If you’re considering investing in wholesale bonds, it’s crucial to understand the potential impact on regulatory protection. Here are key points to consider before making your investment:

1. Exemption for Large Denominations: When issuers make offers with denominations of $200,000 or more, they are not required to register a prospectus with MAS (Monetary Authority of Singapore).
2. Limited Regulatory Protection: Investing in such offers means you won’t have access to certain regulatory safeguards that are typically available to retail investors.
3. Safeguards under the FAA: However, if the financial institution provided you with financial advice before investing, you may still have some protection under the Financial Advisers Act (FAA).
4. Accredited Investor Declaration: If you declare yourself as an accredited investor, the financial institution is not obligated to provide you with advice or disclosure.

Understanding the Rules for Large Denominations

Wholesale bonds are specifically targeted at institutional and accredited investors or offered in larger denominations of at least $200,000. Issuers making such offers, including perpetual securities, are exempted from the requirement to register a prospectus with MAS. Consequently, certain regulatory safeguards that protect retail investors, such as criminal and civil liabilities outlined in sections 253 and 254 of the Securities and Futures Act, do not apply to these exempted offers.

As a retail investor contemplating an investment of at least $200,000 in such an issuance, the financial institution you deal with is still obligated to provide you with clear and adequate information, even if a prospectus is not provided. This ensures that you can make an informed decision. If you have any doubts or are unclear about the information provided, it’s essential to inquire further.

Note: If the issuer offers bonds with denominations less than $200,000 to retail investors, the prospectus requirements will apply.

Keep in mind that the provision of information alone does not constitute financial advice, which means the safeguards under the Financial Advisers Act (FAA) may not apply to you. It’s crucial to carefully assess your investment options and seek professional advice when needed to ensure you make informed decisions aligned with your financial goals.

Understanding Consumer Safeguards in Investment Purchases

Consumer safeguards under the Financial Advisers Act (FAA) are contingent upon whether financial advice has been provided to you. Here’s what you need to know about when these safeguards apply:

1. Buying with Advice: If a financial institution conducts a financial needs analysis, provides financial advice, and recommends investment products to you, consumer safeguards under the FAA will apply. In such cases, you are protected by the regulations outlined in the FAA.
2. Buying without Advice: Opting to purchase an investment product on an execution-only basis, without receiving financial advice, means that you waive the protection provided by the FAA. In these instances, consumer safeguards do not apply.

Note: It’s important to distinguish between receiving advice and receiving information. The provision of information alone does not constitute financial advice. If you were only given information without any advice, the safeguards under the FAA will not be applicable to your situation.

Accredited Investor Declaration

If you declare yourself as an accredited investor, which requires meeting specific criteria such as having at least S$2 million of net personal assets or earning at least S$300,000 in the previous 12 months, certain considerations apply:

• The financial institution you engage with is not obligated to provide you with advice or disclosure.
• The FAA does not offer safeguards specifically for accredited investors.

It remains crucial for you to conduct thorough due diligence and ensure that any investment product you consider aligns with your investment objectives and financial circumstances.

In the case of exempted offers, the documentation and information provided may vary across financial institutions. Ensure that you receive adequate and comprehensive information to make an informed decision.

Remember to assess your investment options carefully, seek professional advice when necessary, and verify the suitability of the product based on your individual circumstances.