The Monetary Authority of Singapore (‘MAS’) has released a consultation on proposals to enhance regulatory safeguards for investors in capital markets with three major drives. First, MAS proposes to extend the regulatory safeguards to retail investors to non-conventional products that are similar to regulated capital markets products: Buy-back arrangements involving precious metals are proposed to be considered debentures. The scope of collective investment schemes (‘CIS’) is proposed to be extended to products that do not pool contributions but assets are managed as a whole and thus pooled in effect. Second, MAS proposes to introduce a complexity risks rating for investment products sold to retail investors that introduces ratings along two separate dimensions: (1) the complexity of structure and (2) the risk of loss of initial principal investment. Third, MAS proposes amendments to investor qualifications. Most importantly, MAS proposes to also consider investors who meet the criteria as accredited investors (‘Eligible Investors’) as retail investors unless they opt in to be classified as accredited investors (‘AI’). In addition, MAS proposes slight amendments to the requirements for AI / Eligible Investors and institutional investors (‘IIs’) as well as the elimination of the category of expert investors (‘EIs’).
Comments can be submitted to the MAS until 1 September 2014. For more information, please read our regulatory update on the Consultation Paper on Proposals to Enhance Regulatory Safeguards for Investors in Capital Markets.