MAS rolls out tougher safeguards for retail investors

Non-conventional investment schemes will also be regulated.

The Monetary Authority of Singapore (MAS) will enhance its regulatory framework in order to provide greater protection for retail investors.

Under the new framework, the MAS will expand its regulatory powers to non-conventional investment products that share features similar to capital markets products.

These include buy-back arrangements of precious metals, which will be equivalent to collateralised borrowing and will be regulated as debentures under the Securities and Futures Act.

The scope will be limited to arrangements involving gold, silver and platinum, as these are widely regarded as financial assets and are commonly used as collateral for such arrangements.

Previously unregulated Collective Investment schemes (CIS) will also be regulated under the new rules. Schemes intended for retail investors will require authorisation from MAS and be restricted to investments in securities or other assets that are liquid, such as precious metals, or or have stable income-generating ability such as completed real estate.

Another aspect of the new framework involves accredited investors (AIs), or investors who meet prescribed wealth or income thresholds. Under the new framework, AIs can choose to benefit from the full range of regulatory safeguards that are applicable for retail investors.