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The MAS has released a consultation paper proposing revisions to the Financial Advisers Regulations (FAR) and the Securities and Futures (Licensing and Conduct of Business) Regulations (SFR). At the heart of these changes is the removal of certain exclusions that allow communications with accredited and institutional investors to fall outside the scope of the advertising rules.
While advertising offers made under prospectus exemptions (such as private placements) remains prohibited under Section 300 of the SFA, the proposed revisions would expand the application of advertising standards to a broader set of promotional activities — even where such materials are not directly tied to an offer.
This shift carries practical implications for Capital Markets Services (CMS) licence holders, particularly fund management companies that regularly communicate with accredited or institutional investors.
What are the key changes proposed by the MAS?
Removal of current exclusions
As it stands, materials directed solely at accredited or institutional investors, or made in relation to exempted offers, are excluded from the definition of a “financial advertisement” under FAR and SFR. Under the new proposal, these exclusions would be removed.
Fund managers will need to ensure that all marketing and promotional materials — even those directed exclusively at non-retail investors — comply with applicable advertising requirements. For instance, fair presentation, appropriate disclaimers, and no misleading statements.
Clarification of prospectus exemption ban
There’s been no change to the advertising prohibition under the SFA. The ban on advertising offers made under prospectus exemptions (e.g. private placements) remains unchanged, with fund managers still being prohibited from advertising such offers to the public.
The proposed changes don’t allow for new types of advertising for fund offers and are instead expected to bring non-offer-related materials under the advertising regime.
Wider capture of digital and indirect promotional content
This proposal, as well as an earlier consultation on enhancing safeguards for proper conduct of digital prospecting and marketing activities, recognise the evolution of advertising channels. The aim is to ensure that regulations cover digital media, sponsored content, websites, social posts, and other forms of investor communication.
Fund managers using these channels to promote their expertise, brand, or strategy (even without a direct offer) will need to review such materials through a compliance lens.
Removal of differing requirements applying to product and non-product advertisements.
There will no longer be a distinction in the content standards that apply to product and non-product advertisements. These communications will need to include, for instance, a clear and balanced presentation of risks and returns, accurate performance representation, and prominent disclaimers.
CMS licence holders will therefore need to assess their existing standards and approval process making relevant updates to address any identified gaps.
What should fund management companies consider?
Fund managers who previously relied on the AI / institutional exclusions may face greater compliance obligations for materials such as:
- private placement memorandum
- monthly or quarterly factsheets
- those used in events and seminars
- digital brand promotion and social media posts.
These materials may be considered as “advertisements” under the revised rules and will require compliance sign-off and record-keeping.
Smaller firms that don’t have dedicated marketing compliance functions may need to formalise approval workflows, train relevant staff, and review existing investor communications to ensure continued compliance.
What’s next?
The MAS’s proposed revisions tighten the rules governing the way in which regulated entities communicate their products and services, even to sophisticated investors. For fund managers, this means adopting a more structured and compliant approach to marketing, particularly in the digital space.
How can Bovill Newgate help you wrap your head around the new financial advertisement rules?
We regularly support firms in the following areas:
- Reviewing client communications for regulatory alignment.
- Assessing marketing materials for compliance with applicable requirements.
- Advising on the interpretation and application of marketing regulations.
- Reviewing and enhancing relevant policies and procedures.
If you’re looking to be licensed, need to change your license, or seek permission for a new controlling shareholder, we can help.
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