SINGAPORE - Retail investors could find a wider selection of bonds available on the shelves after financial regulators here relaxed initial rules proposed for such investments.

For one thing, the minimum issue size of bonds in the initial offer that will eventually be available to retail investors has been reduced from $300 million to $150 million.

Bond issuers that wish to tap the retail investment community will also meet a reduced threshold when it comes to its credit standing.

They must not have recorded on average a net loss for the three most recent audited annual financial statements, although they must also have a positive net operating cash flow over the period.

Previously, they would have had to satisfy the requirement of not recording a net loss over the past five years.

The aggregate amount of bond issuance over the past five years would also drop from $750 million to $500 million.

Such tweaks have the effect of enlarging the potential pool of bond issuers, like companies or governments.

Minor refinements have also been made to the type of bonds that can be made available to retail investors.

While they remain as plain vanilla bonds with a term of up to 10 years, bonds with additional security to investors, like those backed by collateral, will also be allowed.

The changes come after public consultation papers on the framework to give retail investors improved access to wholesale bonds were released in September by the Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX).

Wholesale bonds are usually out of the reach of retail investors, as they are costly at a minimum of $200,000 per lot.

Issuers also tend to avoid the retail investor segment as they must comply with tougher disclosure requirements in lodging prospectuses.

Under the so-called seasoning framework, retail investors would be able to buy the wholesale bonds in smaller board lot sizes of $1,000 after the wholesale bonds have been listed for six months.

Offers of these bonds to retail investors would be exempt be the prospectus requirement.

MAS said that the refinements to the eligibility criteria mean that about 120 issuers here would be able to issue bonds under the framework.

Of that number, about half can offer bonds directly to retail investors at the start without having to go through the six-month seasoning period and without having to issue a prospectus.

The potential pool of 60 issuers would come under the MAS exempt bond issuer framework, where they have to meet tougher credit rules.