The bills consist of amendments to the SFA and FAA, according to a statement on the Monetary Authority of Singapore’s website.
The legislation is described as unrelated to the ongoing Financial Advisory Industry Review, unveiled in March at a Life Insurance Association dinner by MAS managing director Ravi Menon, beyond a shared goal of seeking to better protect Singapore’s investors.
The legislation is designed to “increase safeguards for the investing public and to regulate over-the-counter (OTC) derivatives” market, the MAS statement notes.
A requirement that providers of investment products classify their wares on the basis of their complexity, for example, is among the proposed changes. There are also requirements for providers to provide “more effective disclosure” of the products they are selling, and new safeguards to protect individuals investing in unlisted debentures.
The use of the term “capital/principal protected” is to be banned “in all disclosure documents, including product highlight sheets, and advertising materials”, in order to prevent investors from confusing such products with those that are “capital/principal guaranteed”, the MAS notes.
The legislation would also strengthen the MAS’s powers to investigate and take regulatory action.
David Bellingham, chief executive of Professional Investment Advisory Services, said "neither piece of legislation should bother firms like PIAS too much".
"Overall, [the proposals] are positive, [and they show that] the regulator is broadly looking at the industry to raise standards across the spectrum.
“The FAIR review is just another element of that strategy," he added.
The Securities and Futures Act was introduced in 2001, with key elements taking effect the following year.
The Securities and Futures and financial Advisers acts were introduced by the Singaporean government in 2001, as part of its strategy of seeking to raise the standards of local industry practitioners – in this instance, for those involved in the country’s capital markets and retail investment markets.
