The Monetary Authority of Singapore (MAS) has issued a consultation paper on Nov 3 on the classification of certain investment products as complex, whereby enhanced safeguards will apply when they are distributed to retail investors.
The paper also proposes changes to increase retail investors’ access to diversified investment funds.
The consultation seeks to enhance the existing complex products 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.
As part of a regular review of its regulations, MAS is seeking views on classifying collective investment schemes that are authorised or recognised by MAS, as simple investment products as well as classifying debentures with varying interest payments or convertible features as complex investment products.
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It also seeks views on the appropriate classification of perpetual securities and preference shares and suitable safeguards for investors who invest in these products, as well as views on removing the requirement for FIs to conduct separate assessments on the investment knowledge and experience of customers when advising customers on products.
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“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,” says Lim Tuang Lee, assistant managing director (capital markets) at MAS. “These include helping retail investors better understand and appreciate the unique characteristics and risks associated with more complex products."
The consultation paper is available on MAS’ website. Interested parties are invited to submit their comments by Dec 15.
Photo: Bloomberg
