Bringing you live news and features since 2006 

EIP change will provide easier access to ETFs, says SGX


Regulatory amendments to Singapore’s Excluded Investment Products (EIP) definition for collective investment schemes will bring easier access to Exchange Traded Funds (ETFs) and help retail investors build a well-diversified investment portfolio.

That’s according to the Singapore Stock Exchange (SGX) which says that the ETFs to be converted to EIP will be predominantly cash-based, ie, the funds will buy into the underlying securities to track the benchmark indices. SGX expects a total of up to 20 EIP ETFs to be accessible for retail investors without enhanced safeguards. As an example, a newly converted ETF to the EIP status on SGX is Asia’s most liquid SPDR Gold ETF, which investors can also use to invest their CPF funds.
“With the scope of EIP ETFs expanded, retail investors have improved options for simple and low-cost method of diversification. Investors should take the time to understand the rewards and risks associated with ETFs so that they can secure long-term returns in this product class,” says Lim Kok Ann, Chief Executive Officer, DBS Vickers Securities.
As always, to ensure that investors understand products offered on the exchange, SGX will be implementing several new initiatives to boost investors’ understanding of ETFs, starting with the launch of a new SGX ETF investor guide, and  complimentary ETF seminars organised on a monthly basis, through the SGX Academy.  In addition, there are many platforms for investors to obtain more information online, including MoneySENSE, SPDR University and SGX MyGateway.
Lynn Gaspar, Head of Retail Investors, says: “We’re more than happy to support this industry-wide initiative to promote awareness of ETFs as a smart retail investment product, and have developed retail investor friendly information and programs for investors to learn more about how ETFs can improve their returns and diversify away risk.”
Hon Cheung, Managing Director of ETF provider State Street Global Advisors, says: “ETFs are a powerful tool allowing retail and institutional investors to directly access market opportunities from blue chips to other asset classes in a single, cost-effective trade on the exchange. As ETFs generally hold a basket of stocks tracking an index, for e.g., the STI, investors are able to reduce concentration risk over holding single stocks.”
To further promote ETFs as investment products, SGX will waive ETF clearing fees for both institutional and retail investors for a promotional period of 1 June 2015 to 31 December 2015. In order to encourage institutional investors to report over-the-counter ETF transactions to the exchange for greater transparency, SGX also announced in January 2015 a longer-term initiative to waive clearing fees for ETF block trades for a period of about three years – between 2 February 2015 to 31 December 2017. This would help institutional investors minimise the cost of reporting whilst reducing their counterparty risks.
Chew Sutat, Executive Vice President of SGX, says: ”SGX is supportive of MAS's rule amendments on EIP definition. We expect to see several ETFs converting to EIP status over the course of the next few weeks, giving investors better access to international markets and other asset classes. SGX will be leading the way in investor education and lowering cost of accessing ETFs, and we look forward to ETF issuers, brokers, wealth managers and banks joining us in bringing more collective benefits to investors”.

Latest News

US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Lorraine Sereyjol-Garros, BNP Paribas
Following changes to the French Monetary and Financial Code and of the French market authority AMF’s General Regulation, it is...
Ed Rosenberg, Texas Capital
Texas Capital Bank first opened its doors back in December 1998 and nowadays offers wealth-management services, as well as commercial,...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by