Singapore’s financial regulatory authority, the Monetary Authority of Singapore (MAS), has taken a stern stance against the founders of Three Arrows Capital, issuing nine-year prohibition orders (POs) on Zhu Su and Kyle Livingston Davies. This decision comes after a series of regulatory breaches committed by TACPL and its senior management.
According to the official press statement, Zhu Su, the former Chief Executive Officer and Director of Three Arrows Capital Pte Ltd (TACPL), and Kyle Livingston Davies, the former Chairman and Director, are now prohibited from engaging in any regulated activities.
From September 13, 2023, these prohibition orders prevent individuals from participating in the management of any capital market services firm under the SFA. Additionally, they are also restricted from possessing substantial shares in such firms.
Series Of Regulatory Breaches By Three Arrows Capital
MAS’s move follows a series of regulatory breaches by TACPL. In June 2022, the authority reprimanded TACPL for providing false information to MAS, failing to notify changes in directorship and shareholdings, and exceeding the permitted assets under the management threshold for a registered fund management company.
Subsequently, MAS launched further investigations that unveiled additional contraventions committed by Three Arrows Capital between August 2020 and January 2022, as per the press release.
These violations included TACPL’s failure to promptly notify MAS about the employment of Mr. Cheong Jun Yoong Arthur as a portfolio manager who engaged in fund management activities on behalf of TACPL.
Furthermore, in January 2022, TACPL misrepresented to MAS that Mr. Cheong was not involved in regulated activities when, in fact, he had been conducting fund management on behalf of the firm.
Another concerning aspect revealed by MAS was Three Arrows Capital’s lack of an appropriate risk management framework for cryptocurrency and digital asset investments. As directors of TACPL, Zhu Su and Kyle Livingston Davies were found to be primarily responsible for these lapses in regulatory compliance.
Loo Siew Yee, Assistant Managing Director at MAS, emphasized the importance of senior management implementing robust risk management measures to protect investor interests.
She stated:
MAS takes a serious view of Mr Zhu’s and Mr Davies’ flagrant disregard of MAS’ regulatory requirements and dereliction of their directors’ duties. MAS will take action to weed out senior managers who commit such misconduct.
Nonetheless, this move by MAS underscores the commitment of Singapore’s financial regulatory authorities to maintain the integrity and transparency of the financial markets within the country. It sends a clear message that regulatory violations will not be tolerated, and those responsible will face significant consequences.
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