Singapore, 23 December 2014... The Monetary Authority of Singapore (MAS) today issued a response to feedback received on the consultation paper on facilitating bond offerings to retail investors published on 1 September 2014. In tandem with MAS’ consultation paper, the Singapore Exchange (SGX) had separately published a consultation paper on a proposed bond seasoning framework. Today, the SGX also released its response to feedback received on its consultation paper.

2   MAS thanks all respondents for their feedback. Respondents generally supported the initiatives to make it easier for retail investors to buy bonds. MAS has taken into account the feedback received and will propose legislation to implement the policy proposals. SGX will be making refinements to the seasoning framework which are set out in its consultation response available on the SGX website .

3   MAS will proceed with the following proposals to make it easier for corporates to offer bonds to retail investors while maintaining sufficient safeguards:

• Under the bond seasoning framework, wholesale bonds¹ issued by eligible issuers without a prospectus can now be offered to retail investors after the bonds have been listed for six months (seasoned bonds). Currently, such bonds are only available to institutional and accredited investors or in large denominations of at least S$200,000. Seasoned bonds can be re-denominated into smaller lot sizes and made available to retail investors via secondary trading. Eligible issuers under the seasoning framework will also be exempted from the prospectus requirement for additional offers of new bonds to retail investors with the same terms as the seasoned bonds.
• In addition, bonds issued by issuers that satisfy specified thresholds that are higher than the eligibility criteria under the seasoning framework, can be offered directly to retail investors at the start of an offer without a prospectus. This provides an avenue for retail investors to acquire bonds directly from an issuer at the onset, without having to wait for six months for the bonds to be seasoned.

4   Based on the eligibility criteria, about 120 issuers in Singapore can potentially issue bonds under the seasoning framework, of which about 60 will be able to offer bonds directly to retail investors at the start of an offer without a prospectus.

5   To safeguard retail investors’ interests, only plain vanilla unsubordinated bonds with a maximum tenor of 10 years can be offered under the prospectus exemptions. Issuers will also be required to provide key information on the risks and features of the bonds to investors in a product highlights sheet. Further details are set out in the response to feedback received on the public consultation.

6   MAS intends to grant the prospectus exemptions by way of regulations. Interested parties may submit their comments on the draft regulations (371 KB) by 23 January 2015.

¹ Wholesale bonds refer to bonds that are offered only to institutional and accredited investors or in large denominations of at least S$200,000. Such offers are exempted from prospectus requirements under sections 274 and 275 of the Securities and Futures Act (Cap 289).