SINGAPORE: MAS Proposes to Introduce Due Diligence Requirements for Corporate Finance Advisers

Friday December 17 2021

On 15^th December 2021, the Monetary Authority of Singapore (MAS) has issued a consultation paper to raise the standards of conduct of corporate finance (CF) advisers by introducing baseline requirements for due diligence work performed. These requirements will improve the quality of disclosures from entities seeking to raise funds from the public, thus allowing investors to make informed decisions.

CF advisers are currently required to have effective internal controls to address the risks associated with their activities and mitigate conflicts of interests that may arise from these activities. The proposed requirements set out the minimum standards which CF advisers should adhere to when conducting due diligence on CF transactions. Under the proposal, CF advisers will be required to –

• Exercise reasonable judgement in determining the scope of the due diligence work to be performed on a CF transaction;
• Assess the veracity of information obtained in the course of their due diligence;
• In relation to their role as issue managers of initial public offerings (IPOs), satisfy additional requirements such as assessing the suitability of listing the applicant and conducting an independent review of the due diligence performed by the team responsible for advising on a specific IPO.

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