By listing hedge funds on SGX, these funds will be more visible to institutional and accredited investors. In addition, a listing on SGX raises disclosure standards. As hedge funds are highly specialised investment pools offered to institutional and accredited investors, the listing rules and on-going obligations will be less onerous as compared to conventional funds. Correspondingly, the listing process will be faster. While eligible hedge funds will be listed, there will be no trading in their units on SGX. Typically, issue and redemption takes place in the over-the-counter market.
Mr Lawrence Wong, Senior Vice President and Head of Listings at SGX said, ““As we continually broaden our services to meet the demands of the industry, offering this new listing platform will add value to our customers by enabling hedge fund managers to better meet the needs of their investors.”
As an investment fund, the listing of hedge funds will be regulated within the existing framework for investment funds with necessary adaptation. Following the recent public consultation and in response to the feedback received, the new listing rules for hedge funds will have the following key features:
- A hedge fund must :
- be authorised or recognised under section 286 or 287 of the Securities and Futures Act; or
- be offered only to institutions and/or accredited investors.
- have a minimum asset size of at least S$20 million or US$20 million for Singapore and foreign currency denominated funds respectively.
- Fund managers are required to have in place an independent risk management function.
- The investment manager of a hedge fund is expected to have at least one principal with a minimum of five years relevant investment management experience.
- A hedge fund will announce its net asset value per unit, as soon as practicable after each month end, but in any event no later than seven business days. In addition, a fund must immediately announce any material change in relating to its operations, including but not limited to, any change in its investment manager, custodian, administrator or independent auditor.
