The Essential Guide to a Fund Manager Compliance Health Check in Singapore

Before you read this. This is our own reading of the instruments as they stood on 18 August 2026: the Acts, the Regulations, the Notices and the Guidelines, with the amendments in force on that date. Compliance material dates quickly, and a notice can be revised without any of the commentary around it changing. Check the current text before acting on anything here. Where our reading and the regulator’s text differ, the regulator’s text governs.

The most effective way to manage a MAS inspection is to have already run one on yourself. For many directors, the volume of MAS Notices and Guidelines can feel like a moving target, and internal teams rarely have the capacity to step back and scrutinise their own framework while running the desk. A compliance health check is the structured way to do that stepping back, and this guide explains what one is, what it covers, and what good looks like.

What a compliance health check is, and what it is for

The regulatory landscape for asset management in Singapore is defined by precision and high expectations. Fund managers are expected to keep measuring their operations against the Securities and Futures Act 2001, and a health check is the proactive version of that: a review that finds the gaps before a formal engagement does, rather than during one. It is not the same as an internal audit. Where an audit tends to look at broad controls or financial reporting, a health check goes into the operational detail, how the policies are actually applied in the front and middle office, not just whether they exist on paper.

For directors, that distinction matters. A framework that reads well but is not followed on the desk is the exact thing an inspection surfaces, and it is the exact thing a health check is designed to catch first.

Keeping steady in a shifting environment

MAS keeps refining its expectations for Capital Markets Services licence holders, from liquidity risk management to fit-and-proper criteria, and each change is a chance for a framework to drift out of date. A health check is how a firm keeps pace deliberately rather than reactively, translating the instruments into what they mean for daily operations and catching the drift early, before it becomes the reactive scramble that so often precedes an inspection.

The core components of the review

A thorough review starts with the infrastructure of the compliance function. It looks at whether the enterprise-wide risk assessment actually reflects the current scale and nature of the business, and at the connection between the risks a firm has identified and the controls meant to mitigate them. It asks whether management training is effective or a box-ticking exercise, and whether the framework still fits as the business scales and enters new markets.

Documentation and policy

The foundation of any regulated firm is its compliance manual, and it has to be kept current against recent legislative changes and evolving expectations. A health check tests whether the manual is decisive and clear enough for staff to actually use, and whether it aligns with the MAS Guidelines on Licensing and Conduct of Business for fund managers (SFA 04-G05). A rulebook that is hard to navigate is a rulebook that gets ignored.

Testing behaviour against the rulebook

A manual on a shelf offers little protection if behaviour does not match it, and this is where a health check earns its keep. It tests operational behaviour through record sampling, checking whether staff actions match the documented procedures in real cases: sampling onboarding files and transaction-monitoring records to find the gaps between what the boardroom designed and what the desk executes. The point is to verify a genuine culture of compliance, not just the existence of one.

Identifying gaps in AML and CFT frameworks

Anti-money-laundering and countering the financing of terrorism are the most scrutinised areas in any engagement. Fund managers must comply with MAS Notice SFA04-N02, and here a reader who half-remembers the landscape needs a correction: if you last found this notice under the Securities and Futures Act, look again. The AML/CFT notice-making power for capital markets intermediaries now sits under the Financial Services and Markets Act 2022, the older SFA version of the notice was cancelled with effect from 1 July 2025, and the current SFA04-N02 is issued under the FSM Act 2022. The notice did not go away; it changed the Act it lives under.

A common point of confusion is the threshold used in other regimes. Precious stones and precious metals dealers work to a S$20,000 customer due diligence trigger, and that threshold does not apply to fund managers. Under the MAS regime, customer due diligence and ongoing monitoring apply to every investor regardless of the amount, and the duty to disclose suspicion under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act carries no threshold either. A health check confirms these obligations are being met consistently across the whole investor base, not just the large tickets.

Screening and due diligence

Sanctions screening is a non-negotiable part of the framework, and it carries no monetary threshold: screening happens before dealing with any counterparty or investor. A common finding in a gap review is thin documentation on higher-risk investors or politically exposed persons, where enhanced due diligence is needed to establish source of wealth and source of funds, and firms lean too hard on third-party declarations rather than establishing the facts themselves. A health check tests the screening hits and the resolution process, because a screening record that cannot be explained is not a defensible one.

The enterprise-wide risk assessment

The enterprise-wide risk assessment is often the first document a regulator asks for. It has to be a living document that reflects the firm’s specific risk profile, the nature of its funds and the jurisdictions its investors sit in. Proliferation financing is now folded into the definition of money laundering in the notice, so every existing control has to cover it. The frequent failing is an assessment that is too generic, or that has not kept up with how the firm actually operates now. A health check looks at whether the assessment captures the real inherent risks and the real effectiveness of the controls, moving it from a static template toward a document that shows the firm understands its own environment.

Preparing for an MAS inspection

An inspection is a methodical evaluation of a firm’s adherence to the standards. The sensible time to run an internal readiness review is three to six months before any anticipated engagement, while there is room for a deep look at the workflows without the pressure of a live inquiry. That review also confirms that the periodic returns MAS requires are accurate, complete and filed on time.

Organising a mock inspection is one of the more useful steps. It familiarises staff with the nature of regulatory questioning and the level of detail expected, and it surfaces where a verbal explanation diverges from the written policy, which is exactly what an inspector probes.

The remediation roadmap

Finding a gap is only half the exercise. The other half is a structured remediation roadmap that prioritises findings by regulatory risk and operational impact, with the high-risk items, such as AML or CFT control deficiencies, taken first. Reading past MAS enforcement actions is a good source of what the regulator treats as serious, and a roadmap built that way lets a firm close gaps in policy or documentation before an inspection rather than during one.

Training readiness

Management is expected to show a culture of compliance that runs through the organisation, and a health check tests whether the training records are sufficient and whether they reflect the risks the firm actually faces. The regulator expects training to be updated for new requirements, such as proliferation financing, rather than repeated year to year, and it expects staff to understand their obligations, including under the CDSA, with clear internal reporting lines.

Bringing it together

A health check moves a firm from a reactive posture to a state of readiness, by aligning the enterprise-wide risk assessment with current expectations and testing the AML/CFT controls against real behaviour rather than the manual. It is a continuous exercise, not a one-off, and it is most useful run on a schedule rather than in the weeks before an inspection.

If you would like a professional view of where your framework stands, you can book a scoping call with Azentiq Nexus Consulting to talk it through.

Disclaimer

This article is published by Azentiq Nexus Consulting LLP. It is general information about regulatory obligations. It is not legal advice, and it is not compliance advice for your particular circumstances.

Azentiq Nexus Consulting LLP is a compliance consultancy. We are not a law firm and we do not advise on law. We are not licensed by the Monetary Authority of Singapore and we are not registered with the Ministry of Law. We advise regulated firms; we are not one. What we advise on is a firm’s own regulatory obligations, not the raising of funds or offers of investments to investors.

Regulations, thresholds and published guidance change. This article reflects our understanding at the time it was written and may not reflect the current position. Always check the current text published by the relevant regulator, and take advice on your own facts before acting.

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