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Fund managers are going through prolonged delays in getting approval to function in Singapore after a surge in purposes, placing a dent within the city-state’s ambitions to be Asia’s main wealth administration hub.
Common wait instances reached near eight months final yr, larger than the three-month wait usually anticipated by funding managers and above the Financial Authority of Singapore’s goal of six, in line with individuals with data of the regulator’s internal workings.
Singapore in recent times has made efforts to draw wealthy foreigners looking for a base to park their wealth. Belongings underneath administration hit $4.1tn in 2023, overtaking rival Hong Kong’s $4tn, as funds flocked to the city-state over issues about Beijing’s rising affect within the Chinese language territory.
“I’ve seen circumstances the place fund managers are ready for greater than 9 months to get their purposes processed, then they only surrender,” stated a lawyer concerned within the funding business.
“The regulator is caught between eager to be open to incoming fund managers, but in addition avoiding letting the mistaken ones in.”
On Friday, MAS unveiled a bundle of measures geared toward growing the variety of listings on its inventory market, together with a proposal to invest $5bn via exterior buyers in a bid to attract in additional fund managers to the city-state.
Among the many world buyers speeding to arrange in Singapore final yr have been Chinese language quantitative hedge funds seeking to increase globally after Beijing moved to curb the sector’s growth at home.
Chinese language authorities blamed the funds’ rapid-fire buying and selling patterns for exacerbating a stock market slump in January 2024, when the benchmark CSI 300 index dropped 6 per cent to a five-year low in what was dubbed China’s “quant quake”.
The funds, which deploy computer-driven buying and selling methods, have boomed in China prior to now decade, accumulating greater than $200bn in belongings by 2024. Among the many finest identified is High-Flyer Capital Management, whose co-founder, Liang Wenfeng, surprised the world final month together with his price range synthetic intelligence mission DeepSeek.
Excessive-Flyer doesn’t seem on the MAS’s checklist of permitted fund managers, although different well-known Chinese language quant fund managers, corresponding to Meridian & Saturn Capital and Goku Applied sciences, have obtained licences whereas others, together with Ubiquant, have arrange places of work in Singapore.
Fund managers from Japan, Europe, the US and South America have additionally utilized to arrange in Singapore in a bid to draw extra buyers from south-east Asia.
The regulator has responded to the backlog by introducing measures to streamline the method, together with an digital system with validation checks to enhance the standard of knowledge in purposes.
The MAS acknowledged “the processing time for fund administration licences has seen a rise as a consequence of the next quantity of purposes” and stated “all purposes are topic to sturdy requirements of overview”.
Final yr, the regulator modified its licensing course of for funding managers, growing the frequency and element of knowledge that teams needed to report. Individuals near the regulator stated this had not affected software processing instances.
Enterprise capital funds, which function underneath a separate regime, have additionally seen software processing instances balloon in recent times, from six weeks in 2020 to greater than six months, in line with individuals with data of the matter.
