The Monetary Authority of Singapore will strengthen its regulatory framework for safeguarding investors’ interests, following feedback from a consultation paper published last year.
The changes will affect the Securities and Futures Act, and the proposed amendments will be tabled in Parliament next year, MAS said in a news release on Tuesday, Channel NewsAsia reported.
MAS will extend its capital markets regulations to non-conventional investment products which share similar features. This includes the sale of precious metals with guaranteed buy-back at an agreed price. Arrangements involving gold, silver and platinum will be regulated as debentures under the SFA.
Collectively-managed investment schemes which are similar to traditional regulated investment funds but do not pool investors’ contributions will also be regulated under the SFA, the central bank said. Schemes for retail investors will need to be authorized, and they will be restricted to investments in securities and other liquid assets such as precious metals, or those that have stable income-generating ability, such as completed real estate.
Currently, investors who meet the wealth and income thresholds are classified as Accredited Investors by default. AIs receive less regulatory protection, as they are seen to be better able to protect their own interests, said MAS.
With the enhanced regulatory framework, financial institutions will be required to treat new customers as retail investors even if they are eligible as AIs, unless they opt in for AI status. Also, existing AIs can choose to retain their status if they do not wish to receive the same regulatory protection as retail investors, MAS added.
