On Nov. 28, SIN MAS revised Code on collective investment schemes.
SIN MAS revised the Code on collective investment schemes with new leverage requirements and disclosure obligations for real estate investment trusts (REITs), following broad stakeholder consultation, establishing limits and coverage ratios.
Framework aims to ensure prudent borrowing while providing operational flexibility.
Follows SIN MAS Mar. 2023 revised code on collective investment schemes, #165708.
Requirements Overview
Establishes single aggregate leverage limit of 50% for all REITs, effective immediately.
Introduces minimum interest coverage ratio of 1.5 times, replacing old 2.5x threshold.
Managers must outline leverage and interest coverage ratio management strategies.
Required to perform sensitivity analysis showing impact of 10% EBITDA decrease.
Must analyze effects of 100-basis point interest rate increase on coverage ratios.
Additional remediation plans required if coverage ratio falls below 1.8 times; disclosures apply to financial results announcements as well as annual reports.
Scope of Application
Requirements cover all collective investment schemes offered to retail investors, while the relevant standards apply to scheme managers, trustees, in addition to custodians.
Effectiveness
Enhanced disclosure obligations begin for periods ending Mar. 31, 2025 or later.
