Enforcement action has been taken by MAS against China Capital Impetus AssetManagement Pte. Ltd. (CCIAM’s) and imposed Prohibition Order (PO) against its director and former Chief Executive Officer (CEO) Mr. Sun Quan.
MAS has observed the following breaches of SFR by the CCIAM: –
- Mitigate conflicts of interest arising from the management of assets and disclose the conflicts of interest to its investors.
- Put in place an appropriate risk management framework to address basic aspects of the business such as conducting investment due diligence, ongoing monitoring of investments, handling of redemptions, and pursuing claims owed to the fund managed by CCIAM.
- Inform MAS of changes to its representatives and relevant professionals, as well as changes in Mr Sun’s external business interests, within the required timelines; and
- Submit its annual declarations and auditors’ reports within the required timelines.
Mr. Sun is prohibited from doing:
- Any regulated activities
- From taking part in the management
- Acting as a director
- Becoming a substantial shareholder of any capital markets services firm under the Securities and Futures Act (SFA)
With effect from 1 August 2024, CCIAM can no longer undertake fund management activity in Singapore. The fund that CCIAM was managing has been placed under liquidation.
Conclusion: The Company must ensure that its senior management and board of directors including compliance officer must comply with all the MAS regulatory requirements as per SFA, SFR, and Guidelines on Licensing, Registration, and Conduct of Business for Fund Management Companies.
The case highlights specifically the compliance with the below clauses:
Clause no. 4.1.3 “Mitigating Conflicts of Interest”, the Company must implement measures to mitigate any conflicts of interest and, where appropriate, disclose any conflicts of interest to its customers. The Company can segregate the roles and responsibilities within its staff to monitor and mitigate the risks as per MAS regulatory requirements.
Clause no. 3.16 “Risk Management Framework”, the Company must implement a risk management framework to identify, address, and monitor the risks associated with customer assets that the Company manages.
The Company can consider the relevant principles mentioned in the MAS Guidelines on Risk Management Practices.
Risk Management Framework should include:
Governance, independence, and competency of the risk management function
Identification and measurement of risks associated with customer assets
Timely monitoring and reporting of risks to management Documentation of risk management policies, procedures and reports
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