Singapore Eyes Wider Fund Type Availability, Consults On Changes

Monetary Authority of Singapore

The Monetary
Authority of Singapore has published a consultation paper
about proposals to enable a wider range of fund types – covering
“alternative” areas – to be offered to retail clients
via a streamlined process.

The central bank and regulator is seeking feedback on
proposed changes to the Code on Collective Investment
Schemes. 

The proposals are being issued at a time when several
jurisdictions, such as the US, the European Union and the UK,
have created new structures to enable retail/mass-affluent
investors to gain access to areas such as private equity,
but in a measured way. (Such moves have encountered
controversy.) As more firms choose not to float on stock
markets, or de-list, there is concern that ordinary
investors will be frozen out of investments that offer
higher returns – particularly pertinent as the public is put
under more pressure to save for retirement.

MAS said that as investors become more sophisticated in
Singapore, it has been told that the asset management sector is
interested in offering new types of retail fund
products that cater to a broader range of investment
objectives. Existing funds may not fit the CIS Code’s guidelines.

Amendments would allow existing investment requirements to be
adjusted, as well as offering a wider range of innovative fund
types, MAS said in a 9 July statement.

MAS said a “new Alternative Funds Appendix is proposed to cater
to innovative fund types, to clearly differentiate them from
traditional funds.”

Such fund types will come with “guardrails” to safeguard retail
investors’ interests, MAS said.

Responses to proposals are welcomed and must be sent in by 10
August.