kin, head of legal and compliance at DBS.
OCBC's head of group legal and compliance, Lorreta Yuen, notes that fair dealing has been a "core part" of the bank's culture.
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"We therefore welcome the updated guidelines on fair dealing as it formalises what we believe in and what we have already been putting into practice - acting with integrity, transparency and doing what is right for all customers," she says. "This includes providing clear, relevant and timely information so that they can make informed decisions, recommending products that are aligned with their objectives and risk profiles and deepening our employees' knowledge so that they can give the most appropriate advice."
"We will continue to upload the principles of fair dealing and regularly review and enhance our practices, processes and policies," she adds.
Tibor Pandi, Citi country officer and banking head in Singapore says, "At Citi, we are focused on ensuring that our systems and processes are robust and provide products and advice to clients that are in their best interests. We fully support the expanded guidelines as it will ensure that all customers receive responsible advice from all financial institutions in Singapore, and this is something we fully believe in."
