How 9 Things Will Change The Way You Approach Capital Market Service (CMS) License

The capital market service (CMS) license is a regulatory requirement for financial institutions that offer certain types of investment products and services. In order to obtain a CMS license, firms must meet certain standards set by the Monetary Authority of Singapore (MAS).

One of the key requirements is having a minimum paid-up capital of S$1 million. This article will explore how the recent changes to the MAS guidelines will impact firms that are looking to obtain a CMS license

What is a Capital Market Service (CMS) License?

A Capital Market Service (CMS) License is a type of license that allows a company to provide certain financial services to investors. These services can include things like stock broking, futures trading, and provide advice on financial products. In order to obtain a CMS License, a company must first meet certain requirements set by the Monetary Authority of Singapore (MAS). These requirements include having a minimum paid-up capital of $1 million, and having at least two full-time employees who are qualified to provide the financial services that the company intends to offer.

Once a company has met these requirements, they can then apply for a CMS License from the MAS. The application process is quite extensive, and includes things like submitting detailed business plans and providing information about the company’s management team. If successful, the company will be granted a CMS License which will allow them to operate as a licensed financial service provider in Singapore.

The Different Types of CMS Licenses

There are three different types of CMS licenses: the Series 7, Series 65, and Series 66. The Series 7 license is the most common type of  CMS license. It allows you to work as a registered representative of a broker-dealer and sell securities products. The Series 65 license is required in order to work as an investment adviser. The Series 66 license is a combination of the Series 7 and 65 licenses and allows you to work as both a registered representative and an investment adviser. Each type of CMS license has different requirements.
For example, the Series 7 license requires you to pass a two-day examination that covers topics such as equity securities, debt securities ,and investment strategies. The Series 65 license requires you to pass a one-day examination that covers topics such as investment adviser regulations and ethics. The Series 66 license requires you to pass both the Series 7 and 65 examinations. If you want to work in the capital markets, you will need to obtain a CMS license. The type of CMS license you need will depend on the specific job you want to do

Pros and Cons of a CMS License

There are both pros and cons to having a CMS license. One of the biggest pros is that it allows you to offer a wider range of services to your clients. With a CMS license, you can provide advice on investments, insurance, and other financial products. This can help you attract more clients and grow your business. One of the biggest cons of having a CMS license is that it requires you to take on more responsibility. You need to make sure that you are providing accurate and up-to-date advice to your clients. If something goes wrong, you could beheld liable.

This means that you need to have comprehensive insurance in place. Overall, there are both pros and cons to having a CMS license. You need to weigh up the risks and benefits before deciding if it is right for you and your business

What Activities Require a CMS License?

1.Engaging in Capital Market Activities
In order to engage in capital market activities, you will need to obtain a CMS license from the Monetary Authority of Singapore (MAS). The types of activities that require a CMS license include:

  • Dealing in securities
  • Underwriting of securities
  • Fund management
  • Financial advisory services
If you carry out any of the above activities without a CMS license, you may be liable for a fine of up to $100,000 or imprisonment of up to 2 years or both.
2.Applying for a CMS License
You can apply for a CMS license online via the MAS website. The application process is straight forward and you will need to provide the following information:
  • Your personal particulars
  • Details of your educational qualifications
  • Details of your work experience
  • The type of capital market activity you wish to engage in
  • The name of the firm you will be working for (if applicable)

How to Apply for a CMS License

In order to apply for a CMS license, you will need to submit an application to the Securities and Futures Commission (SFC). The application must include all of the required documents, as well as a non-refundable application fee. Once your application has been submitted, the SFC will review it to make sure that you meet all of the eligibility requirements. If you are approved, you will be issued a provisional license. This license will allow you to begin operating your business while you complete the registration process.
 
You will also need to pass an examination in order to obtain your CMS license. The examination covers topics such as securities regulations and market practices. Once you have passed the examination, you will be issued a full license. The process of applying for a CMS license can be complex and time-consuming. However, itis important to make sure that you follow all of the steps correctly in order to avoid any delays or problems

What Happens After You Get Your License

After you get your CMS license, you’ll be able to provide capital market services to clients. This includes activities like investment advice, stockbroking, and dealing in securities. You’ll need to meet certain standards and requirements in order to maintain your license. For example, you’ll need to have a certain level of professional indemnity insurance. You’ll also need to comply with the requirements of the Financial Services Board.

It’s important to note that your license is only valid for the country in which it was issued. So if you want to provide services in another country, you’ll need to apply for a new license. Getting a CMS license is a big responsibility. But it can also open up new opportunities and help you grow your business.

Conclusion

The Capital Market Services (CMS) license is an important tool for businesses operating in the securities industry. As the world of finance evolves, so too does the CMS license. Here are 9things that will change the way you approach obtaining a CMS license:

  1. The application process will become more stream lined and efficient.
  2. The cost of a CMS license will increase.
  3. The minimum capital requirements for a CMS license will increase.
  4. The experience requirements for a CMS license will become more stringent.
  5. The fit and proper criteria for a CMS licensee will become more stringent.
  6. There will be greater emphasis on ongoing training and professional development for those holding a CMS license.
  7. There will be increased transparency around the decision-making process for granting or denying a CMS license.
  8. The appeals process for denied or revoked licenses will be strengthened and made more accessible to applicants.
  9. New technologies will be taken into account when assessing applications for a CMS license

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