There seems to be a proliferation of activities involving provision of investment advice which has prompted the SC to issue the Guidance Note on Provision of Investment Advice last year.

A person must be licensed by the SC for providing investment advice under the CMSA if he:
• is carrying on a business of advising others concerning securities or derivatives; or
• as part of a business, issues or promulgates analyses or reports concerning securities or derivatives.

A few points from the Guidance Note:

1. Any communication involving providing recommendations or opinions which are likely to induce a person to take any action or position in relation to securities or derivatives, is likely to be considered as “advising others concerning securities or derivatives”.

2. A person is likely to be considered as ‘carrying on a business’ if the activity is undertaken in a structured manner with regularity, or any of the following applies:
– Pay-for-advice arrangements;
– Offering a fee-based subscription to a channel or group, including on social media, which offers investment advice; or
– Expectation of direct or indirect benefits/gratification, from the provision of investment advice.

3. The factors above are not exhaustive.

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This post was first posted on Linkedin on 23 April 2021.