Discretionary Investment Management Agreement Template for Singapore

A Discretionary Investment Management Agreement is essential when you want to delegate investment decision-making authority to a professional fund manager in Singapore. This legally binding contract establishes the terms under which an investment manager can buy, sell, and manage your investments without requiring your approval for each transaction, while ensuring compliance with Singapore's stringent financial regulations.

When do you need this document?

You need this agreement when engaging a licensed investment manager to handle your portfolio with full discretionary authority. This is common for high-net-worth individuals who lack the time or expertise to actively manage their investments, institutional investors seeking professional portfolio management, family offices requiring structured investment governance, and clients wanting access to sophisticated investment strategies typically unavailable to retail investors. The agreement is also mandatory when establishing managed accounts with Singapore-based fund management companies or when appointing sub-managers for specific asset classes or geographical mandates.

Key legal considerations

The agreement must clearly define the scope of discretionary authority, including which assets the manager can trade and any investment restrictions or prohibited investments. Fee structures require transparent disclosure, including management fees, performance fees, and expense allocations to comply with MAS guidelines on fair dealing. Client protection clauses are crucial, covering how client assets will be segregated, custodial arrangements, and conflict of interest management. The document should specify reporting requirements, including frequency and content of investment reports, and establish clear termination procedures. Risk management provisions must outline how the investment manager will monitor and control portfolio risks, while indemnity clauses should protect both parties from specific liabilities without compromising regulatory compliance.

Legal requirements in Singapore

Under the Securities and Futures Act, investment managers must hold appropriate licenses from the Monetary Authority of Singapore before providing discretionary investment services. The agreement must comply with MAS Guidelines on Standards of Conduct, which require clear disclosure of fees, risks, and potential conflicts of interest. Client assets must be properly segregated and held with approved custodians as mandated by the SFA. The Financial Advisers Act requires specific disclosures about the investment manager's qualifications, track record, and any material interests in recommended investments. Personal Data Protection Act compliance is essential when handling client information, requiring appropriate data protection clauses and consent mechanisms. The agreement must also incorporate MAS requirements for client suitability assessments, ongoing monitoring obligations, and record-keeping standards to ensure regulatory compliance throughout the investment relationship.