5.1 Responsible Business Conduct

5.1.1 Introduction

Responsible business conduct is based on the internal culture and behaviour of Licensed Financial Institutions. Appropriate Business conduct instils a culture of integrity and ethics in its services and activities including product design, development, promotion, sales, distribution, lending / providing finance practices; minimizing Conflict of Interest and Consumer risks; and from a broader perspective, improving the financial wellbeing of its Consumers.

5.1.2 Description

1. 5.1.2.1 Licensed Financial Institutions must act, with due skill, care and diligence, fairly, honestly and professionally in their relationship with Consumers.
    
2. 5.1.2.2 Licensed Financial Institutions must establish and maintain effective policies, procedures, systems and controls to avoid any potential, perceived or actual Conflict of Interest.
    
3. 5.1.2.3 For inherent conflicts of Interest, Licensed Financial Institutions must have controls in place and must provide full and proper disclosure to Consumers prior to any agreements or commitments.
    
4. 5.1.2.4 Licensed Financial Institutions must ensure ethical behaviour of staff towards Consumers by developing an internal code of conduct for the staff, providing regular training, and monitoring Complaints.
    
5. 5.1.2.5 Licensed Financial Institutions must ensure that the staff who directly interact with Consumers will:
    
   1. Competently, efficiently and professionally discharge their duties and provide prospective and existing Consumers with the information and services they are entrusted to provide or sell.
       
   2. Have sufficient knowledge of products and/or services required to help and educate Consumers.
       
   3. Have the professional qualifications at all times necessary to provide Advice and carry out transactions.
       
6. 5.1.2.6 Licensed Financial Institutions must adopt remuneration and staff appraisal policies with the aim of preventing mis-selling, unreasonable risk-taking, Conflict of Interest or other irresponsible conduct. Such policies must not incentivize unethical practices and must reward positive conduct.
    
7. 5.1.2.7 Licensed Financial Institutions are responsible for the actions of their staff. Licensed Financial Institutions’ must maintain appropriate monitoring of staff in relation to its standards of business conduct and ensure full compliance with codes of conduct, laws and regulations.
    
8. 5.1.2.8 Licensed Financial Institutions must not adopt abusive or unreasonable contractual terms.
    
9. 5.1.2.9 Licensed Financial Institutions must monitor for misleading or aggressive sales practices and exploitation of Consumers due to their vulnerabilities, apathy or lack of knowledge.
    
10. 5.1.2.10 Licensed Financial Institutions must monitor and identify Borrowers / Financees facing difficulties in servicing their debt and, upon the Borrower’s / Financee’s request, designate a Credit counsellor to assist the Borrower / Financee in managing their indebtedness. Licensed Financial Institutions must inform Borrowers / Financees who are delinquent as to the availability of qualified Credit counsellors.

5.2 Fair Treatment of Consumers

5.2.1 Introduction

This Regulation aims to address the gap between the level of the public’s financial literacy and the complexity and risks of the Financial Products and/or Services being offered.

5.2.2 Description

1. 5.2.2.1 All Consumers must be treated equitably, honestly and fairly at all stages of their relationship with Licensed Financial Institutions. Treating Consumers fairly must be an integral part of the good governance, business conduct and corporate culture of all Licensed Financial Institutions.
    
2. 5.2.2.2 Licensed Financial Institutions must provide clear and understandable information to Consumers to ensure they are explained their rights and responsibilities with respect to the products and/or services, including the right to have their problems or Complaints addressed in an efficient, effective and respectful manner.
    
3. 5.2.2.3 Licensed Financial Institutions must not restrict Consumer’s choices, such as tied selling and bundling of products and/or services.
    
4. 5.2.2.4 Licensed Financial Institutions must not benefit from their Errors. Errors must be rectified without undue delay upon identification. Consumers affected by an Error must be immediately informed in writing of the cause, impact and rectification of Errors.
    
5. 5.2.2.5 Licensed Financial Institutions must establish clear standards and procedures that prohibit undue and coercive pressure on Consumers in collection of repayments/payments or debts due.