SGX Introduces Seasoning Framework Giving Investors Greater Access to Bonds

The framework will enable retail investors to buy wholesale bonds in smaller denominations.

The Singapore Exchange (SGX) has announced that it is increasing the range of bonds available to retail investors with the introduction of the bond Seasoning Framework which is effective as of today.

The framework will enable retail investors to access some of the 1,900 wholesale bonds listed on SGX.

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The framework will enable retail investors to buy wholesale bonds, initially offered to institutions and accredited investors, in denominations as small as S$1,000 six months after the bonds are listed on SGX. Earlier this month, SGX added MSCI China Free Index to its offerings making it more representative of the breadth of equity markets as part of its efforts to extend its range of services.

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The bonds will be offered by issuers who meet a range of criteria relating to their size, track record and listing history. SGX currently lists 1,900 wholesale bonds which are only available in large denominations of at least S$200,000, and offered to institutions or accredited investors.

The eligible issuers can additionally make subsequent direct offers of bonds, called a “re-tap”, to retail investors under the same terms as the existing wholesale bonds without a prospectus, following the six month seasoning period.

Loh Boon Chye, CEO of SGX commented: “Retail investors are greatly interested in fixed income investments. The framework 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. This initiative advances SGX’s efforts to build a dynamic and thriving fixed income market in Singapore.”

In addition to the Seasoning Framework, the Monetary Authority of Singapore (MAS) also announced the Exempt Bond Issuer Framework today. Under this framework, issuers that satisfy thresholds relating to their track record that are higher than the eligibility criteria under the Seasoning Framework can offer bonds directly to retail investors at the onset without a prospectus.

 

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