Singapore unveils S$5 billion boost for fund managers, other moves to revive equities market

SINGAPORE’S capital markets look set to receive a liquidity boost, following the announcement of a S$5 billion investment initiative by a review group led by the Monetary Authority of Singapore (MAS) on Friday (Feb 21).

The new S$5 billion Equity Market Development Programme will channel funds to asset managers with a “strong investment track record” and a focus on Singapore-listed equities, MAS said.

Funded through its investment portfolio and the Financial Sector Development Fund, the programme aims to enhance market liquidity and support Singapore’s fund management ecosystem.

MAS will begin evaluating eligible fund managers and strategies in the coming months, with both local and international managers able to participate. New and existing funds will also be eligible.

“The end in mind is to be able to grow the capabilities and to grow the fund management industry here in Singapore,” said Second Minister for Finance Chee Hong Tat, who chairs the MAS review group.

Beyond strengthening the fund management ecosystem, the S$5 billion injection also seeks to boost trading liquidity and encourage more research into Singapore-listed companies, said Enterprise Singapore executive chairman Lee Chuan Teck, who leads the review group’s enterprise and markets workstream.

Investor scheme revision

Another key measure unveiled on Friday is a revision to the Global Investor Programme (GIP), which grants permanent residency to eligible foreign investors.

The Economic Development Board, which administers the GIP, will tighten requirements for family offices, requiring them to invest a more targeted proportion of their assets directly in Singapore-listed equities. The new criteria will apply only to fresh applicants.

Under the revised rules, single family offices must allocate at least S$50 million of their assets under management (AUM) into equities listed on Singapore-approved exchanges.

Previously, this capital could be spread across real estate investment trusts, private equity in Singapore-based businesses and other asset classes.

When asked if the revision would make the GIP less attractive to foreign investors, Chee noted that the S$50 million requirement constitutes only a “minority portion” of the broader S$200 million AUM requirement under the programme.

“The remaining S$150 million, they are still free to decide which asset class they want to invest in,” he explained.

“Of course, I hope that if we do well and the outcome is good, that… they will, on their own, decide to invest more because it makes commercial sense for them to do so,” he added.

Other measures to boost investor interest and liquidity include tax incentives for fund managers investing substantially in Singapore-listed equities, as announced by Finance Minister Lawrence Wong in his Budget statement on Feb 18.

The Grant for Equity Market Singapore (Gems) scheme, introduced in 2019 to support listings and expand the equity research ecosystem, will also be expanded.

This includes extending research coverage to pre-IPO (initial public offering) companies to raise awareness of such firms.

Research grants will also be enhanced to incentivise research firms to produce more reports on mid-and-small-cap enterprises, which receive less coverage than large-cap and index-listed companies.

Additionally, the scope of eligible research entities under the Gems scheme may be widened, along with broader dissemination channels – including social media platforms – for research publications.

MAS and the Singapore Exchange will provide further details on these enhancements by mid-2025.

Shifting regulatory stance

The review group on Friday also recommended adopting a more “pro-enterprise regulatory stance” alongside other measures to strengthen investor confidence.

“The regulatory measures will move Singapore decisively towards a more disclosure-based regime,” MAS said.

One key change involves consolidating listing suitability and prospectus disclosure reviews under Singapore Exchange Regulation (SGX RegCo), giving prospective issuers greater clarity on the listing process and timeline by requiring engagement with only one regulator.

Currently, companies seeking to go public must obtain clearance from MAS and SGX RegCo, with potential involvement from the Listings Advisory Committee.

The scope for merit-based judgment in admitting new listings will also be reduced, with SGX RegCo streamlining its qualitative admission criteria.

Rather than prescribing how issuers should mitigate risks before listing, the focus will shift to ensuring sufficient disclosure of material issues.

Prospectus requirements and listing processes will be streamlined, particularly in areas such as financial disclosures, interested person transactions, and conflicts of interest.

With these changes, the typical listing review process is expected to take six to eight weeks – similar to current timelines – but with greater certainty for prospective issuers.

SGX RegCo will also take a more targeted approach to post-listing queries, alerts, and trading suspensions, and will consult on a proposal to remove the watch-list.

MAS and SGX RegCo plan to issue consultations on these proposals by mid-2025.

Improving listings supply

To enhance Singapore’s appeal for new listings, measures include an enhanced 5 per cent concessionary tax rate on qualifying income for fund managers listing in Singapore.

To qualify, eligible fund managers must distribute a portion of their profits as dividends.

This is in addition to a 20 per cent corporate income tax rebate for new primary listings and a 10 per cent rebate for new secondary listings with share issuance, which were also announced by PM Wong earlier.

Friday’s announcements mark an update of measures from the MAS review group, following its Feb 13 tax incentive proposals.

Formed last August, the review group comprises private-sector stakeholders and public-sector representatives.

Its aim is to enhance the competitiveness of Singapore’s equities market by attracting investor interest, increasing the supply of quality listings, and streamlining the regulatory process for IPOs.