“The MAS complex products regime was first put in place in 2012 following the global financial crisis, in line with developments internationally to enhance investor protection. Financial innovation has since led to an increasing number of investment products with more complex risk-return profiles being manufactured and marketed to retail investors. Access to a wider range of products is beneficial to investors, as it provides them with more options to direct their investments according to their investment objectives. However, with increasing product complexity, investors may face difficulties in understanding the risk-return profile of a product, and how their expected payoffs will vary under different scenarios.
The proposals cover – (i) the classification of collective investment schemes, debentures, perpetual securities and preference shares as either EIP or SIP; and (ii) the distribution safeguards that apply to the sale of SIPs.” – extract from consultation paper.