Media Releases
Published Date: 01 September 2014

Making It Easier For Retail Investors To Buy Bonds

Singapore, 1 September 2014... The Monetary Authority of Singapore (MAS) today released a consultation paper proposing changes to facilitate bond offerings to retail investors. In line with this, the Singapore Exchange (SGX) today released a consultation paper on a proposed bond seasoning framework. Under this framework, retail investors will be able to purchase bonds initially offered by eligible issuers to institutional and accredited investors, after these bonds have been listed for six months (seasoned bonds). These issuers will also be able to sell to retail investors without issuing a prospectus, additional bonds with the same terms as the seasoned bonds.

2   In recent years, MAS has observed growing retail interest in fixed income products such as plain vanilla corporate bonds. While there has been a significant increase in the amount of corporate bond issuances in recent years, only a small proportion of such issuances has been available to retail investors. Corporate issuers have mainly targeted institutional and accredited investors in bond offerings and few have tapped the retail market.

3   MAS has identified areas in its regulatory regime that could be streamlined to make it easier for corporates to offer bonds to retail investors while maintaining sufficient safeguards. Currently, any offer of securities to retail investors must be accompanied by a prospectus registered by MAS1. MAS proposes to refine the current prospectus requirements for offers of plain vanilla bonds made by issuers who meet specified eligibility criteria.

4   The proposals will have the following effect:

  • Seasoned bonds issued by issuers that meet eligibility criteria stipulated by SGX under the seasoning framework, can be re-denominated into smaller lot sizes and made available to retail investors via secondary trading. Subsequent offers of new bonds to retail investors, with the same terms as the seasoned bonds, will be exempted from prospectus requirements.
  • Bonds issued by issuers who are able to satisfy specified thresholds that are higher than the eligibility criteria under the seasoning framework, can be offered to retail investors without a prospectus. 

5   To ensure that sufficient safeguards are in place for retail investors, the scope of the proposed prospectus exemptions will be confined to plain vanilla unsubordinated bonds with a maximum tenor of 10 years. Issuers will also be required to provide retail investors with key information relating to the features and risks of the bonds for the offers exempted from prospectus requirements.

6   “These proposals are part of MAS’ overall efforts to improve retail access to simple investment products that give decent returns without too much risk. Low global interest rates have spurred a search for yield, sometimes in risky and unconventional schemes or concentrated investments in property. At the same time, growing financial awareness has spurred demand for a broader range of retail investment products, including for retirement savings. We hope that retail investors will avail themselves of these new investment options,” said Mr Ravi Menon, Managing Director, MAS.
7   The MAS consultation paper is available on the MAS website and comments should reach MAS by 30 September 2014. Interested parties may email their comments to .

8   The SGX consultation paper is available on the SGX website.

1 Offers of securities in the course of secondary trading on the securities exchange are not subject to prospectus requirements. Other offers that are not subject to prospectus requirements include (i) offers made only to institutional and accredited investors, (ii) offers where the minimum subscription amount is at least S$200,000 (or its equivalent in foreign currency), and (iii) offers made by issuers whose shares are listed on the SGX-ST (where offers can be made using an offer information statement, a shorter form disclosure document in lieu of a full prospectus).