Martin Lee @ Sg
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MAS Consultation Paper on Regulatory Regime for Listed and Unlisted Investment Products

Back in March 2009, MAS issued a consultation paper on the sale and marketing of unlisted investment products.

MAS has carefully reviewed and considered feedback received on the consultation paper and published their responses to the feedback in two parts.

MAS Review Part One

MAS Review Part Two

Regulatory Regime for Listed and Unlisted Investment ProductsAfter careful consideration, MAS has decided to issue revised proposals aimed at enhancing the safeguards for retail customers covering a wider range of investment products that applies to both listed and unlisted investment products.

Under the revised proposals, financial advisers and brokers will be required to formally assess a retail customer’s investment knowledge or experience before selling investment products to them. Customers who do not have the relevant knowledge or experience in specific unlisted investment products must be given financial advice before being able to purchase the product.

In the case of listed investment products, additional safeguards will be required when brokers approve trading accounts for customers who are assessed not to possess the relevant knowledge or experience in derivatives. These new obligations will apply for all investment products other than a list of products which are already established in the market and generally understandable by retail investors.

The excluded products are:

• Shares
• Depositary receipts
• Subscription rights pursuant to rights issues
• Company warrants
• Units in business trusts
• Units in real estate investment trusts
• Plain vanilla bonds (including convertible bonds)
• Money market instruments
• Life insurance policies (other than investment-linked policies)
• Structured deposits (including dual-currency investments)

MAS invites interested parties to give their views and comments on the proposals contained in the Consultation Paper. The consultation period will end on 12 March 2010.

The paper can be found here:
MAS Consultation Paper on Regulatory Regime for Listed and Unlisted Investment Products

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