SINGAPORE will begin to regulate occasionally controversial investment schemes like gold buybacks as capital markets products, and will raise the hurdles for wealthier accredited investors to access those schemes, the Monetary Authority of Singapore (MAS) announced on Tuesday.
The regulatory changes, which will be tabled in Parliament in 2016, will treat precious metals buyback schemes as debentures equivalent to collateralised borrowing.
Collectively managed investment schemes, which are similar to traditional investment funds but do not pool investors' contributions, will be regulated as collective investment schemes. They will not be allowed to be sold to retail investors without MAS authorisation, and will be restricted to investments in securities or other assets that are liquid, like precious metals, or that have stable income, like completed real estate.
The new rules will also require financial institutions to treat new accredited-eligible investors as retail investors by default, meaning that they would not automatically be deemed to be suitable for certain complex investment products. Qualifying investors, however, can opt to change their status to accredited.
An accredited individual investor is a person with net personal assets of at least S$2 million and whose annual income is at least S$300,000. MAS is also planning to limit to S$1 million the amount that a person's primary residence can contribute to the net worth assessment.