Singapore opens up corporate bonds to retail investors

Added 20th May 2016

Corporate bond issuers in Singapore will find it easier and cheaper to tap into the retail market after the country’s monetary authority (MAS) introduced two new regulations that will open up corporate bond offerings to retail investors.

Singapore opens up corporate bonds to retail investors

Traditionally, corporate issuers look to the wholesale bond market to meet their funding needs due to the higher costs involved dealing with the retail market.

From 19 May, however, they will be able to issue plain-vanilla bonds through two new frameworks.

Seasoned offering

Under the Bond Seasoning Framework, wholesale bonds that meet eligibility criteria stipulated by the Singapore Exchange (SGX) can be offered to retail investors after the bonds have been listed on SGX for six months.

SGX currently lists 1,900 wholesale bonds which are only available in large denominations of at least S$200,000 (£99,193, $144,847, €129,175), and/or offered to institutions or accredited investors.

These 'seasoned' bonds can be re-denominated into smaller lot sizes, as low as S$1,000, and offered to retail investors on the secondary market.

Eligible issuers can also offer additional bonds to retail investors on the same terms as the 'seasoned' bonds without a prospectus.

Higher criteria

Under the Exempt Bond Issuer Framework, issuers that satisfy specified thresholds that are higher than the eligibility criteria under the Bond Seasoning Framework can offer bonds directly to retail investors at the start of an offer without a prospectus.

Wider options

The changes form part of MAS’ overall efforts to widen the investment options available to retail investors through better access to simple investment products that are relatively less risky. 

As an additional incentive for eligible issuers under the Bond Seasoning Framework and Exempt Bond Issuer Framework, Singapore’s minister for finance will grant a tax deduction of up to two times to qualifying retail bond issuers for issuance costs attributable to such retail bonds.

The tax concession will be available for five years and will take effect from 19 May 2016.

Loh Boon Chye, chief executive of SGX said: “Retail investors are greatly interested in fixed income investments. The frameworks will widen the range of fixed income products and enable retail investors to access some of the 1,900 wholesale bonds listed on SGX, Asia’s leading bond-listing platform. Issuers too will gain from a bigger pool of investors.”

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address


Regulatory landscape changes in the Middle East

Sponsored by Old Mutual International

Regulatory landscape changes in the Middle East...

Brendan Dolan, Regional Director, Middle East and Africa for Old Mutual International, talks about how the group is working with advisers as the regulatory landscape...

Square Mile Research

Matthews Pacific Tiger Fund
Matthews Pacific Tiger Fund...

Talking Factsheets is a video service for users...

About Author

Kirsten Hastings

Senior Reporter

Kirsten is a senior reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2015 after two years working as a reporter covering the staffing and recruitment industry. Kirsten has a Masters in Financial Journalism from the University of Stirling. 


The turning tide of global equities

The turning tide of global equities

Despite a gloomy beginning to the year, global equities have started to outshine the backdrop of economic malaise that threatened their upward trajectory, with the index delivering 19.2%




Ashburton International
Ashburton International

Ashburton Investments is a new generation investment...



Offshore Bond Workshop Glasgow 2016
Offshore Bond Workshop Glasgow 2016

22nd November 2016
The Grand Central Hotel, Glasgow

Future Advisory Forum Dubai 2016
Future Advisory Forum Dubai 2016

23rd November 2016
Shangri-La Hotel, Dubai 

Sponsored Content

Investment Strategy