As the asset management industry in Singapore continues to evolve in complexity, there is increasing economic pressure for compliance and enhanced ongoing business conduct requirements to keep up with the dynamic regulatory environment.

Heightened regulatory pressure in the financial services industry has resulted in the gradual need for organisations to employ a consolidated and coherent set of internal controls, while maintaining a substantial level of organisational transparency and integrity.

The issuance of a plethora of financial market regulations coupled with the constantly evolving regulatory landscape requires asset management firms to relook at how they can achieve high standards of compliance and its corresponding impact to their business processes.

What is Compliance to Asset Managers and Why is it Important?

Asset management compliance refers to the adherence to a set of legal standards and policies, which plays an integral role in the investment process to instill confidence in investors and to fortify the firm’s presence in the market.

Asset management firms are expected to conform to relevant rules, regulations, and laws stipulated by the local authorities. A financial  institution should also adopt adequate internal control practices to protect and enhance shareholders’ value while reducing the possibility of unexpected losses or damage to its reputation. Internal controls include policies, procedures and processes established by the Board of Directors to provide reasonable assurance on the safety, effectiveness and efficiency of the institution’s operations, the reliability of financial and managerial reporting and compliance with regulatory requirements.

Compliance in asset management has many meaningful objectives besides the adherence to regulatory authorities, such as enhancing risk management and controls to safeguard customers’ assets, combating money laundering and financing terrorism and establishing a code of conduct, amongst others.

Asset management firms should have in place an adequately staffed, permanent and independent compliance function to effectively manage compliance risks faced by the financial institution. This spans across implementing holistic anti-money laundering controls when conducting commercial operations and business activities to exercising due diligence on clients and third-party service providers and ensuring that asset managers conform to high ethical standards when dealing with clients’ assets.

Financial institutions should strive to stay ahead of emerging asset management regulatory changes in order to remain competitive in the field. Being equipped with a strong compliance unit will contribute to defining and setting a firm apart from its competition, while upholding its credibility in the industry.

Who is the Regulatory Authority in Singapore? 

Asset management compliance refers to the adherence to a set of legal standards and policies, which plays an integral role in the investment process to instill confidence in investors and to fortify the firm’s presence in the market.

Asset management firms are expected to conform to relevant rules, regulations, and laws stipulated by the local authorities. A financial  institution should also adopt adequate internal control practices to protect and enhance shareholders’ value while reducing the possibility of unexpected losses or damage to its reputation. Internal controls include policies, procedures and processes established by the Board of Directors to provide reasonable assurance on the safety, effectiveness and efficiency of the institution’s operations, the reliability of financial and managerial reporting and compliance with regulatory requirements.

Compliance in asset management has many meaningful objectives besides the adherence to regulatory authorities, such as enhancing risk management and controls to safeguard customers’ assets, combating money laundering and financing terrorism and establishing a code of conduct, amongst others.

Asset management firms should have in place an adequately staffed, permanent and independent compliance function to effectively manage compliance risks faced by the financial institution. This spans across implementing holistic anti-money laundering controls when conducting commercial operations and business activities to exercising due diligence on clients and third-party service providers and ensuring that asset managers conform to high ethical standards when dealing with clients’ assets.

Financial institutions should strive to stay ahead of emerging asset management regulatory changes in order to remain competitive in the field. Being equipped with a strong compliance unit will contribute to defining and setting a firm apart from its competition, while upholding its credibility in the industry.

What are some of the Professional Certifications in Singapore?

If you are considering a career in compliance, a university bachelor, post graduate degree in Banking and Finance, Economics and Law can give you a head start. You may also explore professional certification such as Certified Anti-money Laundering Specialist by ACAMS or International Compliance Association’s qualifications. In addition, IBF has certifications and accredited programmes in Compliance which finance professionals can take up to advance their careers. Although professional certification is not compulsory for all compliance officers, it can help to give you a competitive edge during hiring. 

How to start a Career in Compliance?

Fresh graduates with no relevant experience or operational knowledge can start off with roles that covers Anti-Money Laundering (“AML”), customer due diligence (“CDD”) and know-your client (“KYC”).

There are many experienced hires who do not hold any professional certificates; however, they do have extensive back-office experiences in operations, trade settlement or even background in accounting. Hence, they can quickly bridge the gap between the operational and compliance functions.

Other than qualifications or relevant experiences, there are a few soft skills that will enable you to have a good start in compliance:

1. Meticulous and detailed-oriented in the implementation of the required policies and procedures.

2.People oriented as the compliance role requires one to be constantly working with people from different backgrounds and departments. The compliance function requires the person  to be objective, assertive, and  clear in giving  feedback  

3. Clear and confident communication is important as the abnormalities must be highlighted by the compliance professional to the senior management.

If you possess such soft skills, this is the first step in your journey to a career in compliance.

Written and contributed by Jovi Gan, Lymon Pte Ltd.