General Investors

Principal investors in the debt market include fund management companies, such as the Government of Singapore Investment Corporation and the Central Provident Fund, and private asset management companies, licensed banks, and insurers. Retail investors are also encouraged to participate.

There are no restrictions on foreign investors owning government or corporate bonds. However, bonds issued by an unrated foreign entity may only be sold to sophisticated investors (as defined under the Companies Act)

Asset Pooling Industries

Pension Funds

The Central Provident Fund (CPF), a government-managed retirement scheme, dominates the country’s pension funds industry. Under the CPF investment scheme (CPFIS), no restrictions apply to CPF’s foreign-currency and cross-border investments. Total members’ balance as of June 2007 amounted to SGD131.2 billion.

Insurance Companies

The insurance industry is an important source of financing in Singapore. As of June 2007, total assets of insurance companies reached SGD119.1 billion.

Insurance companies are allowed to place funds in various investment instruments, including bank time deposits, equities, central-bank debt issues, mortgage loans, and direct investments, among others.

They are also allowed to make offshore investments, but these should total no more than 20% of their total assets.

Asset Management Companies

Singapore recognizes the importance of developing its asset management industry as part of its overall plan to become an important financial hub.

To develop the asset management industry, the government encourages statutory boards and state-managed firms to tap the asset-management industry for their excess funds. In 2002, the restriction that investment instruments under the CPF Investment Scheme be denominated in Singapore dollars has been relaxed. Fund management companies no longer have to set up SGD-denominated feeder funds for their global funds.

To encourage more market participants, entry requirements for foreign entities wishing to set up as investment managers has also been reduced. Minimum shareholders’ funds are set at SGD100 million, while minimum global funds managed by a parent company is SGD100 billion.