Introduction

This FAQ provides clarification and guidance to Question 8 of the current FAQ on the Single Licensing Regime (In Reference to the Licensing Handbook). The Question prescribes that a registered person dealing in unit trust and attached to a UTMC cannot be attached to another principal.

Following the FAQ with regard to the position of unit trust consultants, the SC has received several enquiries requesting for further clarification on the implementation of Question 8 and other issues with regard to individuals licensed for financial planning and interns attached to licensed financial planning firms.

1.

Can a Unit Trust Consultant who is attached to a UTMC, CUTA or IUTA, be allowed to distribute unit trust products of other UTMCs, CUTAs or IUTAs?

No. A Unit Trust Consultant (UTC) is not permitted to market and distribute unit trust products other than the products of his principal, to which he is attached to.

A UTC is only allowed to market and distribute the products of its Principal, which may be a UTMC, CUTA or a IUTA. He cannot distribute products of another UTMC at the same time.

This is to ensure that the UTC provides dedicated advice to the investor with respect to his principal’s products.

2.

Can a Unit Trust Consultant be attached to more than one UTMC?

No. As mentioned above, a UTC can only be attached to one UTMC and cannot distribute unit trust products directly or indirectly of other UTMCs. He should also not have other arrangements to distribute products of other UTMCs.

3.

Are employees of the IUTA, who are registered as UTCs with FIMM allowed to distribute unit trust funds independent of their employers?

No. The employees of a IUTA who are UTCs by virtue of their responsibilities in the IUTA, cannot become a UTC and attach themselves independently with any UTMC, CUTA or IUTA.

4.

Can an individual who holds a financial planning license and is a unit trust consultant, attach himself to more than one UTMC?

No. A UTC can only be attached to one UTMC, as its Principal. The individual, who holds a financial planning license, should distribute the unit trust products of his Principal and pursuant to a financial plan. This is consistent with the approach as described in Question 1 and 2 above.

5.

Can an individual who holds a financial planning license, who intends to become a CUTA continue to be attached to a UTMC?

No. The Financial Planning license holder must detach himself or herself from the UTMC prior to the CUTA seeking registration with FIMM. The CUTA can be attached to several UTMCs. As mentioned in Question 1 above, the CUTA and its representatives can only distribute unit trust products pursuant to a financial plan and with respect to the products of the UTMCs that the CUTA has arrangements with.

6.

Are interns of a CUTA allowed to be registered as UTCs with FIMM either to distribute unit trust products on behalf of the CUTA or to distribute unit trust products independent of the CUTA?

No. An intern is not allowed to become a UTC, regardless of whether it is in his or her capacity as an intern of the CUTA or independent of the CUTA. This requirement is consistent with the framework for CUTAs, which does not allow the individual licensed financial planning representative to have an arrangement with UTMCs. This also follows the principle of interns assisting the financial planners of a CUTA and must not operate to avoid the requirement for FPs of CUTAs to be detached from UTMCs.

   

January 2010