Published in May 2026, the Monetary Authority of Singapore’s (MAS) Information Paper on Risk Management Practices for Fund Management Companies (FMCs) provides valuable insights into the regulator’s observations from its inspections of FMCs across Singapore. The paper goes beyond a typical regulatory publication. It highlights common weaknesses, good practices and areas where FMCs can strengthen their risk management frameworks. For FMCs, the paper serves as both a regulatory benchmark and a practical compliance monitoring tool. Firms can use its observations to assess existing controls, identify gaps and enhance their risk management practices.

Drawing on thematic inspections covering equity funds, fixed income funds, hedge funds, private credit funds, and fund-of-funds, the paper sets out MAS’ supervisory expectations across five areas: governance, Policies and Procedures (P&Ps), new fund launches and changes to existing funds, investment due diligence, and ongoing monitoring of investments. For compliance officers, risk managers and senior management at FMCs, the paper warrants careful review. It not only sets out regulatory expectations but also highlights real-world failures observed by MAS. These observations provide valuable lessons for strengthening risk management frameworks and controls. 

Governance Expectations Under MAS Risk Management for FMCs

MAS expects the Board and Senior Management (BSM) to establish appropriate governance structures, frameworks, P&Ps, and controls across the entire investment lifecycle. Senior management members or dedicated committees with the relevant expertise should oversee these arrangements. Two specific obligations stand out. First, BSM must identify, manage and mitigate Conflicts of Interest (COI), and disclose them to investors where appropriate. Second, BSM must remain apprised of investment matters on a timely basis and ensure that clear escalation procedures are in place.

Where firms fell short:

• Allowing a fund’s trading volume to increase despite unresolved reconciliation issues, resulting in prolonged Net Asset Value calculation delays.
• Certifying compliance with internal policies and procedures despite non-compliance.
• Weak conflict of interest controls, including situations where conflicted individuals participated in reviewing or approving transactions from which they stood to benefit.
• Committees lacking representation from key support functions such as operations and legal.
• Risk oversight functions that lacked sufficient stature or independence to effectively challenge investment decisions.

The takeaway: A well-structured corporate governance framework requires BSM to exercise genuine oversight and accountability. BSM should apply COI measures consistently and ensure that support functions have sufficient authority and independence. Firms should also maintain proper records of all deliberations and decisions. Ultimately, governance must be substantive rather than a paper exercise.

Risk Management Policies and Procedures for FMCs

MAS expects FMCs to maintain comprehensive P&Ps that clearly define roles and responsibilities across the organisation. This includes responsibilities assigned to third-party service providers. P&Ps should also establish appropriate frameworks, controls and escalation procedures for managing investment risks. P&Ps must be reviewed regularly and updated on an ad hoc basis when trigger events occur.

Where firms fell short:

• Firms failed to update their P&Ps to reflect current practices or provide sufficient guidance on escalation procedures and monitoring metrics.
• Inconsistencies across P&Ps, particularly in error, breach handling, and reporting processes.
• Failure to comply with established P&Ps, including not documenting or justifying deviations.
• Delays in implementing key investment P&Ps, with one FMC establishing them almost a year after launching a fund.
• Inadequate review processes, including the absence of annual reviews or defined triggers for ad-hoc updates.

The takeaway: FMCs should establish P&Ps before launching funds, keep them current and internally consistent, and follow them in practice. Professional documentation of P&Ps, committee minutes, and approval records is itself a core compliance requirement, not a secondary consideration.

MAS Expectations for New Fund Launches

Before launching a new fund or making material changes to an existing fund, FMCs must conduct a comprehensive assessment. This assessment should consider the fund’s investment objectives, risk-return profile, redemption terms and liquidity tools. FMCs should also evaluate the experience and infrastructure of both the FMC and its service providers, as well as compliance with applicable laws and regulations. All launches and material changes must be reviewed and approved by the relevant authority, with assessments properly documented. Fund documents and marketing materials must be accurate and not misleading.

Where firms fell short:

• Failing to assess an investment’s return-risk profile before launching a new fund.
• Not reassessing credit exposure when a private credit fund’s repayment source changed materially.
• Appointing portfolio managers with limited experience in the relevant asset class and investment strategy.
• Inadequately assessing the suitability and expertise of service providers, particularly for specialised assets such as digital assets.
• Poor record keeping, including gaps in documentation and reliance on verbal approvals.

The takeaway: FMCs must ensure all relevant factors, including staff capability, service provider suitability, and the fund’s actual risk profile, are rigorously assessed and documented before investors commit capital. Engaging specialist support for fund setup and structuring in Singapore can help FMCs navigate these requirements more efficiently.

Due Diligence Requirements for FMCs

MAS expects FMCs to conduct robust due diligence on every potential investment, assessing its authenticity, suitability, and whether its projected return-risk profile aligns with the fund’s investment objectives. Particular attention should be given to liquidity risk, especially where the liquidity of underlying investments may not match the fund’s redemption terms, as such mismatches can expose investors to heightened operational and liquidity risks. Private market investments warrant additional scrutiny due to their complexity and limited transparency. While FMCs may rely on external advice, legal opinions, and credit rating reports, they must retain sufficient internal expertise to critically assess and, where necessary, challenge those conclusions. Ultimately, accountability for investment decisions remains with the FMC.

Where firms fell short:

• Failing to adequately verify the authenticity of trade receivables and follow up on discrepancies before investing.
• Accepting guarantees without assessing the credit quality of guarantors, and in some cases, failing to assess borrower creditworthiness.
• Performing insufficient due diligence on third-party fund managers, including overlooking their governance frameworks, conflict of interest management, and pricing controls.
• Assessing only the Real Estate Investment Trust (REIT) sponsor while failing to evaluate the REIT manager.
• Failing to assess liquidity mismatches, including a fund offering monthly redemptions while investing in underlying funds with quarterly redemption terms.

The takeaway: Due diligence must be thorough, consistent, and well-documented. FMCs remain accountable for every investment decision, regardless of how much they rely on third parties.

Monitoring and Risk Oversight for FMCs

MAS expects FMCs to put in place frameworks, controls, and systems to monitor material risks, including market, credit, counterparty, liquidity, and operational risks throughout the fund lifecycle, alongside relevant developments in underlying investments and the performance of service providers. Risk metrics and thresholds must be set to enable timely escalation. Where models are used, their assumptions and outputs must be periodically validated and back-tested. Investor disclosures must always accurately reflect the fund’s actual risk profile.

Where firms fell short:

• Lack of independent risk monitoring, with compliance with investment and risk limits left solely to portfolio managers.
• Extending or rolling over credit facilities without conducting timely credit reviews.
• Reclassifying restructured loans as “performing” without monitoring repayment performance under revised terms.
• Failing to safeguard pledged collateral, resulting in collateral being disposed of without the FMC’s knowledge.
• Providing inaccurate or misleading investor disclosures, including failing to update offering documents following material changes in risk exposure and misreporting overdue loans as “performing”.
• Poor record keeping, with some FMCs unable to demonstrate that monitoring activities had been performed.

The takeaway: To maintain compliant MAS risk management, FMCs must ensure monitoring is independent, systematic, and frequent enough to match the dealing frequency and nature of assets. An independent internal audit function plays a critical role here, providing the third line of defence by verifying that regulatory monitoring controls are operating as intended and that investor disclosures remain accurate.

The Patterns Behind the Problems

Stepping back from the individual findings, several recurring themes emerge across all five areas of the paper.

Documentation failures are pervasive. Across governance, P&Ps, fund launches, due diligence, and monitoring, FMCs consistently struggled to produce records that demonstrated rigour and accountability. Verbal approvals, missing minutes, and absent checklists are not merely administrative oversights; they make it impossible to demonstrate that governance structures are working in practice.

Independence is often nominal. Several FMCs had risk and compliance functions that existed on paper but lacked the authority, seniority, or structural independence to provide effective challenge. This reflects a cultural tolerance for support functions as box-ticking exercises rather than genuine counterweights to portfolio management.

Private credit remains the highest-risk area identified in the Information Paper. The paper’s most significant findings are concentrated in private credit funds. The bespoke and often opaque nature of these investments creates heightened risk. Weaknesses in credit quality assessments, collateral enforcement and covenant monitoring can significantly increase the likelihood of adverse outcomes. FMCs operating in this space should treat the paper’s findings as a direct and specific call to action.

Conflicts of Interest remain undermanaged. MAS cited examples where officers directed investors’ capital to entities in which they held personal or financial interests. Other cases involved conflicted individuals approving their own transactions without appropriate disclosure. These examples highlight serious governance and control failures. FMCs should ensure that their COI frameworks are comprehensive, well-documented and consistently applied.

The Information Paper builds on the updated Guidelines on Operational Risk Management (“ORMG”), issued for consultation in March 2026. While the ORMG establishes a broad operational risk management framework for Regulated Financial Institutions, the Information Paper provides more specific guidance for FMCs. Drawing on MAS’ thematic inspections, it translates high-level principles into practical supervisory expectations across the investment lifecycle.

Practical Steps to Strengthen Risk Management for FMCs

The paper explicitly permits FMCs to adopt a risk-based and proportionate approach when benchmarking against its expectations, taking into account size, scale, and complexity. Smaller FMCs are not expected to replicate the governance structures of large asset managers, but they are expected to address gaps through proportionate measures, including, where appropriate, engaging external service providers to conduct independent assessments.

To upgrade their MAS risk management, FMCs should take the following practical steps:

• Conduct a structured gap analysis. Work through each of the five areas in the paper against current governance structures, P&Ps, and controls. Identify deficiencies and document them honestly.
• Review COI frameworks. Map all scenarios in which conflicts of interest could arise across the FMC’s operations and assess whether current controls and disclosures are adequate.
• Strengthen independent oversight. Ensure that risk and compliance functions have sufficient seniority and structural independence to provide genuine challenge. This may require elevating the stature of the risk function or adjusting committee compositions.
• Address private credit specifically. If managing private credit funds, conduct a focused review of credit assessment frameworks, collateral safeguarding controls, covenant monitoring processes, and investor disclosure practices in light of the paper’s findings.
• Consider engaging external specialists for corporate governance reviews, internal audit functions, or regulatory monitoring support, particularly if your FMC lacks the in-house capacity to conduct these independently.

Conclusion

The MAS Information Paper on Risk Management Practices for FMCs is a substantive and detailed document. Its inspection findings reinforce that MAS’ expectations are not merely aspirational. Rather, they reflect the baseline standards that FMCs are expected to maintain in protecting investors’ interests.

Effective risk management should not be viewed as a compliance burden. Instead, it provides the governance, controls and oversight needed to manage capital responsibly, maintain investor confidence and reduce regulatory risk. FMCs that treat this paper as an opportunity to genuinely strengthen their frameworks, rather than merely a compliance checklist, will be better positioned to meet future supervisory scrutiny.

Whether the need is for fund setup and structuring support, licensing guidance, documentation of internal P&Ps, ongoing regulatory monitoring, or an independent internal audit, the frameworks exist to help FMCs meet these standards proportionately and confidently.

How Curia Regis Can Support

Curia Regis assists firms in implementing MAS Risk Management for FMCs through governance reviews, compliance monitoring, internal audit and risk management assessments. We support FMCs across the full compliance and risk management lifecycle. Our services include fund setup and structuring, licensing support, internal P&P documentation, corporate governance reviews, ongoing regulatory monitoring, AML/CFT screening and independent internal audit. Whether the gap is in governance structures, due diligence frameworks, or monitoring records, our team can help bring your practices in line with MAS’ expectations, proportionately and efficiently.

Ensure your operational response is seamless. You can reach us here or email admin@curiaregis.com to get in touch.