Compliance and Fund Management in Singapore

Last Updated on June 16, 2023

The lion city is known as one of the world’s leading financial hubs, making fund management in Singapore attractive to fund managers and high-net individuals, due to the country’s stable business environment, market access, and well managed financial system. Not to mention, its business-friendly environment, which attracts entrepreneurs and businesspeople to keep and grow their investments in the city-state.

Singapore also provides several tax incentives for corporations, making it an ideal region to expand one’s business, including the financial and fund management industry.

Compliance for Fund Management Companies in Singapore

It’s important to remember that setting up a fund management company in Singapore is not without complications. There are several regulatory compliances that businesses must abide by. One of the first steps is to be a registered and licensed entity with the Monetary Authority of Singapore (MAS) under the Securities and Futures Act. There’s a minimum base capital required to register the company must have directors with enough experience in the finance world.

After being approved and licensed, fund management companies in Singapore must comply with local laws, such as the anti-money laundering, and counter the financing of terrorism (AML/CFT) framework. Other policies include implementing a know your customer (KYC) procedure for potential customers. These policies are put in place to align with existing regulations, including identifying, addressing, and monitoring the risks associated with the business activities. They also ensure that business activities are subject to adequate internal audits.

Such rigorous compliance and frameworks must be met to keep one’s licence as a fund management company in Singapore. This should be expected if Singapore wants to remain a dependable financial hub where individuals’ assets are managed with security. MAS always monitors the evolving financial needs of its citizens and residents. Regulations and compliance is not a constant; it’s continuously changing to keep up with the times and meet people’s needs.

Fund Management in Singapore FAQs

What is fund management compliance, and what does it entail for fund management companies in Singapore?

Fund management compliance refers to the adherence of fund management companies in Singapore to laws, regulations, and industry standards. It involves ensuring that these companies operate within the legal and regulatory framework to maintain the financial system's integrity and protect investors.

Which regulatory authority oversees compliance for fund management companies in Singapore?

The Monetary Authority of Singapore (MAS) is the regulatory authority responsible for overseeing compliance in the fund management industry in Singapore. It sets the regulatory framework and supervises adherence to relevant rules and regulations.

What are the licensing requirements for fund management companies in Singapore regarding compliance?

Fund management companies in Singapore are required to obtain a Capital Markets Services (CMS) licence from MAS. This licence is contingent upon meeting specific compliance criteria, such as demonstrating a sound track record, financial stability, robust compliance policies, and the competence of key individuals.

What ongoing compliance obligations do fund management companies in Singapore have to fulfil?

Fund management companies in Singapore have various ongoing compliance obligations, including:

• Adherence to Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) requirements.

• Regular reporting to MAS, which includes submission of audited financial statements and annual regulatory filings.

• Maintenance of accurate and comprehensive books and records to facilitate regulatory oversight.

• Establishment and maintenance of strong internal controls and risk management systems.

• Conducting periodic compliance reviews and self-assessments.

• Notifying MAS about any material changes to the business, key personnel, or compliance-related matters.

What are the key regulatory guidelines governing fund management compliance in Singapore?

MAS has issued several regulatory guidelines and codes of conduct for fund management companies in Singapore, including:

• Securities and Futures Act (SFA) and Financial Advisers Act (FAA): These acts establish the legal framework for fund management activities and licensing requirements.

• Code of Conduct for Fund Management Companies: This code outlines the standards of conduct, organisational and operational requirements, and the responsibilities of key individuals in fund management companies.

• Guidelines on Licensing, Registration, and Conduct of Business for Fund Management Companies: These guidelines provide detailed requirements for licensing, ongoing operations, risk management, and compliance.

What are the potential consequences of non-compliance for fund management companies in Singapore?

Non-compliance with regulatory requirements can lead to various consequences for fund management companies in Singapore. These consequences may include fines, sanctions, suspension or revocation of licences, reputational damage, and legal liabilities. MAS has the authority to take enforcement actions against non-compliant companies and individuals.

Are there any specific compliance requirements for marketing and distribution activities by fund management companies in Singapore?

Yes, fund management companies in Singapore must comply with specific requirements for marketing and distribution activities. These requirements encompass proper disclosure of information, fair treatment of clients, and avoidance of misleading or deceptive practices. MAS has issued guidelines to ensure the fair and ethical marketing of investment products.

How can fund management companies in Singapore stay updated with regulatory changes regarding compliance?

Fund management companies in Singapore should establish robust compliance and risk management frameworks, which may include appointing dedicated compliance officers. They should actively monitor regulatory updates, participate in industry events, engage with industry associations, and maintain regular communication with MAS to stay informed about any changes or updates to regulatory requirements.

Keeping up with the changing laws and regulations on your own can be a time-consuming and complicated process that may lead to inefficient business processes. Additionally, you may not have the expertise and understanding of the law, a crucial component to keep your fund management in business. Partnering with a third party with expertise regarding Singaporean laws and compliance may come in handy.

Read our guide on compliance with the Monetary Authority of Singapore (MAS) if you want to learn more on how to stay compliant with their rules and regulations.

Fund Management Services with Lanturn

Lanturn’s experts have years of experience and are ready to assist you in everything from applying for a licence to providing you with a regulatory framework. Our experts will guide you every step of the way and submit the necessary documents to the relevant authorities. Enjoy peace of mind as your compliance needs are taken care of!

Don’t hesitate to contact us now!