Government to make it easier for asset managers to base funds here: Indranee Rajah

SINGAPORE - A new regulatory framework for open-end investment companies (OEIC) could be introduced soon.

The aim is to encourage more asset managers to base their funds here and promote the development of the fund administration industry in Singapore, as well as more investor protection.

Announcing this, Senior Minister of State for Finance and Law Indranee Rajah said: "The Monetary Authority of Singapore and Acra ( Accounting and Corporate Regulatory Authority) are studying the introduction of an OEIC framework for investment funds that will facilitate local domicile of funds while continuing to ensure strong protection for investors."

She was speaking at the Investment Management Association of Singapore's annual conference on Wednesday morning (March 16).

The framework, targeted to be rolled out within a year, will offer a more efficient fund administration structure for asset managers who domicile their funds in Singapore.

Welcoming the move, Nicholas Hadow, chairman of The Investment Management Association of Singapore said: "OEIC's are flexible alternatives to the unit trust structure already well established in the UK and available in other financial centres such as Luxembourg and Dublin.

"The introduction of an OEIC framework will enable asset managers to domicile their investment vehicles in Singapore, encourage the development of the asset servicing eco-system here and further cement our position as a globally competitive asset management hub."

OEICs (pronounced 'oiks') refer to a company listed on the stock exchange whose sole aim is to invest in securities issued by other entities, said HSBC.

The bank explained: " Unlike an investment trust, there is no limitation on the number of shares that can be issued - and that gives it an open-ended structure."

A 2013 study by PwC found that fund managers said the current situation is not conducive to efficient fund operations - there is a lack of alternative financial statement reporting framework, the lack of investor privacy and the lack of a variable capital structure.

rachaelb@sph.com.sg