The Impact of Tighter Regulations on Small Fund Managers in Singapore


Singapore -- (SBWIRE) -- 08/30/2013 -- The Monetary Authority of Singapore has tightened its regulatory regime which has had an impact on startups and emerging fund managers who are looking to control costs and stay competitive in an increasingly competitive industry. Empirical Research Pte Ltd is an example of just such a company.

It has been a little over a year since the Monetary Authority of Singapore (MAS) introduced changes to its regulations pertaining to Fund Management Companies. The changes included enhanced reporting and auditing requirements which aimed to improve industry quality and reduce risk.

While the changes may be effective, they have also raised barriers to startups and emerging smaller managers. Smaller managers (defined as having fewer than 250 million in assets) are now required to maintain capital of at least 250,000 dollars, submit to regular audits and retain key staff with stringent background and experience requirements. Given the competitive nature of the industry, base wages are often high. Together these factors require much higher startup capital and increased operation expenses in an industry that is already experiencing intense competition and reduced margins.

Consequently some managers are now looking to other jurisdictions where overheads and management costs can be kept to a minimum to remain competitive. Such is the case with local fund manager, Empirical Research (, a private limited company trading managed futures accounts in Singapore since 2006. Empirical chose to cease its regulatory status in Singapore and its Director, Joshua Hudson, has moved on to other opportunities in other jurisdictions.

In a recent interview Mr. Hudson heaped praise on the Merlion city but indicated a desire to keep costs low:

"Singapore is a very strong jurisdiction to operate a fund management company from. The regulatory regime has played an important role in establishing Singapore as a world class venue for wealth and investment management. Unfortunately for my company, Empirical Research [‘Pte Ltd’], operating costs were going to become higher than I liked. I chose to cease MAS regulated business activities some time ago. Aside from being one of the best places to run a business, Singapore is a great place to live and will always feel like home to me."

While researching for this article it was observed that Empirical had received a reprimand from the MAS and Mr Hudson was asked if this was relevant in his decision to cease regulated activities:

“The reprimand Empirical received was totally unrelated. It was issued more than 6 months after I made my decision. Each year I was required to report AUM and the number of clients in a timely manner, unfortunately I was late a few times. The reprimand was also under the older regulatory regime which has since been repealed and new, stricter regulations came into effect about 6 months later.”

Evidently the Singapore regulators are always on the ball and don’t let even the smallest of issues get past them. The latest regulations are even more stringent and sure to maintain the high industry standards and good reputation they currently enjoy.