SINGAPORE, July 21 — The Monetary Authority of Singapore (MAS) has released a consultation paper on proposals to enhance its regulatory framework to safeguard investors’ interests. 

MAS, in a statement today, said the key changes included extending the current regulatory safeguards to investors in capital markets, and requiring all investment products to be rated for complexity and risks, and for these ratings to be disclosed to investors.

It also provides accredited investors (AI1) the option to benefit from the full range of capital markets regulatory safeguards that are applicable for retail investors.

MAS assistant managing director (capital markets) Lee Boon Ngiap said, “Taken together, the three proposals will further safeguard investors’ interests and empower them to make better informed investment decisions.”

The proposed framework leverages on a framework study report submitted to MAS by the Investment Management Association of Singapore (IMAS). 

IMAS had engaged and commissioned the Sim Kee Boon Institute for Financial Economics, Singapore Management University to develop a foundation framework to classify investment products according to their complexity and risk.

Under the proposed framework, all investment products sold to retail investors will be rated along two dimensions — complexity of structure and risk of loss of initial investment principal.

Product issuers will be required to disclose these ratings in product offering documents and marketing materials, along with information on the historical price volatility or credit rating of the product. — Bernama