Singapore's New Hedge-Fund Regulation Puts City `Back on Map'
by Netty Ismail, Bloomberg.com
Will investing in the hedge fund industry raise a smile or a scream?
Photo by Lin Pernille at http://www.flickr.com/photos/linnybinnypix/
Singapore hedge fund startups are on the rise after the central bank approved new rules that didn’t impose a licensing requirement on most funds.
Seven new hedge funds set up in May and June, according to Eurekahedge Pte, after the Monetary Authority of Singapore said in April that small funds can keep operating without a license as part of its review. The number of new funds last year fell 13 percent to 26, the lowest since 2003, as uncertainty over pending rule changes kept managers away, according to data from the Singapore-based industry researcher.
“Singapore did not shoot itself in the foot by putting up proposals that will kill off the business,” said Kher Sheng Lee, a senior associate in the financial services group at Philadelphia-based law firm Dechert LLP in Hong Kong. “While some places are moving towards over-regulation with rigid rules and increase in compliance costs, Singapore has attempted to go for sensible regulation.”
Singapore is vying with Hong Kong for a slice of the global $1.7 trillion hedge-fund industry as the region’s growth leads the world. Singapore has made it easier for hedge funds to set up shop on the island than in other Asian cities such as Hong Kong, where hedge-fund managers face the same licensing requirements as mutual-fund managers.
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