SINGAPORE: Starting on Wednesday (Apr 29), ordinary investors can expect easier access to a wider range of investment products, including several exchange-traded funds (ETFs) listed on the Singapore Exchange (SGX).
The change is in line with broader efforts to expand the range of simple, low-cost investment options available to retail investors, the Monetary Authority of Singapore (MAS) said in a statement.
Previously, all investment funds that used derivatives were classified as Specified Investment Products (SIPs), which can only be sold to retail investors with enhanced safeguards, including an assessment of the investors’ investment knowledge or experience.
But with the change, fund managers will be able to reclassify investment products that make limited use of derivatives and are less complex as Excluded Investment Products (EIPs). Retail investors can access EIPs more easily as financial institutions no longer have to first assess their investment knowledge or experience.
SGX said several ETFs are likely to reclassified as EIP in the next few weeks. This, it said, will provide ordinary investors with a simple and low-cost way of building a well-diversified portfolio.
SGX will also waive ETF clearing fees for both institutional and retail investors from Jun 1 to Dec 31 to further promote the use of this investment product.
ETFs are low-cost investment products that track the performance of an underlying bundle of securities such as the 30 stocks that constitute the Straits Times Index. They can also be used to track the price of gold and other commodities.