Singapore's New Accredited Investor Regime

Since 8 October 2018, many within the financial services industry have been struggling to understand the finer aspects of the new regime, recalibrate their client on-boarding policies and procedures to account for the new requirements, and hopefully have the entire effort completed on or before 8 January 2019

- Eric Chan

The regulatory landscape in Singapore is undergoing a significant change in terms of the way sophisticated investors are being defined. This is happening in phases, with the key milestone dates being 8 October 2018 and 8 January 2019. While the changes were not in themselves unanticipated, nevertheless, some of the details did take many financial institutions by surprise.

The changes relate to the term “accredited investors” as used in Singapore’s Securities and Futures Act (“SFA”) and in the Financial Advisers Act (“FAA”). Together, these two laws establish the overall framework under which the Monetary Authority of Singapore (“MAS”) regulates the capital markets industry in Singapore.

The term “accredited investor”, together with the term “institutional investor”, is employed largely within the SFA and FAA to refer to persons (corporate or individuals) of some degree of sophistication in matters of investments (as distinct from retail investors) and who thus require lesser protection from the regulatory regime. The term “institutional investor” refers largely to financial institutions and sophisticated investment organizations and will not be discussed in this article.