Asset managers are central to meeting the region’s savings and retirement needs, through portfolio diversification that helps investors navigate market volatility and invest for the long term, according to Chia Der Jiun, Managing Director of the Monetary Authority of Singapore (MAS).
While regulators have a role in putting appropriate frameworks in place, coordinated efforts with market participants are needed, Chia said at the IMAS Annual Investment Conference 2025 on Wednesday.
Resilient markets are underpinned by several components including transparency, market integrity, and settlement efficiency, as well as a diversity of participants with a myriad of strategies to provide depth and two-way flows.
Market function has generally remained resilient through periods of stress, including through the sharp market repricing of risks and uncertainty in April. But there have also been episodes otherwise – such as the volatility in Japanese equities in August and the surge in the 10-year Treasury yields earlier this month.
Asset managers, Chia urged, must implement robust liquidity and market risk management frameworks, including regular stress testing, to assess portfolio risks under conditions of heightened volatility and broken correlations as well as the ability to manage redemption spikes during adverse market movements.
Global regulatory bodies such as the FSB and IOSCO have called for further enhancements to strengthen the industry’s resilience in both normal and stressed market conditions, by reinforcing consistency between the funds’ investment strategy and liquidity of fund assets, with redemption terms.
In line with this, MAS will study the need to review the current framework for liquidity risk management by asset managers and engage the industry when ready.
In addition, product distributors and providers should ensure marketing and advertisements are fair and balanced. They should avoid highlighting features that may not be sustainable across different scenarios, as their sudden withdrawal could lead to a loss of confidence and increased redemptions.
Clear and timely disclosures must also be provided to investors to support informed decision-making in fast-changing market conditions.
On its part, MAS is closely monitoring Singapore’s foreign exchange and Singdollar money markets while also coordinating with global central banks to track the functionality of key funding markets in the current environment.
Separately, MAS is also currently consulting on a framework for private market investment funds for retail investors.
Private market investments such as private equity and infrastructure have longer horizons and different risk profiles compared to public markets. Retail investors may seek exposure to these assets as part of a well-diversified portfolio.
MAS is awaiting feedback from all IMAS members as the association works towards developing a balanced and risk-calibrated framework to support the growth of a robust and sustainable market for retail funds.
