A Guide on Compliance with the Monetary Authority of Singapore (MAS)

Singapore is a major international financial centre. It has a strong and stable economy that attracts investors and business ventures from all over the world. This includes businesses in the fund management industry, giving investors a wide variety of choices to invest and grow their wealth in Singapore.However, getting approval for a licence to conduct fund management and transactional matters in the Merlion city is complicated. There are many laws and compliance criteria outlined by the Monetary Authority of Singapore (MAS) that must be followed. Such an approach is expected since Singapore prides itself as a nation that can provide dependable financial institutions and trustworthy financial services.

The compliance applies to when you appoint your directors, chief executive officers, deputy chief executive officers, chief financial officers, and chief risk officers. You must secure MAS’ approval before allowing your appointees to do their jobs. To gain approval you must prove that your appointees meet the“Fit and Proper” guidelines. 

When considering whether an appointee is fit and proper, MAS has three criteria.

1. Honesty, integrity, and reputation

2. Competence and capability 

3. Financial soundness

MAS will look at an appointee’s track record to determine honesty and integrity. For example, if they were ever refused the right to hold a licence to conduct business in any jurisdiction. And whether the appointee has been investigated that may lead to a conviction in Singapore or elsewhere. 

For the competence and capability criteria, MAS will look at the appointees’ past performance and expertise related to their roles. They also need to possess a good educational background and obtain relevant certificates that prove their skills in their job. MAS will also examine whether they have a conflict of interest with their responsibilities at another entity that may impair their judgement. 

Meanwhile, MAS will look at appointees’ financial history to assess the financial soundness criteria. They want to know whether the appointee has ever been unable to fulfil their financial obligations. They also want to make sure the candidates have no excess debts or unethical money arrangements with investors.

After successfully gaining approval from MAS (Monetary Authority of Singapore), all appointees must also follow the guidelines on Individual Accountability and Conduct (IAC). The guidelines have the following five desired outcomes:

1. Financial institutions should clearly identify senior managers responsible for the business’s operations.
   
   

2. Appointed senior managers should be deemed proper and fit to be responsible for the operations and conduct of the business.
   
   

3. Financial institutions should implement a clear and transparent governance framework. This framework should foster a supportive and conducive working environment that outlines one’s roles and responsibilities.
   
   

4. Employees hired in material risk functions are deemed proper and fit to do their roles. They must be subject to effective risk governance and have appropriate incentive structures and standards of conduct.
   
   

5. The financial institution has a framework that promotes and sustains the desired conduct among all employees.

Complying with the criteria and requirements above is a must for fund management and financial institutions in Singapore. However, this can be a lengthy process that’s complicated and time-consuming. That’s why Lanturn has a team of experts who are ready to help with your every need.

Don’t hesitate to contact us to begin your compliance journey the right way today!