Singapore amendments to boost safeguards for wealthier investors headed for Parliament

The Monetary Authority of Singapore building.
The Monetary Authority of Singapore building.PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - The Monetary Authority of Singapore intends to introduce legislative amendments aimed at boosting safeguards for wealthier investors for a first parliamentary reading by the fourth quarter.

If passed by lawmakers, the central bank will aim to implement the changes to the so-called "accredited investor" regime next year, the MAS said in an e-mailed response to questions from Bloomberg News on Friday (Sept 2). The timetable is in line with the central bank's statement almost a year ago, when it said it would submit the proposals in 2016.

The revisions are aimed at granting some wealthy individuals the option to choose protections available to retail investors. Singaporean law assumes rich investors are better informed or have greater means to protect their own interests, and therefore exempts banks from having to provide certain disclosures about financial products that are made to retail investors.

"Consistent with the practice in other major financial jurisdictions, the full suite of regulatory protection under the capital markets regulatory framework is aimed primarily at retail investors," the MAS said. "The proposed refinements to the AI regime formed part of a package of proposals to enhance regulatory safeguards for investors in the capital markets."

Under Singapore law, an individual accredited investor is a person who has more than S$2 million in personal assets including property, or made at least S$300,000 of income in the preceding 12 months. When dealing with accredited investors, banks and brokerages are exempt from requirements such as having to provide a prospectus.

The proposed amendments will give such individuals an option to be treated as retail investors, thus extending relevant regulatory safeguards to them, the MAS said. The revision will also tighten the S$2 million net personal assets threshold so that an investor's primary home can only contribute up to half that value, the MAS said.

Some wealthy investors are facing losses after a series of defaults among Singapore's local dollar-denominated corporate bonds. Last month, energy-services firm Swiber Holdings Ltd. became the latest company to miss bond payments.