Singapore : Sing-apore will review rules for its investment management industry, including hedge-fund and private-equity managers, for the first time since it introduced incentives to lure alternative asset managers in 2002.
The Monetary Authority of Singapore will start a public consultation within two weeks on proposals to ensure regulations remain "sound and responsive to the changing needs of the various stakeholders in the fund management industry," it said in an email statement.
Hedge funds and private-equity firms are under scrutiny from regulators and lawmakers worldwide, who say they are partly to blame for the worst financial crisis in a generation.
Singapore's hedge-fund industry has grown into Asia's second biggest behind Hong Kong as the government lured investment management professionals with tax incentives and grants.
"They're aware of the need to find the right balance," said Melvyn Teo, a director at the BNP Paribas Hedge Fund Centre at Singapore Management University. "It will make Singapore less appealing to really small, young hedge funds, but the industry is maturing at the moment. We might still be quite attractive to more established larger ones."
The review "is essential for the long-term and sustainable growth of the fund management industry," the regulator said in the statement in response to queries from Bloomberg News. The MAS has been consulting the industry since last year about tightening regulations.
"If we can expect some sort of indication of what the plan is going to be, that is very welcome," said Stephane Pizzo, founder of Singapore hedge-fund investing firm Lotus Peak Capital. "The regulations need to be well thought out so they are useful guidelines for asset management firms, without being unnecessarily restrictive or cumbersome." Pizzo started an Asia-focused fund of hedge funds last year.
MAS has set up the Investment Intermediaries Department to supervise intermediaries, including alternative investment managers, and to "drive regulatory policies" governing the industry, it said in the statement.
The monetary authority will have "the flexibility to apply the appropriate level of regulatory oversight and licensing requirements relevant to alternative managers, and not be limited with the broad brush approach" of the existing Capital Markets Intermediaries Department, said Han Ming Ho, who heads the funds practice group at Clifford Chance.
