Comments? MAS issues consultation paper on regulatory regime for fund management companies

One proposal is to require FMCs to put in place a risk management framework over their fund management operations.

The Monetary Authority of Singapore said the draft legislative amendments reflect the proposals set out in MAS’ first policy consultation on the regulatory regime for FMCs conducted in April 2010, and MAS’ response to feedback received, which was published in September 2010.

“As part of our on-going review of the regulatory framework, MAS is also proposing additional requirements to enhance the business conduct requirements for FMCs. MAS proposes to require FMCs to put in place a risk management framework over their fund management operations to identify, address and monitor the risks associated with the assets that they manage,” said MAS.

MAS is proposing as well to require FMCs which operate under the notification regime to undergo independent annual audits.

Meanwhile introduction of a new Capital Markets and Financial Advisory Services examination requirement for representatives of Licensed Retail FMCs which manage or offer Specified Investment Products to persons who are not accredited or institutional investors is also part of MAS' plans. This is aimed at raising the competency and product knowledge of FMC representatives.

The consultation period will end on 26 October 2011 and the revised regime is expected to take effect in early 2012.

View the consultation paper here.