Introduction
On 2 July 2025, the Monetary Authority of Singapore (MAS) addressed the Investment Management Association of Singapore’s 11th Regulatory Forum, highlighting the challenges and supervisory priorities for the fund management industry amid ongoing geopolitical tensions, trade uncertainties, and market volatility. The speech underscored the importance of resilience, adaptability, and collaboration between MAS and industry participants towards safeguarding investor interests in Singapore and maintaining its position as a leading asset management hub.
Enhanced risk management: Updates to liquidity risk management guidelines
Through this speech, MAS announced its intention to revise the 2018 Guidelines on Liquidity Risk Management Practices for Fund Management Companies, in line with recent recommendations from the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO). MAS will consult on the revised guidance later this year. The forthcoming consultation will focus on:
- Categorisation of funds based on the liquidity of underlying assets, to better align asset liquidity with redemption terms
- Greater emphasis on access to liquidity management tools (LMTs), including anti-dilution tools such as swing pricing and anti-dilution levies
- Enhanced governance standards for the use and disclosure of LMTs
These revisions aim to strengthen industry preparedness for future market volatility.
Governance and management of variable capital companies
MAS reiterated the importance of robust governance as a pillar of resilience in fund formation and domiciliation within the fund management industry. Key supervisory observations from the recent thematic review of variable capital companies (VCCs) include:
- Custody arrangements: VCCs must establish independent custody arrangements for relevant assets such as listed equities and fixed income instruments, except for private equity or venture capital investments offered exclusively to accredited or institutional investors
- Anti-money laundering and countering the financing of terrorism (AML/CFT) controls: VCCs are required to implement robust AML/CFT frameworks, with directors retaining ultimate responsibility for oversight, customer due diligence, and maintenance of accurate beneficial ownership records
- Ongoing training practices: Regular AML/CFT training for directors and eligible financial institutions is essential to support the monitoring and, when necessary, addressing of emerging risks
VCC managers are expected to review their operations in light of these findings and address any compliance gaps. Please refer to our client alert on the MAS circular.
Data collection and supervisory approach
Recognising the need for timely receipt of actionable data, MAS outlined plans to streamline and enhance data collection from fund management companies:
- Introduction of a quarterly, standardised survey across all fund strategy types, replacing the current annual Fund Management Risk Assessment Questionnaire
- Limiting the scope of quarterly data collection to essential metrics, with annual collection of less time-sensitive data
- Implementation of an assets under management (AUM) reporting threshold to reduce the reporting burden, and flexible submission options for firms of varying sizes
The phased rollout will commence in the second half of 2025, with full implementation targeted for early 2026. MAS will engage with industry stakeholders to ensure a smooth transition (including completion and trials of the new platform).
Cybersecurity and scam vigilance
MAS highlighted the increasing threat of cyberattacks and impersonation scams targeting fund management companies. Recommended good practices for fund management companies to adopt include:
- Periodic online scans to detect impersonation of the fund management company
- Public advisories to inform investors how to verify the legitimacy of communications from the fund management company
- Prompt reporting of impersonating entities to authorities and MAS for their inclusion on the MAS Investor Alert List
Fund management companies should assess their cybersecurity measures and strengthen them where necessary to safeguard their operations and client assets.
Conclusion
The supervisory priorities shared by MAS reflect a continued emphasis on resilience, robust governance, and proactive risk management practices in the fund management sector. Industry participants are encouraged to review their practices and, where necessary, update them to ensure alignment with MAS’ expectations. The continued and ongoing collaboration with the regulator is integral to maintaining Singapore’s position as a secure and innovative asset management hub.
Client Alert 2025-192
