SGX

SGX: MAS is introducing three broad initiatives to widen the range of simple and low-cost investment options for individual investors to achieve their retirement objectives.

These are:
1) Improve the availability of corporate bonds
2) Enhance retail access to Exchange Traded Funds (ETFs)
3) Introduce a new Singapore Savings Bond (SSB)

To make plain vanilla corporate bonds more readily available to Singapore retail investors, the MAS and SGX will ease the financial and administrative costs for issuers seeking to tap the retail market.

Under a proposed bond seasoning framework, eligible corporate issuers which meet certain criteria such as size, listing track record and credit profile will be able to re-size wholesale bonds into smaller sizes after a six-month seasoning period and offer to retail investors on SGX.

MAS will also allow issuers which satisfy more stringent criteria to offer bonds directly to retail investors without need for a prospectus and seasoning period.

The second initiative will reclassify less complex ETFs which make limited use of derivatives, into EIPs from the current SIP status, to expand retail participation. This will take effect from Apr ‘15.

Thirdly, MAS will launch a new type of Singapore Government Securities for individual investors - Singapore Savings Bonds (SSB). SSBs will be principal guaranteed and will offer stepped-up coupons linked to SGS interest rates with no penalty for early redemption. It will thus combine the features of higher returns of a long-term bond, flexibility of a short-term deposit, and safety of a sovereign instrument.

With more equity products to attract retail investors, SGX is likely to see increased trading activity, particularly in corporate bonds and ETFs, in 2H15.