Compliance
Singapore Regulator Tightens Rules For Fund Managers
The financial regulatory authority of Singapore has implemented changes to the framework governing fund management firms operating in the city-state.
The financial regulatory authority of Singapore has implemented changes to the framework governing fund management firms operating in the city-state.
The rules amended by the Monetary Authority of Singapore focus on tightening licencing, registration and operating requirements for all fund managers with businesses in Singapore.
The changes were applied to the licencing and conduct of business regulations and financial and margin requirements regulations under the Securities and Futures Regulations, as well as the Financial Advisors Regulations.
According to the revised guidelines, newly introduced registered fund management companies may serve up to 30 qualified investors and manage up to S$250 million (approx $200.1 million) in assets under management. All other fund management firms will have to apply for a licence.
The new base capital requirement of S$250,000 will significantly push the startup cost of RFMCs that are incorporated in Singapore and also the fulfillment cost of the current exempt FMCs when they subscribe for the RFMC status, said MAS.
The revision also impacts transparency concerns, as now firms will be required to undergo independent annual audits by external auditors. Independent custody and valuation of investor assets are also now required.
"Robust risk management practices, stronger corporate governance frameworks and enhanced transparency, and higher disclosure standards are the need of the hour. The enhancements will bolster the confidence of investors who are currently risk averse," commented Satish Bakhda, head of operations at Rivkin, a company registration specialist firm in Singapore.
"[It] will improve the quality of new entrants and to some extent the resultant mergers and exits will consolidate the fund management sector in Singapore. In turn, the regulations may also attract more FMs to opt for Singapore company formation," added Bakhda.
