Banks unfazed by stricter rules for defining accredited investors

Singapore

BANKS are sanguine about their wealth business ahead of new rules defining who qualifies to be truly rich, saying the impact of these rules is not going to be significant.

In a bid to protect retail investors, the Monetary Authority of Singapore (MAS) is tightening the rules that define accredited investors (AIs).

AIs are considered to be better informed or able to access resources to protect their own interests. Being sophisticated investors, they can access a wider range of products such as bonds with a minimum tag of S$250,000, which are not sold to the mass market. AIs are also typically first in line to get allocations for hot initial public offerings.

The main change about who qualifies to be an AI is the tightening of the current S$2 million net personal assets threshold in such a way that the value of an individual's home can contribute only up to S$1 million of this threshold. MAS is also introducing an opt-in regime where those who meet the income threshold will have to make a conscious decision to opt in to the AI status, bearing in mind the regulatory safeguards they would fo…