SERVING THE PUBLIC,

ENGAGING STAKEHOLDERS

SERVING THE PUBLIC
FACILITATING RETAIL ACCESS TO SIMPLE LOW-COST INVESTMENT PRODUCTS

Singapore Savings Bonds
MAS launched the Singapore Savings Bonds programme in the second half of 2015. The first Savings Bond was open for public application on 1 September 2015, and issued on 1 October 2015. The public reception has been encouraging, with 32,000 individuals investing S$810 million in Savings Bonds over the first six issuances from October 2015 to March 2016. This represented a significant increase in retail investors' participation in the Singapore Government Securities (SGS) market.

Singapore Savings Bonds are a new type of SGS that offer individual investors a safe, long-term and flexible product to meet their savings and investment needs.

  • Safe: Savings Bonds are fully backed by the Singapore Government. Investors can always get their investment amount back in full with no capital losses.
  • Long-term: Savings Bonds have a term of up to 10 years, and pay interest that increases over time. The longer the savings period, the higher the return.
  • Flexible: Investors may choose to exit their investment in any given month, with no penalties. There is no need to commit to a specific investment period at the start.

MAS will continue with public outreach efforts to generate greater awareness of Savings Bonds.

Facilitating Bond Offerings to Retail Investors
Following public consultations, MAS issued two new regulations on 19 May 2016 to facilitate retail investors' greater access to corporate bonds through the Seasoning Framework and Exempt Bond Issuer Framework:

  • Under the Seasoning Framework, wholesale bonds issued by corporates that satisfy specified eligibility criteria (such as size, listing track record and credit profile) may be re-denominated into smaller lot sizes after the bonds have been listed for six months. Eligible corporates will also be exempted from providing a prospectus for additional offers to retail investors of new bonds with the same terms as the re-denominated bonds.
  • Under the Exempt Bond Issuer Framework, bonds issued by corporates that satisfy even stricter eligibility criteria can be offered directly to retail investors without a prospectus.
  • Issuers using these frameworks would still be required to provide to investors a summary of the key information on the risks and features of the bonds.

These frameworks are part of MAS' overall efforts to give retail investors better access to simple investment products that can be used to build their investment portfolio.

Improve Retail Access to Exchange Traded Funds
In April 2015, MAS made changes to its regulatory framework to allow fund managers to re-classify relatively less complex Exchange Traded Funds (ETFs) which make limited use of derivatives as Excluded Investment Products (EIP). These previously had to be classified as Specified Investment Products and sold to retail investors with enhanced regulatory safeguards, including requirements for intermediaries to first assess their investment knowledge or experience in derivatives. As at April 2016, 85% of the total assets under management of SGX-listed ETFs were classified as EIP-ETFs, which investors can purchase as easily as individual shares.