MAS Issues Second Part of Response to Feedback on Proposals to Strengthen the Regulation of the Sale and Marketing of Unlisted Investment Products

On 28 January MAS issued the second part of its response to public feedback on its Proposals to Strengthen the Regulation of the Sale and Marketing of Unlisted Investment Products which was issued in March 2009.

The second part of MAS’ response focuses on

• introducing a definition of  "complex investment products", risk rating of retail investment products, mandatory advice for the sale of complex investment products, and “health warnings” for complex investment products;
• remuneration structures for the sale of investment products;
• appointing an approved trustee for unlisted debentures; and
• strengthening MAS' powers to investigate and take regulatory actions 

Full details of the second part of the response can be found on the MAS website or with the following link Second Part of Response

In their response, MAS has largely not proceeded with the original proposals. They have instead issued another consultation paper. The main exception to this is the appointment of an approved trustee for unlisted debentures. In its response MAS says ”Accordingly, we will proceed with the requirement for issuers of unlisted debentures, where the offers require a prospectus to be issued, to appoint a trustee. MAS considers that the same requirement should also apply to all listed debentures as there is a similar need for a trustee to take actions on behalf of the individual retail debt holders involved. In addition, where the debentures are issued by SPVs or are secured on collateral, we will require the appointed trustee to be based in Singapore” MAS has however, given some relief from the ‘approved trustee’ requirement.

MAS have also reviewed its powers and will be consulting further, especially with regard to the civil liability provisions of the SFA