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Fund managers are facing lengthy delays in getting approval to operate in Singapore after a surge in applications, putting a dent in the city-state’s ambitions to be Asia’s leading wealth management hub.
Average wait times reached close to eight months last year, higher than the three-month wait typically expected by investment managers and above the Monetary Authority of Singapore’s target of six, according to people with knowledge of the regulator’s inner workings.
Singapore in recent years has made efforts to attract rich foreigners seeking a base to park their wealth. Assets under management hit $4.1tn in 2023, overtaking rival Hong Kong’s $4tn, as funds flocked to the city-state over concerns about Beijing’s rising influence in the Chinese territory.
“I’ve seen cases where fund managers are waiting for more than nine months to get their applications processed, then they just give up,” said a lawyer involved in the investment industry.
“The regulator is caught between wanting to be open to incoming fund managers, but also avoiding letting the wrong ones in.”
On Friday, MAS unveiled a package of measures aimed at increasing the number of listings on its stock market, including a proposal to invest $5bn through external investors in a bid to draw in more fund managers to the city-state.
Among the global investors rushing to set up in Singapore last year were Chinese quantitative hedge funds looking to expand globally after Beijing moved to curb the sector’s growth at home.
Chinese authorities blamed the funds’ rapid-fire trading 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 trading strategies, have boomed in China in the past decade, accumulating more than $200bn in assets by 2024. Among the best known is High-Flyer Capital Management, whose co-founder, Liang Wenfeng, stunned the world last month with his budget artificial intelligence project DeepSeek.
High-Flyer does not appear on the MAS’s list of approved fund managers, though other well-known Chinese quant fund managers, such as Meridian & Saturn Capital and Goku Technologies, have received licences while others, including Ubiquant, have set up offices in Singapore.
Fund managers from Japan, Europe, the US and South America have also applied to set up in Singapore in a bid to attract more investors from south-east Asia.
The regulator has responded to the backlog by introducing measures to streamline the process, including an electronic system with validation checks to improve the quality of information in applications.
The MAS acknowledged “the processing time for fund management licences has seen an increase due to a higher volume of applications” and said “all applications are subject to robust standards of review”.
Last year, the regulator changed its licensing process for investment managers, increasing the frequency and detail of information that groups had to report. People close to the regulator said this had not affected application processing times.
Venture capital funds, which operate under a separate regime, have also seen application processing times balloon in recent years, from six weeks in 2020 to more than six months, according to people with knowledge of the matter.
https://www.ft.com/content/94624817-84e4-439a-8fe7-60938945daf4
