The Monetary Authority of Singapore (MAS) has published a further policy consultation paper on proposed enhancements to the regulatory framework for unlisted investment products - including structured products.

It first began consulting on this on 12 March 2009, and focused on promoting "effective disclosure by improving the quality of information available to investors, strengthening fair dealing in the sale and advisory process and enhancing MAS' powers under the Financial Advisers Act".

The MAS issued the first part of its response on 8 September 2009, where it addressed feedback covering:

(a) promoting more effective disclosure, including the introduction of a Product Highlights Sheet, new ongoing disclosure requirements, and restrictions on marketing and advertising materials;
(b) strengthening fair dealing in the sale and advisory process, including enhanced requirements for the due diligence of new products and the advisory process, restrictions on sale without advice, and restrictions on bank teller activities;
(c) introducing the concept of a complex investment product and enhanced competency requirements for representatives selling complex investment products; and
(d) introducing a cooling off period of seven days for unlisted debentures.

This latest publication is the second part of MAS' response. It addresses feedback on the proposals:

(a) regarding the definition of "complex investment products", mandatory advice for the sale of complex investment products, and "health warnings" for complex investment products and risk rating of retail investment products;
(b) regarding remuneration structures for the sale of investment products;
(c) regarding the appointment of an approved trustee for unlisted debentures; and
(d) regarding the strengthening if the MAS' powers to investigate and take regulatory actions.

Under Section 3 of this paper: Proposals to promote more effective disclosure, MAS said it had been working with financial institutions and a workgroup comprising representatives from the financial services industry to develop the proposed format and content of the Product Highlights Sheet. It now intends to widen the application of the Product Highlights Sheet beyond unlisted investment products, which means it will be required for all debentures in the form of asset-backed securities and structured notes (including exchange-traded notes), collective investment schemes (including exchange-traded funds), and sub-funds of investment-linked life insurance policies, for which the offer requires a prospectus to be issued.

The MAS is inviting interested parties to give their views and comments on the proposals contained in the Consultation Paper, and said the consultation period will end on 12 March 2010.