Product highlights sheet

• Contains key information such as fees, risks and the worst-case scenario, all in a Q&A format, capped at four pages.

Timely and meaningful ongoing disclosure

• Issuers must provide six-monthly reports, state material changes that may affect the risks and returns, and provide regular bid and redemption prices.

Fair and balanced marketing and advertising materials

• These materials should not suggest that the product is comparable to a bank deposit or that there is no or little risk of the investor losing his investment.

Definition of 'complex investment product'

• A product is defined as complex if there are derivatives embedded in it.

Risk rating

• Introduction of a risk-rating system for products under review so that investors can assess their suitability.

Mandatory advice

• Complex investment products can be sold only when accompanied by advice telling customers about their nature and risks.

Complex product warning

• This will go on all materials accompanying such products to alert investors to seek advice.

Cooling-off period

• There will be a seven-day cooling-off period for structured notes to allow investors to reconsider their decisions and exit without incurring sales charges.

LORNA TAN

This article was first published in The Straits Times.