Asset Managers highly receptive to proposals for new framework

PwC releases survey findings which provide industry perspectives on the need for a new investment fund framework in Singapore

SINGAPORE, 15 November 2013 – As part of the research and evaluation of the need for a new investment fund framework to boost Singapore’s asset management industry, PwC Singapore conducted a high level survey of the asset management community in July and August 2013.

The survey was intended to get a sense of the industry demand for new structures and flexibility in an investment fund framework, and what features would be deemed desirable and could lead to more interest in Singapore as a fund financial centre.

From the survey, it is clear that all the respondents were highly receptive to the idea of a new investment funds law framework which could bring in all the aspects needed to propel Singapore’s asset management industry to the next level.

Said Justin Ong, Asset Management Leader, PwC Singapore:

“What is unambiguously clear from the survey is that asset managers in Singapore see the need for a new investment funds law framework which they feel would help attract fund managers to set up new funds in Singapore, or bring existing ones here. This would, in turn, naturally grow the local asset management industry and supporting business ecosystem.”

The Survey

The survey was conducted with a preliminary meeting to explain the subject matter at hand, and also to gauge the level of acceptability of a new investment funds law framework in Singapore. The meeting was followed by a tailored set of questions created to elicit focused responses to the topic at hand, particularly around legal set ups, structure flexibility and conditions, tax benefits, open-ended variable capital, comparison against other jurisdictions, as well as preferred financial reporting standards, among others.

The respondents

The respondents to the survey were selected from a focused group comprising both registered or licensed asset managers in Singapore as well as a few foreign groups who had expressed interest in Singapore as a domicile for their future activities.

They spanned across all the sub-sectors, namely traditional funds such as retail unit trusts, as well as alternative funds like private equity, real estate and hedge funds.

Key findings

A summary of the major findings of the survey is as follows:

  • The current investment fund regime is not conducive to efficient operation of investment funds. The common pitfalls include lack of alternative financial statement reporting frameworks, lack of investor privacy, and lack of variable capital structure, etc.
  • While tax incentives can be credited with the growing number of asset managers domiciling in Singapore, there are also other factors that lead to this increased confidence in Singapore’s asset management industry that extend beyond the regulatory framework.
  • Approximately 90% of the respondents agree to having an Open-Ended Investment Company (OEIC) structure.
  • An overwhelming majority of the respondents were open to launching their next fund in Singapore if such a new framework was introduced.
  • A substantial majority requested for the creation of sub-fund/umbrella like structures under the new regime.

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Media Contact
Candy Li, PwC LLP Singapore (Tel: +65 6236 7429 Email: candy.yt.li@sg.pwc.com or pwcpress.sg@sg.pwc.com)
Alan Lee, PwC LLP Singapore (Tel:+65 6236 3961 Email: alan.ec.lee@sg.pwc.com)