Singapore legislation
Section 51
Section 51
Recommendations by adviser
(1)
An adviser who —
makes a recommendation with respect to securities or a class of securities to a person who may reasonably be expected to rely on the recommendation; and
does not have a reasonable basis for making the recommendation to the person,contravenes this subsection.
(2)
For the purposes of subsection (1), an adviser does not have a reasonable basis for making a recommendation to a person unless —
the adviser has, for the purposes of ascertaining that the recommendation is appropriate having regard to the information possessed by the adviser concerning the investment objectives, financial situation and particular needs of the person, given such consideration to, and conducted such investigation of, the subject-matter of the recommendation as is reasonable in all the circumstances; and
the recommendation is based on that consideration and investigation.
(3)
An adviser who contravenes subsection (1) is not guilty of an offence under subsection (1) or under section 116.
(4)
Where —
an adviser contravenes subsection (1) by making a recommendation to a person;
the person, in reliance on the recommendation, does a particular act, or refrains from doing a particular act;
it is reasonable, having regard to the recommendation and all other relevant circumstances, for the person to do that act, or to refrain from doing that act, as the case may be, in reliance on the recommendation; and
the person suffers loss or damage as a result of doing that act, or refraining from doing that act, as the case may be,the adviser is liable to pay damages to the person in respect of that loss or damage.
(5)
In this section —
a reference to an adviser is a reference to a person who is a dealer, investment adviser, dealer’s representative or investment representative; and
a reference to the making of a recommendation is a reference to the making of a recommendation, whether expressly or by implication.