Singapore’s MAS Enforces Strict Measures Against Non-Compliant Fund Managers

Overview

It was reported on 30 and 31st of July 2024 that MAS has reprimanded and issued enforcement actions to two registered fund managers in Singapore – RVP One Pte Ltd. (“RVP”) and China Capital Impetus Asset Management (“CCIAM”) respectively.

Specifically, due to the severity of the compliance breaches, CCIAM’s application to upgrade its licence to Licenced Fund Manager Company (“LFMC”) was rejected. Its CEO was also issued a 2-year Prohibition Order (prohibited to provide, conduct and/or perform any regulatory activities, taking part in management, holding directorship and taking substantial shareholder in any regulated entities).

With the repeal of the RFMC regime, both RVP and CCIAM can no longer undertake any fund management activities in Singapore and have since been de-registered from MAS.

Below is the list of breaches committed by both RVP and CCIAM:

• Failure to mitigate conflicts of interest arising from the management of assets

• Failure to disclose conflicts of interest to its investors

• Failure put in place an appropriate risk management framework to address basic aspects of the business such as:

  • conducting investment due diligence

  • ongoing monitoring of investments

  • handling of redemptions

  • proper handling of Fund’s claims managed by the managers

• Failure to inform MAS of changes to its shareholding structure and resignation of director within the required timelines

• Failure to inform MAS of changes to its representatives and relevant professionals within the required timelines

• Failure to inform MAS on changes of its representatives, relevant professionals and/or CEO’s particulars and external business interests within the required timelines

• Failure to inform MAS on changes to its fund management business activities

• Failure to submit its annual declarations and applicable reporting requirements within the required timelines

• Failure to take adequate steps to ensure compliance with MAS’ regulatory requirements

  
  

*MAS circular on RVP

*MAS circular on CCIAM

Preventive measures

MAS has issued various Guidelines and FAQs to educate and provide guidance to financial institutions on the importance of adhering to its regulatory requirements. These resources are constantly being reviewed and updated by MAS, to ensure that the regulatory requirements are kept up to date and maintain resilience against bad actors.

Financial institutions are advised to adhere, at all times, to the regulatory requirements imposed by MAS.This can be achieved by either having dedicated personnel or outsourcing to a compliance specialist toperform such compliance functions.

Below are some resources that are available in the MAS website:

1. Guidelines on Licensing, Registration and Conduct of Business for Fund Management Companies

2. Guidelines on Fit and Proper Criteria

3. Guidelines on prevention of money laundering and countering the financing of terrorism

4. Compliance toolkit for various licensed fund management companies

Summary

Ranked as the fourth largest global financial centre in the Global Financial Centres Index and the top financial centre in Asia, apart from its pro-business and cost-competitive environment, Singapore’s stability and wellregulated markets are the key factors for financial institutions to conduct its financial activities in Singapore.

MAS works closely with various industrial experts, and partners to constantly develop the financial sector and provide support to financial institutions. Consultation papers are issued to seek views and opinions on proposed changes and amendments, and all responses are typically published in the MAS website.

Accordingly, MAS expects all financial institutions to take their regulatory requirements seriously, and that key personnels (ie. CEOs and directors) to carry out their duties and functions effectively.

How we can help

As a specialised compliance consulting firm, Kai Global can assist you to keep up to date on all your regulatory compliance needs, including but not limited to:

• Point of contact with MAS

• Regulatory reporting requirements

• Risk compliance framework

• Outsourcing

• Business Continuity

• AML/CFT

• Consultation/advisory support