MAS Perspectives on the Hedge Fund Industry

By Kathryn Mathers

On 30 October 2009, Mr Ng Nam Sin, Executive Director, Financial Centre Development, Monetary Authority of Singapore, delivered a speech at the BNP Hedge Fund Symposium. In his address, Mr Ng highlighted how the hedge fund industry has been affected by the financial crisis of the past year and what the hedge fund industry should expect going forward, from the regulators perspective.

Mr Ng believes that the hedge fund industry has, on the whole, weathered the storm of the last year quite well. While experiencing losses, the losses have not been as extreme as other investment vehicles and there appears to be more capacity, due to hedge fund diversity, for a faster recovery.

For the future, Mr Ng says the industry should expect investors to require greater transparency and risk management. He also said the focus will not be on operational risk controls only, but also liquidity and counterparty risks.

Changes in regulation are the second future impact that Mr Ng discusses. He notes that IOSCO and the SEC have already begun addressing this aspect and that MAS will monitor what the global market adopts before instigating too many changes in Singapore. He does not want the pendulum to swing to over regulation.

Finally, Mr Ng addresses the competency of those who are managing the hedge funds. He believes Singapore is a leader in competency requirements and ongoing training for hedge fund operators. He said that MAS will continue to support the training of all individuals in the financial industry.

For full details of Mr Ng’s speech please see Hedge Fund Speech