Posted inSingapore

MAS proposes regulatory shake-up for retail investors

The changes are meant to improve understanding of the risks of complex products.

The Monetary Authority of Singapore (MAS) has launched a consultation paper to make changes to the classification of investment products to better protect retail investors.

The paper also proposes to make changes to increase retail investors’ access to diversified investment funds.

The consultation seeks to improve the existing regime that was first introduced in 2012. The framework allows for retail investors’ access to a range of investment products, while helping them better understand the features and risks of products that are considered more complex.

The MAS is seeking views on the following:

  • Classifying collective investment schemes that are authorised or recognised by MAS, as simple investment products;
  • Classifying debentures with varying interest payments or convertible features as complex investment products;
  • The appropriate classification of perpetual securities and preference shares , and suitable safeguards for investors who invest in these products; and
  • Removing the requirement for financial institutions to conduct separate assessments on the investment knowledge and experience of customers when advising customers on products.

Lim Tuang Lee, assistant managing director (Capital Markets), said, “With these proposals, we strive to maintain the balance between providing retail investors convenient access to a range of investment products, while ensuring that sufficient safeguards are in place to enable them to make informed investment decisions.

“These include helping retail investors better understand and appreciate the unique characteristics and risks associated with more complex products.”

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