SGX Proposes Greater Retail Access To Bonds

Singapore Exchange (SGX) is consulting the public on a proposal to give retail investors improved access to bonds currently offered only to institutional and accredited investors (“wholesale bonds”).

Leveraging on Singapore’s position as a leading listing venue for bonds with its AAA long-term credit rating and robust regulatory framework, the proposed framework will improve access in two ways.  First, retail investors can purchase SGX-listed wholesale bonds initially denominated in S$200,000 or above in smaller lot size six months after their listing (“seasoned bonds”). Second, SGX proposes to allow issuers to make subsequent offers of new bonds on the same terms as the seasoned bonds to retail investors directly.  Eligible issuers will be able to offer bonds more efficiently to retail investors through this framework.

SGX proposes to apply the regulatory framework only to plain vanilla bonds with an initial minimum principal amount of S$300 million and a maximum tenure of 10 years. Safeguards in the form of qualifying criteria for issuers and disclosure requirements underpin the proposed framework. (Please see Annex A for issuers’ qualifying criteria.)

In a separate public consultation, the Monetary Authority of Singapore (MAS) is proposing prospectus exemption for eligible issuers (i) offering plain vanilla bonds and (ii) making subsequent offers of bonds on the same terms as seasoned bonds.

SGX’s public consultation paper can be viewed here. 

MAS’ four-week public consultation can be seen here.

SGX invites comments on its Consultation Paper until 30 September 2014 via: