Retail investors can now buy wholesale bonds

A LONG-DISCUSSED bond seasoning framework came into effect on the Singapore Exchange (SGX) on Thursday, giving retail investors the opportunity to buy certain bonds that were initially meant for institutions and accredited investors.

The framework, which went through public consultation in September and December 2014, will allow investors to buy wholesale bonds in denominations as small as S$1,000 if the bonds have been listed on SGX for at least six months. Issuers of such bonds must meet certain criteria relating to size, track record and listing history.

The framework also provides for re-taps, in which an issuer issues additional notes under an existing tranche without the need for a prospectus, as long as the six-month seasoning period is met.

At the same time, the Monetary Authority of Singapore (MAS) announced the Exempt Bond Issuer Framework, which allows issuers to offer bonds directly to retail investors at the onset without a prospectus if they meet eligibility criteria that are stricter than those used in the seasoning framework.

"The frameworks will widen the range of fixed income products and enable retail investors to access some of the 1,900 wholesale bonds listed on SGX," SGX chief executive Loh Boon Chye said in a statement. "Issuers too will gain from a bigger pool of investors. This initiative advances SGX's efforts to build a dynamic and thriving fixed income market in Singapore."