What is an accredited investor in Singapore?
An accredited investor is an individual or business who is qualified to invest in a wider selection of investment products. These products are usually more complex and can also be referred to as unregistered, private securities offerings not usually available to retail investors. For example, shares in new businesses that are not yet public, or products missing the usual standard of regulatory disclosures.
As this level of investing is more high-risk, to be an accredited investor in Singapore you must meet the requirements set out by the Monetary Authority of Singapore (MAS), which we will review below.
The accredited investor regime in Singapore
Different countries have their own criteria to qualify as an accredited investor. The MAS applied legislative amendments to enhance regulatory safeguards for investors in 2018, which means in Singapore the introduction of an opt-in regime enables investors to specifically provide consent and opt in to be an accredited investor status.
Consent, or the ability to opt out can be provided in writing if they change their mind.
The rules that apply consider an individual’s income and assets, with some of the requirements including proof of income over the past 12 months equal to or above SGD300,000, or their financial assets, as a whole outside of any liabilities, must exceed SGD1 million (or its equivalent in a foreign currency).
Who can become an accredited investor?
There are rules in place to ascertain who can become an accredited investor, most of which require an individual to have a certain level of income or assets to be considered.
They must demonstrate both satisfactory financial knowhow and capital, as they will be dealing with a riskier and more sophisticated market of investment products. In simpler terms, they must have the resources to operate as an investor at this level and be prepared for the risks involved.
How to qualify to become an accredited investor in Singapore
The rules differ for becoming an Accredited Investor depending on whether you are an individual, corporation or trust.
Individuals must qualify for one out of the three requirements below:
- Their financial assets, as a whole outside of any liabilities, exceed SGD1 million (or its equivalent in a foreign currency); or
- Proof of income over the past 12 months must not be less than SGD300,000 (or its equivalent in a foreign currency); or
- Their net personal assets exceed SGD2 million (or its equivalent in a foreign currency), of which the value of the individual’s primary residence (net of any secured loan) can only contribute up to SGD1 million.
What documents will I need to provide?
If you are looking to become an accredited investor in Singapore you will need the following:
- Bank statements
- Statement from Central Depository (Pte) Ltd revealing personal assets
- Titles and deeds
- Housing loan statement
- Salary slip
- Letter from employer certifying individual’s income over the prior 12 months required
For the interest of further reading, we share this document from the MAS that shares detailed information and FAQ’s you may find useful:
Financial planning and advice for accredited investors
When it comes to investing at a high-level, it is important to work with a professional team of experts to guide you through the market. The focus of our experienced team in Singapore is to help you create a strategy with suitable investments and pension planning that meet your short and long-term financial goals.
Our financial planners hold the highest standards of professional qualifications, and pride themselves in providing trusted and transparent advice to help you discover ideal solutions and create the best investment journey for you.
If you are interested in hearing more about how we can help you manage your wealth, please get in touch.
This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale.
This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy or investment product.
Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.
If you are unsure about the suitability of otherwise of any product or service, we recommend that you seek professional advice.
Past performance is no guarantee of future performance.
The value of an investment and the income from it can fall as well as rise and investors may get back less than they invested. Your capital is therefore always at risk. It should be noted that stock market investing is intended for the longer term.
