Investing in complex products: Safeguards in place

We thank Mr Lawrence Loh Kiah Muan for his feedback ("Beware of investing in hard-to-understand products"; Nov 28).

The Monetary Authority of Singapore (MAS) has introduced key measures over the past few years to better protect retail investors' interests. These include:

  • Product Highlights Sheet (PHS), which issuers are required to provide as a complement to prospectuses. The PHS is a simplified document that highlights key features and risks of the investment product in a clear and succinct manner.
  • Assessment of investors' investment knowledge or experience, which financial institutions are required to conduct as part of their product suitability considerations.
  • This goes beyond a risk warning disclosure; a financial institution must provide financial advice if it assesses the investor not to have adequate knowledge or experience.
  • Seven-day cooling-off period for unlisted debentures, including structured notes. Investors can change their mind and exit the investment without incurring sales charges or commissions during this period.

On the Financial Industry Disputes Resolution Centre adjudication process, adjudicators consider the facts and merits of each and every case before making a decision.

This would include determining if a financial institution was involved in mis-selling or misrepresenting a product to the investor, even if the investor has signed various acknowledgement forms provided by the financial institution.

We fully agree with Mr Loh that investors should refrain from investing in any product that they do not understand.

Ultimately, investors must take responsibility for their financial decisions.

MAS will continue to work with the industry and other government agencies to enhance financial literacy among Singaporeans.

MoneySense, the national financial education programme, is the centrepiece of this effort.

It has published a list of key questions that investors should consider before taking up an investment product, as well as what to ask when a product is recommended to them.

We encourage the public to visit the MoneySense website ( to find out more about financial products.

Bey Mui Leng (Ms)
Director (Communications)
Monetary Authority of Singapore

A version of this article appeared in the print edition of The Straits Times on December 09, 2015, with the headline 'Investing in complex products: Safeguards in place'. Print Edition | Subscribe