The Monetary Authority of Singapore (MAS) has proposed new measures to improve investor disclosures and simplify regulatory requirements for complex financial products, in a move aimed at balancing self-directed investing with protections for vulnerable consumers.
The consultation paper, published on July 1, outlines enhancements to Product Highlights Sheets (PHS) and a revamp of the complex products framework, first introduced in 2012.
MAS is seeking public feedback on the proposals until September 1, 2025.
Under the proposed changes, financial institutions will be required to adopt revised PHS templates to help investors better understand investment products such as shares, bonds, and units in collective investment schemes.
The redesigned PHS will feature key product details on the first page, use a question-and-answer format to engage readers, and include prominent red labels to flag complex products.
Investment-Linked Policies (ILPs), previously excluded, will now require a PHS.
MAS said the changes are part of its broader aim to make the disclosure-based regime more effective in helping retail investors make informed decisions, while ensuring targeted intervention for those who need added assistance.
In parallel, MAS is proposing to streamline distribution safeguards for complex products.
Currently, retail investors lacking sufficient knowledge or experience are required to either complete an educational module or obtain mandatory financial advice.
MAS now intends to remove the mandatory advice requirement for most investors, provided clear disclosures and risk warnings are in place.
However, “Selected Clients”, such as older individuals or those with low education or limited English proficiency, will continue to receive extra protections, including mandatory advice and a follow-up confirmation process.
To further support informed investing, MAS will introduce a new Product Knowledge Assessment (PKA), allowing investors to self-assess their understanding of a complex product’s features and risks.
This complements existing criteria based on academic or professional qualifications.
The regulator said that investor awareness has improved over the past decade, especially with digitalisation enabling easier access to investment platforms and information.
However, MAS stressed the importance of maintaining safeguards for segments of the population that may remain vulnerable.
The proposed reforms are part of MAS’s ongoing review to ensure financial regulations remain fit for purpose in a rapidly evolving investment landscape.