Monetary Authority of Singapore finalises enhanced product highlights sheets and makes financial advice optional for most complex products

The Monetary Authority of Singapore has published its response to consultation feedback and confirmed a shift to a more disclosure-based regime for complex products. MAS will remove the mandatory financial advice requirement for most complex products, while keeping stronger protections for investors who require additional support. It will also enhance Product Highlights Sheets and related distribution safeguards to improve how key product features and risks are presented to retail investors. The revised framework introduces clearer Product Highlights Sheet disclosures and clearer labelling for complex products. Investment-Linked Policies will now require a Product Highlights Sheet and will be classified as complex products. MAS will also introduce pre-transaction alerts for complex products. Investors who fail the Customer Knowledge Assessment must be alerted that complex products may not be suitable for them, while all investors must be reminded that the product is complex and that they should review product documents carefully and take a learning module or seek financial advice where needed. Investors who have traded in complex products during the month may opt to receive a streamlined version of the alert for subsequent transactions. For investors requiring additional protection, safeguards retained include mandatory financial advice for those without adequate investment experience and knowledge in complex products, accompaniment by a trusted individual during the sales and advisory process, and pre-transaction call-backs by financial institutions to check product understanding. MAS said legislative amendments to implement the changes will be consulted on at a later date.