MAS reforms reveal gaps in current investor protection rules

MAS confirmed it will proceed with legislative amendments aimed at enhancing pre- and post-transaction safeguards for retail clients.

The Monetary Authority of Singapore (MAS) is stepping up investor protection rules whilst also pushing to broaden retail investor access to private market funds, in a dual move that reflects the evolving landscape of personal finance and asset management in Singapore.

In its latest response to industry feedback, MAS confirmed it will proceed with legislative amendments aimed at enhancing pre- and post-transaction safeguards for retail clients.

Key changes include tighter definitions and requirements around “selected clients” (SCs) — individuals who may need extra protection based on age, education level, or language proficiency.

Under the revised rules, financial advisers must make a holistic assessment of a client’s knowledge and experience before recommending investment products. Relying solely on standard checklists or self-declared experience is no longer sufficient.

The framework also introduces a “Trusted Individual” (TI) provision for SCs. Advisers must ensure SCs are accompanied by a TI—someone over 21 with sufficient language skills and education—unless the client formally declines in writing.

MAS clarified that advisers will not need to perform anti-money laundering checks on TIs, but they must ensure the TI can help the client understand the products discussed.

Additionally, advisers are now required to rectify any failure in non-sales-related performance metrics before executing a transaction. If a product is found unsuitable during pre-checks, clients must be offered the chance to cancel or modify the trade.

Meanwhile, MAS also announced a proposed regulatory framework to allow retail investors to access private market investment funds—a move praised by Moody’s Ratings as aligning with similar trends in the US and Australia.

“These investment funds may differ in structure and liquidity from traditional public market vehicles, as they involve private assets requiring a long-term investment horizon,” said Sally Yim, Managing Director at Moody’s Ratings.