Compliance Insight – November 2023
Announcing a big change in Singapore’s fund management sector, the Monetary Authority of Singapore (MAS) published a Consultation Paper on the Repeal of the Regulatory Regime for Registered Fund Management Companies (“RFMCs”). The consultation paper clearly indicates that RFMCs will be abolished. The questions that remain are about the time and the terms of the transition. The conversion to an A/I LFMC may pose a slight challenge for some external asset managers (“EAMs”) that are currently registered as RFMCs. At the same time, it may offer some opportunities for consolidation and strengthening businesses through scale.
The MAS also issued a Consultation Paper on Proposed Guidelines for Transition Planning for Asset Managers. This paper emphasises the MAS’ continuing focus on ESG and environmental risk. AIWM will submit a response to the consultation paper. Let us know if you would like us to include specific points.
Finally, the MAS published an Information Paper on Strengthening Liquidity Risk Management Practices for Fund Management Companies. This information paper outlines learnings from MAS’ inspections and the MAS’ expectations for governance, initial product design, ongoing liquidity risk management, and stress testing. As indicated in the consultation paper, liquidity risk applies predominantly to collective investment schemes rather than the traditional EAM model of managing segregated accounts. We, therefore, suggest that EAMs focus on governance: that their board and senior management assess and document their liquidity risk considerations. Where an EAM also manages a collective investment scheme, it should also consider the other components of liquidity risk management.
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