Singapore 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 e-mailed statement on April 21.
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.”
Hedge funds worldwide posted net outflows of $285 billion last year, leaving assets at $1.6 trillion, according to Hedge Fund Research Inc., a Chicago-based research firm.