New Hedge Fund Investment Programme Framework, Eligibility Criteria, Tax Exemption Interaction and Selection Safeguards
Ministry of FinanceSpeakers
Summary
This question concerns the objectives, eligibility criteria, tax interactions, and safeguards for the new Hedge Fund Investment Programme (HFIP), raised by Mr Chua Kheng Wee Louis to the Prime Minister and Minister for Finance. Replying for the Prime Minister, Mr Gan Kim Yong explained that the HFIP aims to attract hedge fund managers to establish or expand in Singapore, strengthening an asset management industry managing nearly S$7 trillion in assets. He noted that hedge funds drive trading activity, add market depth, and create demand and good jobs in ancillary sectors like prime brokerage, risk management, and legal services. Under the selection framework, the Monetary Authority of Singapore (MAS) will evaluate applicants' track records, investment strategies, and developmental commitments to scale local activities and develop talent. To safeguard the programme's developmental and investment goals, MAS will monitor managers' commitments and fund performance, with further operational details to be announced after industry consultations.
Transcript
3 Mr Chua Kheng Wee Louis asked the Prime Minister and Minister for Finance (a) what (i) are the gaps in the local investment ecosystem the new Hedge Fund Investment Programme is designed to fill and (ii) is the proposed eligibility criteria, including whether participating firms must hire a minimum number of local investment professionals; (b) how eligibility criteria for the Programme and the new tax exemption interact; and (c) what safeguards will govern MAS's selection criteria.
Mr Gan Kim Yong (for the Prime Minister): The Hedge Fund Investment Programme (HFIP) aims to attract hedge fund managers to establish or deepen their presence in Singapore. The hedge fund sector is a growing segment of Singapore's asset management industry, which has grown at a compound annual growth rate of 7.5% over the past five years to almost S$7 trillion in assets under management.
Hedge funds add to the depth and diversity of our financial sector and contribute to investment and trading activities through their transactions with other financial intermediaries. Hedge funds create demand for a range of ancillary services, such as prime brokerage, risk management, legal, compliance, technology and operations, and along with that, good jobs in these areas.
In selecting managers under the HFIP, the Monetary Authority of Singapore (MAS) will consider developmental commitment factors, such as the nature and scale of their activities to be conducted from Singapore and their plans to build future investment capabilities in Singapore, including their talent development efforts. MAS will also assess their investment strategies and performance track record. MAS will monitor the progress of appointed managers in fulfilling their developmental commitments and review the investment performance of their funds to ensure that the programme continues to meet both its developmental and investment objectives.
MAS is currently engaging industry stakeholders on the HFIP and will announce further details when ready.