Valuation under the spotlight: strengthening governance, rigour and investor confidence

The MAS’s recent information paper on valuation practices for fund management companies (FMCs), drawing on thematic inspections across both large and smaller FMCs managing public and private assets, sends a clear message. Valuation is no longer a back-office exercise. It is a front-line governance priority.

Supervisory expectations are shifting beyond methodology design towards demonstrable independence, rigour and consistency in execution. For FMCs, valuation is now firmly in the regulatory spotlight.

 

Independence remains the cornerstone

MAS makes it clear that valuation must be independent, whether through third-party providers or properly segregated internal functions. However, supervisory findings show that independence does not always work effectively in practice, particularly for complex or illiquid assets.

FMCs are expected to ensure clear separation from portfolio management, supported by strong oversight and effective challenge. This may include enhanced governance structures, independent review processes and, where needed, external validation. For smaller FMCs, where full segregation may be more challenging, proportionate controls and external oversight play a more critical role.

In essence, independence must be real, demonstrable and consistently applied.

From policy to practice

Valuation policies and procedures should cover all asset types, methodologies and controls.

MAS’s findings highlight a recurring gap between what is documented and what is done in practice. In several cases, policies did not reflect actual processes, lacked clear guidance on exceptions, or were not applied consistently. Deviations from the policy were not always documented or approved.

The paper shows execution now matters as much as design. FMCs must ensure policies are practical, up to date and embedded in day-to-day operations, supported by clear ownership and robust documentation.

Price validation: from checks to challenge

Price validation remains a critical control for ensuring accurate valuations and reliable NAV calculations. MAS expects FMCs to apply independent checks, set appropriate thresholds and escalate issues promptly.

MAS highlighted weaknesses in identifying stale prices, setting suitable tolerance levels, and following up on exceptions in a timely manner.

The focus is shifting from detection to action. FMCs are expected to move beyond routine checks towards a more disciplined challenge process, using multiple data sources, clear escalation protocols and timely intervention.

Valuation methodologies: complexity demands rigour

Valuation is becoming more complex, particularly in private markets and digital assets where judgement and models play a greater role. MAS observed issues such as overly optimistic assumptions, delayed adjustments and limited validation of inputs.

Importantly, accountability remains with the FMC, even where third parties are involved. FMCs must understand, challenge and validate the assumptions underpinning valuations.

Fundamentally, valuations must be fair, timely and well supported, especially where they directly affect investor outcomes.

Looking ahead

What stands out from MAS’s findings is the emphasis on outcomes. Valuation is no longer viewed in isolation. It sits at the intersection of governance, investor protection and control effectiveness.

Weak valuation practices can have direct consequences, impacting investor fairness, fund performance and fee calculations. As funds continue to diversify into more complex asset classes, valuation will remain firmly on MAS’s agenda.

For FMCs, the message is clear: robust valuation is not just a control function, it is a cornerstone of trust.

How Ocorian can help

As valuation expectations continue to evolve, FMCs need practical and scalable solutions.

Ocorian supports FMCs by:

• Enhancing valuation independence – reviewing governance structures, reporting lines and controls to strengthen oversight and challenge

• Designing and embedding policies and controls – ensuring frameworks reflect actual processes, including fair value triggers and exception handling

• Enhancing third-party oversight – supporting due diligence and ongoing monitoring of administrators, valuers and pricing providers

• Improving documentation and audit readiness – ensuring valuation decisions and judgements are clearly evidenced

To find out how we can support your organisation, please contact us.

About the authors

Ching Soon Yeoh is a principal consultant at Ocorian with over 20 years of experience in the asset management industry supporting asset managers and financial services firms. He specialises in regulatory compliance, governance, AML/CFT and operational risk management, helping clients navigate Singapore’s complex regulatory requirements.

Billie Jo Dixon is the practice lead for Ocorian’s regulatory & compliance team in Singapore. She has over twenty years’ experience in financial services and is a respected expert in regulatory compliance. She helps firms decide if they need to be licenced in Singapore and guides them through the MAS licensing process and all aspects of being a licensed business.