MAS consults on CIS Code changes to support retail fund innovation

On 9 July 2026, the Monetary Authority of Singapore (MAS) published Consultation Paper P014-2026, proposing amendments to the Code on Collective Investment Schemes (CIS Code) to facilitate fund product innovation for retail investors in Singapore. The consultation is open for feedback until Monday, 10 August 2026.

The proposals represent a meaningful step in broadening the range of investment products accessible to retail investors in Singapore, while maintaining appropriate regulatory safeguards. At a high level, MAS proposes to introduce a new Alternative Funds Appendix to the CIS Code to provide a structured pathway for new fund types that deviate from the existing investment requirements, and to formalise the criteria governing direct amendments to the existing Appendices for fund types that remain broadly aligned with traditional funds. Two new fund types are used to illustrate each route respectively: futures-based single-commodity funds (illustrating the Alternative Funds Appendix) and a wider array of single-country government bond funds (illustrating a direct amendment to the existing Appendix 1).

Background

The CIS Code is structured around two core elements: the Chapters, which set out fundamental management, operational and marketing standards applicable to all authorised schemes; and the Appendices, which contain the specific investment guidelines and borrowing limits applicable to different fund types.

MAS has received increasing industry interest in offering new fund types to retail investors that, while available in other jurisdictions, do not currently comply with the investment requirements set out in Appendix 1 of the CIS Code, most notably its diversification requirements. These fund types therefore cannot be offered to retail investors in Singapore without amendments to the CIS Code. The consultation seeks to address this structural constraint.

The New Alternative Funds Appendix

MAS proposes to introduce a new Appendix 8 to the CIS Code (the Alternative Funds Appendix) to serve as a dedicated regulatory gateway for new fund types that satisfy certain criteria and cannot be authorised for retail offer under the existing investment requirements in Appendix 1. Such fund types may, for example, involve the heavy use of derivatives and/or have undiversified exposures, though the Appendix is designed to accommodate a broader range of novel or non-standard fund structures, assessed case by case against the criteria described below.

The requirement to consult MAS before applying for authorisation of a novel fund type already exists under the current framework. What the Alternative Funds Appendix introduces is a structured and transparent assessment process, under which MAS will evaluate the proposed fund type by reference to three key factors:

• compliance with IOSCO principles as encapsulated in the SFA and the Chapters of the CIS Code, including the fund having sufficiently liquid assets to meet redemptions;
• the listing or offer history of similar products in other jurisdictions; and
• the proposed safeguards, including product-level requirements, enhanced disclosures and distribution controls, to mitigate the risks arising from the novel structure, investment policy or deviation from the existing CIS Code investment requirements.

Once MAS decides to permit a new alternative fund type, it will publish a circular setting out the modified investment requirements and alternative safeguards applicable to that fund type. MAS expects this process to take approximately three months for the first fund of a new type. Once the requirements are established, subsequent funds of the same type will benefit from the standard 21-day authorisation timeline.

Alternative Funds must be clearly labelled as such in their prospectus, product highlights sheet and marketing materials. This is to help retail investors easily distinguish them from traditional funds that comply with the standard Appendix 1 investment requirements.

Greater Flexibility in the Existing Appendices

Not all new fund types will be routed through the Alternative Funds Appendix. Where a new fund type remains broadly aligned with traditional funds, the appropriate route is a direct amendment to the relevant investment requirements in the existing Appendices of the CIS Code. As the CIS Code is a non-statutory instrument, MAS retains the authority to amend its Appendices. What the consultation proposes is to introduce an explicit provision in Chapter 4 of the CIS Code to formalise the criteria MAS will apply when doing so, namely, the three factors set out above: compliance with IOSCO principles, the listing and offer history of similar products in other jurisdictions, and the adequacy of proposed safeguards. This brings greater transparency and predictability to a process that has previously operated on a less structured basis. Once made, any amendment to the investment requirements under the existing Appendices would apply to all authorised funds of that type. This flexibility will not extend to the fundamental management, operational and marketing requirements set out in the Chapters of the CIS Code.

MAS also confirms that it intends to recognise foreign funds that are comparable to new fund types authorised by MAS, including those falling under the Alternative Funds Appendix.

Illustration 1: Futures-Based Single-Commodity Funds

MAS proposes to use the Alternative Funds Appendix to permit futures-based single-commodity funds - funds that invest in futures contracts on a single commodity such as gold, silver, platinum, crude oil or iron ore - for offer to retail investors. Such funds are not currently permitted under the CIS Code, which caps single-commodity exposure to 35% of NAV.

MAS notes that these products are growing in global popularity and are already offered to retail investors in markets such as Hong Kong. They do however present risks that differ from traditional funds, including roll risk (losses when rolling expiring futures contracts into new ones) and undiversified concentration in a single commodity.

The proposed safeguards for futures-based single-commodity funds include:

• Product-level requirements: the fund must track a well-recognised futures price index of the relevant commodity; at least 90% of NAV must be invested in the relevant permitted commodity (gold, silver, platinum, crude oil or iron ore); the fund may only invest in futures listed on an organised exchange; and the fund's global derivatives exposure must not exceed 100% of NAV.
• Naming requirements: the fund name must include the word "futures" (or a derivative of it) and, where exchange-traded, must not use the term "ETF", so as not to be confused with a traditional ETF providing diversified exposure.
• Disclosure requirements: the fund's prospectus must contain clear and prominent disclosure of the futures-based nature of the product and associated risks (including roll risk, leverage and liquidity risks), the concentration risk arising from single-commodity exposure, and the intended target investor segment.

These funds will be classified as complex products₁ and will be subject to the enhanced distribution safeguards under the complex products regime.

Illustration 2: Single-Country Government Bond Funds

MAS also proposes to broaden the range of permissible single-country government bond funds by amending the exception criteria in Appendix 1 of the CIS Code. Currently, the exception to the standard 10% single entity limit for public debt instruments is conditional on the issuing government meeting minimum credit rating requirements (the Credit Rating Requirements).

MAS has received feedback that these Credit Rating Requirements do not meaningfully enhance investor protection and may in fact be counterproductive: they risk encouraging mechanistic reliance on credit ratings rather than careful due diligence on sovereign credit risk, and create the potential for disruptive "cliff effects" where a sudden credit rating downgrade immediately renders a fund non-compliant.

MAS proposes to remove the Credit Rating Requirements from the exception criteria. In their place, two existing safeguards will be retained:

• the Public Debt Instruments must be constituents of a well-recognised international index (such as the JPMorgan Government Bond Index-Emerging Markets or the FTSE World Government Bond Index), which provides an indicator of global acceptance, liquidity and currency convertibility; and
• the fund must invest in at least six different issuances of Public Debt Instruments from the same government entity, with no single issuance exceeding 30% of NAV, to ensure a minimum level of diversification.

Enhanced disclosure requirements will also apply. Funds' prospectuses must contain clear and prominent disclosure of the single-country nature of the fund, the associated concentration risk, and the potential impact of political or economic changes in the relevant country on the value of the fund.

MAS notes that these revised requirements broadly align Singapore's approach with those of comparable jurisdictions, including the EU and Hong Kong, where such funds are already available to retail investors.

What this means in practice

The proposals signal a clear direction of travel: MAS is seeking to modernise Singapore's retail fund framework to broaden product choice and remain competitive with comparable markets, while preserving investor protections. As the proposals are at consultation stage, the final requirements may evolve in response to industry feedback. Fund managers considering new product launches, issuers of government bond funds and distributors should review the proposals carefully and consider whether to submit feedback to MAS by 10 August 2026.