MAS issued the consultation paper on 17 December 2025 to seek feedback on proposed updates to the Guidelines. The MAS responses and updated Guidelines were published on 2 July 2026. Below is a summary of the key points. FMC is expected to apply and adopt the liquidity risk management practices set out in these Guidelines in a manner that is proportionate to its size, scale and complexity of its business and the profile of the funds that it manages.
- Alignment between redemption terms and liquidity of fund assets
- Principles based approach where the FMC determines the appropriate liquidity classifications and notice or settlement periods for their funds.
- Adoption of ADTs
- Adoption of at least one ADT is most relevant to an FMC managing open-ended CIS that are constituted in Singapore and have been authorised by MAS.
- FMC managing other CIS (ie. not authorised open-ended schemes) should have provisions for at least one suitable tool – preferably ADT – and not rely solely on suspension or gating.
- Where the use of ADTs under normal market conditions may not be suitable, an FMC should make provisions for at least one ADT as a contingency measure.
- Imposition of liquidity costs to transacting investors
- FMC managing other CIS (ie. not authorised open-ended schemes) that have ADTs in place should also have provisions to factor in liquidity costs when calibrating the liquidity management tools.
- Estimating implicit costs, including market impact costs, should be adopted on a best-efforts basis.
- Enhancing disclosures
- FMC is expected to provide qualitative disclosures on the methodology and approach for the design and activation of liquidity management tools.
- Open ended CIS to disclose Overview of the investment strategy and the potential liquidity risks; Features of the redemption terms, such as the dealing frequency, lock-up period, and/or notice and settlement periods; and Objective and circumstances under which the tools may be activated.
- Illustrative examples of good disclosure practices are provided in Annex A of the Guidelines.
- Ongoing monitoring
- Regularly monitor market depth, liquidity and concentration of portfolio positions, so that liquidity risks arising from margin and collateral calls are adequately managed and mitigated.
- Regular reviews to assess the effectiveness of the liquidity management tools applied and whether additional tools should be put in place to manage liquidity mismatches and provide fair treatment of all investors, where relevant.
- Assessment of liquidity of CIS’ assets
- Monitor the CIS’ liquidity risk to ensure that the CIS can meet all margin and collateral obligations under normal and stressed market conditions, whilst maintaining sufficient contingency funding.
- Use appropriate liquidity metrics or indicators relevant to the CIS’ investment strategy.
- Implementation and transition period
- Effective six months after the revised Guidelines are published (ie. deadline is 1 January 2027).
- Update offering documents and prospectuses (e.g. to incorporate ADT provisions) at the time of the next annual prospectus submission.
For the full details of the responses to the consultation paper, refer to https://www.mas.gov.sg/publications/consultations/2025/consultation-paper-on-updates-to-the-guidelines-on-liquidity-risk-management-practices
For the full details of the updated Guidelines, refer to https://www.mas.gov.sg/regulation/guidelines/guidelines-sfa-04-g08-liquidity-risk-management-practices-for-fund-managers
Disclaimer: The information, views or opinions expressed are provided for general information and should not be relied upon as legal or professional advice.