Singapore refines list of investment products

Singapore’s Monetary Authority (MAS) has recently added three types of products to its list of Excluded Investment Products (EIPs), thereby expanding the variety of investment offerings (inclusive of foreign-listed products) to ordinary investors in Singapore.

Singapore Company Registration specialist Rikvin is optimistic that the move, which will come into effect in October 1, 2012, will give not only ordinary, but seasoned investors and high net worth individuals (HNWIs) in Singapore a wider array of complex investment products to invest in. Rikvin is also optimistic that by opening up the playing field to ordinary investors, Singapore will create a freer and more dynamic investment environment which in turn benefits investors and businesses.

EIPs will include 1) EIP-equivalent investment products listed on foreign exchanges, 2) some Collective Investment Schemes (CIS) and 3) sub-funds of Investment-linked Life Insurance Policies (ILPs) with the effect of October 1, 2012.

As EIPs are categorized by complexity, rather than risk levels, banks and brokerages will also be required to 1) counsel potential clients of risks related to the product as well as 2) to ensure a client’s approval on the risk warning disclosure prior to their first purchase.

Commenting on the move, Mr. Satish Bakhda, General Manager and Head of Rikvin’s Operations said, “On one level, we welcome the move to expand the EIP offerings to new ordinary investors as this would help create a more robust and heterogeneous trading environment. At the same time, this move signals seasoned investors and HNWIs that trading in Singapore is a little freer and this may enhance the republic’s attractiveness as an investment location. This, in turn, benefits EIP-related businesses and may sway their decision to form a Singapore company.”

“On another level, we also welcome the new requirement for intermediaries to counsel investors prior to purchase. When investors make decisions that are sound and informed, their likelihood of reaping higher returns are increased. This, in turn, safeguards their interests as well as the businesses offering the products,” affirmed Mr. Bakhda.