MAS Proposes Changes to Aid Decisions in Investment

Investors will be able to make their own informed choices or decide to seek advice

- Chor Khieng Yuit

The key features and risks of investment products such as shares, bonds and unit trusts will be placed on one page rather than dispersed throughout their highlights document, under a proposal by the Monetary Authority of Singapore (MAS).

This is one of the changes MAS is looking to introduce as it seeks to enable investors to make informed choices on their own, even as others who need more assistance will still be able to seek financial advice before they make any investment.

The MAS is seeking feedback in two areas.

The first is on its plans to enhance the requirements for the product highlights sheets in investments such as shares, bonds and units in a collective investment scheme like a unit trust.

The second is on its suggestions to streamline the framework for complex products.

The digitalisation of financial services has enabled investors to invest and manage their own portfolios, MAS noted in its consultation paper on July 1.

Nonetheless, some investors are "less technologically or financially savvy" and they "would be better off seeking financial advice to understand the features and risks of the products they are investing in", the regulator added.

"MAS' objective is to strengthen the effectiveness of a disclosure-based regime for investors to make informed choices on their own, while requiring an appropriate level of intervention for consumers who need more assistance," it said.

The first recommendation pertains to the product highlights sheet.

The MAS is suggesting that the key product characteristics should be summarised on the first page under a new segment titled "What are the characteristics of this product?"

This will put all the key product features and risks on one page, unlike the current practice where they are dispersed throughout the entire product highlights sheet.