35 MAS issued a consultation paper earlier this week with proposals on the safeguards for retail investors in unconventional investment schemes. Let me elaborate here on our thinking and rationale. 36 Many retail consumers have ventured into unconventional and unregulated financial products promising higher yields. But these products may also entail risks that are not well understood by retail investors. MAS has therefore decided to extend to these unconventional products regulatory safeguards that apply to capital markets. 37 In extending boundaries of regulation, we are guided by the need to balance costs and benefits. •  If we take too broad-brush an approach, we could end up regulating all commercial arrangements involving some form of investment return. For example, buying gold jewellery or piece of art that could appreciate in value over time. This will only add to costs without advancing consumer interests. •  But if we craft the regulatory framework too narrowly, products may be deliberately structured to fall outside the regulatory perimeter. For example, restricting regulation to land-banking arrangements will fail to capture other schemes operating on similar premises, such as investments in ostrich farms or in plantations. 4  BIS central bankers’ speeches  38 Therefore, taking into account market developments in Singapore, MAS will selectively enhance regulatory safeguards for retail investors in buy-back arrangements involving precious metals, which has the same economic effect as borrowing cash from customers; and collectively managed investment schemes. The latter includes land-banking and forestry schemes.
47 MAS is enhancing standards for FA industry in a few ways. •  We are raising admission and ongoing requirements for FA firms. These requirements will be in place in 2015. BIS central bankers’ speeches  5  •  We have also set higher minimum academic entry requirements for FA representatives with effect from 1 February 2014 and will mandate minimum hours of continuing professional development training for them in 2015. •  MAS will also implement in 2015 a balanced scorecard remuneration framework that will recognise FA representatives and their supervisors for providing good quality advice. 48 Ultimately, consumers must take responsibility for their financial decisions. But MAS will continue to work with the industry and other government agencies to enhance financial literacy among Singaporeans so that they can take sound financial decisions. MoneySENSE, the national financial education programme, is the centrepiece of this effort. We seek the media’s support and partnership in this effort so that we can reach out to all Singaporeans. Another good year for Singapore’s financial centre 49 Moving on to our financial sector, Singapore’s financial centre continues to perform well. Financial and insurance services grew by 10.8% last year. Four segments are worth highlighting. 50 Asset management. Assets under management (AUM) grew close to 12% to reach $ trillion in 2013. Growth was broad-based – both traditional as well as alternative managers like hedge funds and private equity players registered good increases in AUM. 51 Foreign exchange and derivatives.