The Monetary Authority Of Singapore has unveiled new measures to protect investors.

The Monetary Authority of Singapore has announced it will enhance its regulatory framework to protect investors, giving retail users of “non-conventional” products the same safeguards as investors in capital markets products.

In another move, investors who meet prescribed wealth or income thresholds to qualify as accredited investors will have the option to benefit from the full range of regulatory safeguards that are applicable for retail investors, the MAS said in a statement yesterday.

To bring these changes into law, amendments to the Securities and Futures Act will be tabled in Parliament in 2016.

At present, non-conventional investment products that share features similar to capital markets products are not subject to MAS’s regulations. In future, such non-conventional investment products will be regulated either as debentures or investment funds, depending on their features.

Precious metals buy-back arrangements, which involve the sale of precious metals with guaranteed buy-back at an agreed price, are equivalent to collateralised borrowing and will be regulated as debentures under the Securities and Futures Act, the MAS said. 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.

In the case of collectively-managed investment schemes which are in substance similar to traditional regulated investment funds but do not pool investors’ contributions, these will be regulated as collective investment schemes under the SFA. Schemes intended for retail investors will require authorisation from MAS and be restricted to investments in securities or other assets that are liquid (suh as precious metals), or have stable income-generating ability (such as completed real estate).

Arrangements that exist before the legislative changes will not be affected, unless additional funds are raised from retail investors after the new laws are in place, the regulator said.

At present, investors who meet prescribed wealth or income thresholds are classified as “accredited investors” (AI) by default and receive lighter regulatory protection; the MAS said this may not be true for all investors who meet the prescribed wealth or income thresholds.

The MAS said it will “refine the regulatory regime” to empower AI-eligible investors to choose the level of regulatory safeguards best suited to their individual circumstances.

For example, financial institutions must treat new customers who are AI-eligible as retail investors by default, unless the customers choose to “opt-in” to AI status. Institutions can continue to treat existing customers who are AI-eligible as such, unless the customers choose to “opt-out” of AI status to benefit from the full range of capital markets regulatory safeguards available to retail investors.

Among recent moves to tighten rules governing financial services in Singapore has been the jurisdiction's Financial Advisory Industry Review programme of measures, which seeks to address issues such as advisors' remuneration and professional standards, thereby improving the calibre of advice and reducing potential conflicts of interest.