The Monetary Authority of Singapore (“MAS”) has announced proposed amendments to the Code on Collective Investment Schemes (the “New CIS Code”) that would give retail investors access to a wider range of new fund products. Two new fund types — futures-based single-commodity funds and single-country government bond funds — would be set out in a new Alternative Funds Appendix. These products differ in kind from the “traditional” funds presently available to the retail market, and the proposals recognise that difference by treating them as a distinct category rather than folding them into the existing framework.
The new funds carry risk exposures that retail investors will not have encountered in conventional retail funds. Chief among them is roll risk — the losses a futures-based fund can incur when rolling expiring contracts into new contracts. Nor do these funds offer diversified exposure: a single-commodity fund is tied to the fortunes of one commodity, which may have a bad spell from time to time. The consultation accordingly places its emphasis on guardrails and on comprehensive disclosure that is more rigorous and detailed than the standard fund disclosure templates. Retail investors must be made aware of the potential intrinsic higher risks of these products as against the “traditional” retail funds.
The criteria for admitting a new fund to the Appendix are similarly deliberate. A fund must comply with the principles of the International Organization of Securities Commissions, and must incorporate the regulatory requirements in the Singapore Securities and Futures Act and the New CIS Code. Whether a comparable product is already offered in foreign financial markets is a further relevant factor that MAS would consider before a fund is included. Financial institutions offering these novel products must also comply with the principles and guidelines set out in the Guidelines on Fair Dealing Outcomes to Customers prescribed by MAS — so the obligation does not end at the point of product approval, but runs through to how the product is sold.
Thomson Reuters Regulatory Intelligence published a report on 23 July 2026 on the proposed Alternative Funds Appendix and the proposed New CIS Code, to which I was glad to contribute. My thanks to Ms Zeng Yixiang of CUBE Regulatory Intelligence for the opportunity to share my thoughts on this latest Singapore market development. Widening the choices available to retail investors while holding disclosure and fair dealing standards firm is a balance Singapore’s framework has consistently sought to strike, and these proposals continue in that direction. The original announcement is available on LinkedIn here.