Singapore, which spawned an industry that attracted US$53 billion of hedge fund assets, is set to tighten regulations that will impact smaller funds. Four out of every ten hedge funds in Singapore have less than $25 million in AUM, already treading the thin line between viability and having to shut down.
The Monetary Authority of Singapore (MAS) is requiring Fund Management Companies (FMC) to be independently audited and to have risk management systems in place. Some risk management systems cost tens of thousands of dollars per year, and for a small fund this can be prohibitively expensive.
In the long run, the new regulations that will go into effect in early 2012, will create a stronger and more durable hedge fund industry.
