Investment advice by persons not carrying on a business: a growing number of online discussion fora, chat-rooms and bulletin boards allow persons to post their opinions concerning securities. An entity providing a platform for public discussion of securities would not attract licensing.11 Neither would a participant, as long as he is not deemed to be “carrying on a business” of providing advice. In the context of dealing, we will treat two common practices as passive conduits. First, websites providing hypertext links to, or advertisements for, licensed dealers. But websites should not advertise for, or link users, to unlicensed dealers, including overseas dealers not licensed by MAS. Second, licensing is not necessary for providing prospectuses and application forms passively on websites, or via email upon the request of investors. These merely improve on the efficiency of paper distribution.12 Websites must not go beyond being passive conduits. MAS will consider portals or websites providing facilities for accepting or relaying orders to dealers as licensable. This is because such a facility carries the risk of failure to transmit trade orders in a timely and accurate fashion, potentially to the detriment of investors. Overseas websites specifically targeting Singapore residents Our final principle deals with overseas websites. MAS will apply the same licensing principles to overseas websites which specifically target Singapore residents, as it does to local websites. This is to ensure that foreign and local internet players are treated on the same regulatory basis.

10  11  12  Portals which reproduce investment research reports should (a) attribute the report sources accurately, (b) should not exercise editorial control over, or modify contents of reproduced reports, and (c) should not endorse or otherwise comment on the reports. The webpages of such entities should contain disclaimers to the effect that the views expressed are not those of the entities. Websites providing prospectuses and application forms in a passive manner should display disclaimers to the effect that they do not have the intention of inducing investors to subscribe for securities. BIS Review 69/2000  6  Going forward Several of the new licensing principles can be implemented based on the existing Securities Industry Act and licensing framework. Others will require amendments to the legislation. The new provisions will be included in the forthcoming Financial Advisers Act and the Omnibus Securities and Futures Act, and announced in 2001. MAS has already received a number of new applications which fall under the proposed securities licensing framework. These are currently being evaluated. As I have just discussed the licensing principles broadly, interested parties should approach MAS to discuss the details of the revised licensing framework in relation to their business models. MAS will also be seeking further comments from relevant industry players on these changes. Conclusion The vitality and dynamism of global capital markets have ushered in challenging times for the financial services industry. With technology breaking down geographic and sectoral boundaries, links between markets, institutions and instruments will flourish.