What Are the Requirements for Record-Keeping in Fund Management Companies?

Introduction to Record Keeping Requirements for Fund Managers

It is not only required by law: maintaining proper records is essential in Singapore’s regulated financial services for supervision, statement of integrity, and safeguarding interests of investors. Fund Management Companies (FMCs), of any kind, like LFMCs, RFMCs, or VCFMs, must maintain accurate records according to the rules set by the Monetary Authority of Singapore (MAS). Following the MAS record-keeping requirements for fund management companies ensures compliance and investor trust.

This article focuses on the laws and requirements involved in record-keeping, outlines the various types of records required, gives guidelines for keeping records, outlines the possible consequences of not complying with those needs.

Regulatory Framework and Legal Obligations

FMCs in Singapore should follow the rules in the Securities and Futures Act (SFA), along with its subsidiary rules, one of which is the Securities and Futures (Licensing and Conduct of Business) Regulations (SFR(COB)). The MAS publishes Notices and Guidelines to give guidance and outline what is expected in these laws.

It is required by law that FMCs preserve accurate, complete, and quickly accessible records to help with overseeing bodies’ work. The main aim is to let companies restore their finances, show their understanding of investment decisions, and prove their adherence to regulations and orders from clients.

They are designed under the principle of openness and also of being held accountable. It is MAS’s expectation for fund managers to have obvious guidelines in place so that records are captured, stored safely, and sometimes checked. During any inspection or review, records may be asked for and if they are not given reliably and right away, it can be viewed as a misconduct offense.

Types of Records Fund Managers Must Maintain

It is important that FMCs keep track of many types of documents covering every part of their business activities. Such documents are found in all areas like dealing with clients, managing finances, making investment decisions, paying attention to compliance, and governing the corporation. The records you have to manage are mostly divided into these three categories.

Client Due Diligence and Onboarding

You must keep records that relate to your legal efforts to know your customers and to do customer checks. For this purpose, you must collect client ID papers, evidence of beneficial owners, risk assessment files, and extra due diligence papers for risky clients. These are part of the client due diligence and transaction record obligations in Singapore, which regulators review during inspections.

Transaction Records

Every time an investment-related transaction is carried out, the details should be entered into the record. It is necessary for these records to have information about trade date, time, who the trade is with, the amount, price, and the broker handled the trade. It is expected that fund managers store copies of trade confirmations, contracts, as well as statements received from custodians and counterparties. If anyone has authority to trade, the reasons behind investment decisions must be documented.

Fund Accounting and Valuation

Any files dealing with fund accounting, like NAV, pricing, and value assumptions, need to be kept safe. Because of this, regulators and auditors are able to check the honesty of reports and the correctness of the financial statements. Any papers that explain how illiquid or complex instruments are priced must be held and can be looked at when needed.

Financial and Regulatory Reporting

FMCs should store a copy of every financial report they send to MAS, which are Capital Adequacy Returns, the Annual Business Profile, and their Audited Financial Statement. Also, the company should have internal working papers and letters from auditors, together with resolutions from the board approving the reports. Businesses belonging to bigger groups may have to maintain combined financial reports.

Correspondence and Communication

MAS requires FMCs to save all important business documents, no matter if they are physical or digital. Part of this is emails, letters, meeting minutes, and call recordings about client orders, investments, or requirements. As digitization grows, companies should make sure their data gathering practices include messages sent via messaging systems and applications too.

Internal Policies and Procedures

The most recent editions of company policies related to risk management, compliance, ethics, valuation, and conflicts of interest have to be kept together with the logs of any amendments, who the policies were given to, and if they were applied correctly. During its inspections, MAS looks into these documents to check how fair and compliant the firm is in its operations.

Retention Periods and Accessibility

The law requires that any crucial records be held for at least five years, starting from the date of the transaction, contact with a client, or the point the business relationship ends—whichever is latest. Depending on the risk involved and the rules in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, the minimum time for keeping KYC and STR records may change.

Besides keeping records, they also need to be accessible when needed. MAS needs records to be kept in a format so that they can be efficiently checked during an inspection. It is necessary to organize, record, and save both paper and digital documents.

Because most FMCs maintain their records online, MAS allows these records to be stored electronically if they are properly kept secured and accurate reproductions. Enterprises should make certain that their electronic records can be read long after the storage system or vendor may have been upgraded.

Even if the FMC use third parties for record-keeping, it is still responsible for meeting all regulatory rules. A proper service level plan, a non-disclosure clause, and preparedness for possible issues are all important.

Data Security and Confidentiality Requirements

With increasing cybersecurity threats and heightened regulatory focus on data protection, FMCs must adopt stringent safeguards to protect sensitive information. Records, particularly those involving personal client data, financial details, or strategic investment decisions, must be protected from unauthorized access, loss, or alteration. These rules reflect the data security and confidentiality standards for FMCs, ensuring that sensitive information is always secure while maintaining regulatory compliance.

According to MAS, FMCs should use different forms of security such as encryption, managing access, monitoring activity, and keeping data backup. All workers should learn about data security rules and always use safe practices to handle and share information.

Trust in fund management grows when confidentiality is treated as a key factor. Personal information should not be given to someone who is not allowed to view it unless required by law or approved by the clients. Within the organization, people should only be granted access to records that they need for their roles.

Along with the above, FMCs need to check that how they record data follows the guidelines of Singapore’s data protection laws. The process involves getting consent from clients to use their data, handling data sent to other countries, and informing regulatory bodies of any hacks whenever they occur.

Consequences of Poor Record-Keeping and Best Practices

Not keeping clear records may bring serious problems to FMCs. MAS has the capacity to fine companies, stop them from operating, or cancel their licenses if their activities turn out to be severe enough. If record-keeping is not done properly, this can decrease investors’ confidence, interfere with how things are done, and expose the firm to problems, mainly from client disputes or regulatory visits.

FMCs ought to put in place best practices that give their records the qualities of consistency, reliability, and auditability. They can be anything such as:

• Creating a file system that allows all users to work from the same source and provides access controls.
• Ensuring that the job of coordinating record-keeping is trusted to a compliance or operations officer.
• Keeping up regular checks at the workplace to keep the gaps in order or secrecy at bay.
• Creating a log of when new documents are made and when existing ones are changed and opened.
• Updating the way records are kept whenever there are changes in rules and technology.

From time to time, you should also test the process of retrieving records, mostly in organizations with numerous systems or more staff. Being able to get key records fast during inspections or questions from clients reflects both obedience to regulations and the standard of the company’s management team.

Conclusion

It is very important to maintain proper records when following compliance and good governance practices. FMCs must ensure that their MAS records are correct, complete, and easily available so that the company is open with the regulators and protects its clients.

If fund managers know what records to hold, follow retention policies, store confidential information carefully, and include strong habits in their daily work, they will comply with the rules and also enhance how resilient and trusted they appear to their competitors.

Nowadays, digital financial organizations need proper records, since they bring real value to the business.