Singapore legislation
Clause 121
Clause 121
Recommendations by certain persons
(1)
The holder of a capital markets services licence, or a representative of such a holder, shall not make a recommendation with respect to any capital markets products to a person who may reasonably be expected to rely on the recommendation if the holder or representative does not have a reasonable basis for making the recommendation to the person.
(2)
For the purposes of subsection (1), the holder of a capital markets services licence, or a representative of such a holder, does not have a reasonable basis for making a recommendation to a person unless —
the holder or representative has, for the purposes of ascertaining that the recommendation is appropriate having regard to the information possessed by the holder or representative 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)
The holder of a capital markets services licence, or a representative of such a holder, who contravenes subsection (1) shall not be guilty of an offence under subsection (1) or under section 335.
(4)
Where —
the holder of a capital markets services licence, or a representative of such a holder, 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 holder or representative is liable to pay damages to that person in respect of that loss or damage.
(5)
Subsection (4) is in addition to and not in derogation of any other remedies available to the person referred to in that subsection.
(6)
In this section, a reference to the making of a recommendation is a reference to the making of a recommendation whether orally or in writing and whether expressly or by implication.