MyComplianceOffice Blog

Compared with other industries, the financial services industry inherently has an elevated risk of conflicts of interest. In particular, connected persons and close personal relationships can influence decisions that result in significant business and financial impact. After all, we’re all human and sometimes act based on emotion. Unfortunately, those human, emotional connections can sometimes lead to severe conflicts.

In late 2022, the Monetary Authority of Singapore (MAS) announced a complete ban on payment for order flow (PFOF) in Singapore. The move is designed to protect investor interests by mitigating the risk of conflicts of interest arising in brokers’ best execution obligations to their customers. The PFOF ban will commence on 1 April 2023 and can affect financial firms and individuals operating under a capital markets services (CMS) licence in Singapore.

The preservation of healthy financial markets relies on having safe, properly regulated environments where investors can confidently trade securities. Unfortunately, high-profile insider trading cases have grabbed the spotlight in recent years.

Cases of insider trading and securities compliance failures have made headlines in recent years. And for a good reason. Financial markets rely heavily on high liquidity, making it easy to trade securities without affecting price. However, when markets are manipulated, liquidity is affected, transaction costs can increase, and investor returns are reduced.

For every registered firm with the SEC, it’s not a matter of if you’ll be examined but when. COVID-19 drove a necessity for the SEC to adapt its examination processes from traditionally in-person activities to remote. As a result, companies operating in the Asia-Pacific (APAC) region must now be ready and able to support the SEC in its procedures.