Singapore MAS Chairman Gan Kim Yong on Accredited Investor (AI): 1) Eligible Investors Required to Opt In, 2) All Financial Institutions Must Treat All Customers Fairly & Accord Full Range of Safeguards Including Assessing Investors Knowledge & Experience, 3) Financial Institutions Required to Explain to Accredited Investor Who Opt In of Forgoing Safeguards, 4) Fair Dealing Guidelines Updated in 2024 Regardless of AI Status, 5) S$1 Million Limit on Primary Residence Counting Towards Value of S$2 Million Net Personal Asset Assessment
6th February 2025 | Hong Kong
Singapore Deputy Prime Minister & Monetary Authority of Singapore (MAS) Chairman Gan Kim Yong reply to Singapore Parliamentary question (5/2/25) on Accredited Investor (AI): 1) Eligible investors required to opt in, 2) All financial institutions must treat all customers fairly & accord full range of safeguards including assessing investors knowledge & experience, 3) Financial institutions required to explain to accredited investor who opt in of forgoing safeguards, 4) Fair dealing guidelines updated in 2024 regardless of AI status, 5) S$1 million limit on primary residence counting towards value of S$2 million net personal asset assessment. Gan Kim Yong (5/2/25): “Section 4A of the Securities and Futures Act 2001 sets out the asset and income thresholds for an individual to become eligible for accredited investor (AI) status. The AI eligibility criteria were last updated in 2018 to introduce a S$1 million cap on the value of an individual’s primary residence that could be used in the net personal asset assessment. It also requires investors who meet the eligibility criteria to expressly opt in before they can be treated as an AI by a financial institution. Regardless of an individual’s net worth, financial institutions must, in the first instance, treat all customers as retail investors and accord them the full range of safeguards. This means that financial institutions must comply with prescribed product disclosure requirements and assess the investor’s investment knowledge and experience before recommending products that may be more complex in nature. Beyond this, investors who meet the AI eligibility criteria may be offered the option to become AIs, which will avail them to a larger suite of products and services but will not avail them to the same level of regulatory safeguards as retail investors. These investors must choose to become AIs, and financial institutions are required by regulation to explain clearly to them the safeguards they will forgo when opting to be an AI. Under the Fair Dealing Guidelines that MAS recently updated in May 2024, financial institutions are also expected to consider a customer’s profile, risk tolerance, and financial knowledge, regardless of his or her AI status, to assess whether a product is suitable for the customer before making a recommendation. Nonetheless, regulatory safeguards are not a substitute for investor responsibility. All investments carry risks, and investors are advised to engage only with products they fully understand and that align with their risk tolerance.” [Accredited Investor Criteria in Singapore: Minimum income of S$300,000 in the last 12 months, or Net personal assets exceeding S$2 million (Net value of primary place of residence limit at S$1 million; or Net financial assets exceeding S$1 million or Hold a joint account with an Accredited Investor (transaction via joint account)]
“ Singapore MAS Chairman Gan Kim Yong on Family Offices: 2,000+ Single Family Offices Awarded Tax Incentives & Hired 2,200 Singapore Citizens & Permanent Residents “
Accredited Investor Criteria in Singapore:
- Minimum income of S$300,000 in the last 12 months, or
- Net personal assets exceeding S$2 million (Net value of primary place of residence limit at S$1 million; or
- Net financial assets exceeding S$1 million or
- Hold a joint account with an Accredited Investor (transaction via joint account)
Singapore MAS Chairman Gan Kim Yong on Family Offices: 2,000+ Single Family Offices Awarded Tax Incentives & Hired 2,200 Singapore Citizens & Permanent Residents
Date: For Parliament Sitting on 5 February 2025
Name and Constituency of Member of Parliament
Mr Melvin Yong Yik Chye, Radin Mas SMC
Question:
To ask the Prime Minister and Minister for Finance (a) when were the definitions of specific classes of investors as specified under section 4A of the Securities and Futures Act 2001 last reviewed; and (b) in the past three years, whether MAS has received feedback that an individual’s eligibility as an accredited investor should be premised on relevant knowledge, in addition to the individual’s net worth.
Answer by Mr Gan Kim Yong, Deputy Prime Minister and Minister for Trade and Industry, and Chairman of MAS:
1. Section 4A of the Securities and Futures Act 2001 sets out the asset and income thresholds for an individual to become eligible for accredited investor (AI) status. The AI eligibility criteria were last updated in 2018 to introduce a S$1 million cap on the value of an individual’s primary residence that could be used in the net personal asset assessment. It also requires investors who meet the eligibility criteria to expressly opt in before they can be treated as an AI by a financial institution.
2. Regardless of an individual’s net worth, financial institutions must, in the first instance, treat all customers as retail investors and accord them the full range of safeguards. This means that financial institutions must comply with prescribed product disclosure requirements and assess the investor’s investment knowledge and experience before recommending products that may be more complex in nature.
3. Beyond this, investors who meet the AI eligibility criteria may be offered the option to become AIs, which will avail them to a larger suite of products and services but will not avail them to the same level of regulatory safeguards as retail investors. These investors must choose to become AIs, and financial institutions are required by regulation to explain clearly to them the safeguards they will forgo when opting to be an AI.
4. Under the Fair Dealing Guidelines that MAS recently updated in May 2024, financial institutions are also expected to consider a customer’s profile, risk tolerance, and financial knowledge, regardless of his or her AI status, to assess whether a product is suitable for the customer before making a recommendation. Nonetheless, regulatory safeguards are not a substitute for investor responsibility. All investments carry risks, and investors are advised to engage only with products they fully understand and that align with their risk tolerance.
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