MAS Revises Misconduct Reporting Requirements – Key Changes Taking Effect from 1 January 2027

On 30 December 2025, the MAS issued its long-awaited revised Notice, SFA 04-N24, on the Reporting of Misconduct of Representatives by holders of Capital Markets Services (CMS) licences and exempt persons.

For fund managers and other capital markets intermediaries (CMI), the revised requirements represent an important shift towards more structured, transparent, and timely misconduct reporting, supported by stronger expectations around investigations, corrective actions, and recordkeeping.

Key changes

1. Clearer scope of Reportable Misconduct

The revised Notice narrows the definition of “misconduct”, focusing on two key categories:

• Market conduct breaches under Part 12 of the Securities and Futures Act (e.g., insider trading, prohibited conduct), and

• Acts involving fraud, dishonesty or illegal monetary gains, such as bribery, money laundering, tax evasion, criminal breach of trust, and similar offences.

Firms are expected to report once they have reasonable grounds that misconduct has been committed, even if culpability has not yet been conclusively established.

This reinforces MAS’s expectation that misconduct reporting is part of a firm’s broader fitness and propriety and conduct oversight responsibilities.

2. Extended reporting timeline – 21 days

Under the revised framework, a firm must submit a Misconduct Report no later than 21 days after it first has reasonable grounds to believe misconduct occurred. This replaces the previous 14-day requirement, providing firms with more time to assess allegations, while still ensuring timely regulatory notification.

3. Additional reporting – Investigation Report

A key enhancement to the framework is the requirement for firms to submit an Investigation Report in specified circumstances, particularly where misconduct involves fraud or dishonesty.

For misconduct involving illegal monetary gains, firms must:

• Assess whether a police report should be lodged, and

• Submit an Investigation Report at the same time as the Misconduct Report.

MAS clarified that it is not its expectation for firms to submit an Investigation Report at the outset. In most cases, “reasonable grounds” are established only at the conclusion of an investigation. However, in limited cases where reasonable grounds arise earlier (e.g., formal regulatory action), firms may need to report first and provide investigation updates later.

4. Ongoing update obligations for any significant developments

Once reports are filed, firms must submit an Update Report within 21 days of any significant development.  Examples include:

• Lodging a police report

• Completion or change in investigation outcome

• New or revised corrective action

• Awareness of criminal proceedings outcomes

MAS also confirmed that firms are not expected to actively chase police updates but must report outcomes once they become aware (including through news monitoring).

5. Requirement to provide Misconduct Reports to the Representative

A notable change is the requirement for firms to provide a copy of the Misconduct Report (and any Update Reports) to the representative or former representative within 21 days of submission.

Exceptions apply where such disclosure may prejudice investigations or where the individual cannot be contacted.

MAS emphasised that firms should implement proper safeguards, such as encrypted delivery, and that sensitive content in templates can be reduced.

6. Stronger expectations around Internal Investigations and Corrective Action

The revised Notice includes annexed guidance on:

• Conducting robust internal investigations

• Maintaining fair appeal processes

• Taking proportionate corrective actions such as suspension, termination, clawback, retraining, or enhanced supervision

MAS expects firms to treat misconduct reporting not as an administrative exercise, but as part of a broader disciplinary and governance framework.

7. Transition Period – one year to prepare and implement

The revised Notice takes effect on 1 January 2027, giving firms a one-year transition window to update processes and controls. To aid this, MAS targets to share finalised reporting templates by Q2 2026.

What firms should do now

These changes are key for all types of FMCs and CMIs since they impact:

• Representative oversight

• Fitness and propriety assessments

• Internal investigations

• Regulatory reporting readiness

• Governance and disciplinary frameworks

Firms should consider taking early steps to:

• Review existing misconduct escalation and reporting procedures

• Align investigation protocols with MAS expectations

• Enhance documentation and record retention

• Update HR and compliance workflows for representative notification

• Conduct training for supervisors and compliance teams

How we can help

To enable fund managers and CMIs to meet these requirements, we assist with:

• Gap assessments against the revised Notice SFA 04-N24

• Updating misconduct reporting policies and internal procedures

• Providing regulatory inputs to investigation and disciplinary action frameworks

• Training compliance teams and senior management on the new requirements

• Supporting implementation ahead of the 1 January 2027 deadline

If you would like to discuss how these changes apply to your business, please reach out to our team.