Updated: 07/22/2014 01:37

MAS proposing stronger safeguards for investors



MAS proposing stronger safeguards for investors

The Monetary Authority of Singapore or MAS is proposing stronger safeguards for investors. 

It says it's doing this to align and regulate all products that essentially have capital market features. 

That's because in recent years, it had noted an increase in non-conventional products offered to retail investors as alternative investments. 

Non-conventional products include precious metals and collectively-managed investment schemes, such as buying a stake in a plot of land. 

These products have features that are similar to regulated capital markets instruments, but may have been structured to fall out of MAS' regulatory ambit. 

There are three key proposals, the first being to extend the current regulatory framework under the Securities and Futures Act, to include investors who invest in non-conventional products. 

Secondly, MAS wants to have a framework that rates investment products in terms of complexity and risk, to allow investors to differentiate between simpler and more complex offerings. 

Lastly, it wants to provide accredited investors or AIs, the choice to receive the same regulatory safeguards that are currently in place for retail investors. 

AIs are grouped by income thresholds. 

They have either net personal assets exceeding $2 million, or their income in the preceding 12 months exceeds $300,000. 

Currently, AIs do not have a choice to decide on their investor status and level of regulatory protection. 

In its statement, MAS says that the global financial crisis has led the international regulatory community to examine if non-retail investors are necessarily better informed or require less regulatory protection than retail investors. 

MAS' Assistant Managing Director of Capital Markets, Lee Boon Ngiap says the three proposals will further safeguard investors' interests and empower them in their investment decisions. 

MAS has kicked off a public consultation on the proposals, which will last six weeks.

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