The Monetary Authority of Singapore (MAS) has proposed to classify certain investment products as complex in a bid to increase the protection for retail investors.
A consultation paper issued by the regulator, also proposes changes to expand access to diversified investment funds for retail investors.
It is aimed at improving the current complex product regime, which was first rolled out in 2012, the regulator said. S
The framework will allow retail investors to access a spectrum of investment offerings and offer them a better understanding of the features and risks of products that are considered complex.
MAS said that it is seeking views on a number of recommendations as part of its regular review of the regulatory regime.
The includes views on collective investment schemes as simple investment products and classifying debentures with varying interest payments or convertible features as complex investment products.
The regulator is also seeking opinions on the proper classification of perpetual securities and preference shares, and suitable safeguards for investors looking to in such products.
It is also seeking views on eliminating the requirement for financial institutions to carry out separate assessments on the investment knowledge and experience of customers as part of advisory process.
MAS assistant managing director for capital markets Lim Lee 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.”
In September this year, an advisory group for the US Securities and Exchange Commission (SEC) voted in favor of letting ordinary investors invest in private funds.
At present, only institutional and wealthy investors in the US are eligible to invest in private equity funds.
The SEC’s Asset Management Advisory Committee approved a report that recommended the regulator to enlarge the common investor’s access to private-equity, private-debt and real-estate vehicles.