On July 19, the Monetary Authority of Singapore (MAS) issued a “Consultation Paper on Enhancements to Regulatory Requirements on Protection of Customer’s Moneys and Assets” (Consultation Paper).
The MAS has undertaken a review of the requirements governing the protection of customers’ moneys and assets held by holders of a capital markets services license (CMS Licensees) and is proposing to enhance those relating to the safeguarding, identification and use of customer’s moneys and assets, and those relating to disclosures to customers. The MAS proposals take into account the international standards promulgated by the International Organization of Securities Commission and the Financial Stability Board.
This briefing focuses on the proposals that may affect Singapore fund management companies (FMCs) that are CMS Licensees as well as registered FMCs.
We set out below a summary of the key amendments proposed in the Consultation Paper:
Key Proposals in the Consultation Paper |
|
Proposal |
Summary |
Expanding the definition of “customer’s moneys” in the Securities and Futures (Licensing and Conduct of Business) Regulations (LCB Regulations) |
|
Requiring CMS Licensees to conduct due diligence on the suitability of deposit-taking financial institutions and custodians |
|
Requiring CMS Licensees to obtain acknowledgement from overseas financial institutions |
|
Requiring CMS Licensees to maintain information systems and controls |
|
Requiring CMS Licensees to disclose in advance to customers the manner in which the customer’s moneys and assets are held |
|
Daily computation of trust accounts and custody accounts |
|
Re-hypothecation and other use of customer’s assets |
|
Request for statement of account |
|
Invitation for Comments
Please refer to the Consultation Paper for the complete set of proposals as well as the list of consultation questions, which can be found here. The deadline for comments and feedback to be submitted to the MAS is August 19, 2016. We are collating comments from clients and industry participants for submission to the MAS. If you have comments on the proposals that you would like us to submit on your behalf, please contact Han Ming Ho (+65 6230 3966, hanming.ho@sidley.com) or Josephine Law (+65 6230 3916, jlaw@sidley.com).
1These include banks, merchant banks, finance companies and depository agents. |
If you have any questions regarding this Sidley Update, please contact the Sidley lawyer with whom you usually work, or
Han Ming Ho Partner hanming.ho@sidley.com +65 6230 3966 |
Josephine Law Counsel jlaw@sidley.com +65 6230 3916 |
Investment Funds, Advisers and Derivatives
To receive Sidley Updates, please subscribe at www.sidley.com/subscribe.
Sidley Austin provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship.
Attorney Advertising - For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000.