The Monetary Authority of Singapore (MAS) has taken significant regulatory action by issuing nine-year prohibition orders (POs) against Mr. Zhu Su and Mr. Kyle Livingston Davies. These prohibitions stem from their involvement in contraventions of the Securities and Futures Act 2001 (SFA) and Securities and Futures (Licensing and Conduct of Business) Regulations (SFR). Mr. Zhu held the position of Chief Executive Officer and Director at Three Arrows Capital Pte Ltd (TACPL), while Mr. Davies served as the Chairman and Director.
MAS Prohibition Orders
Effective as of September 13, 2023, these prohibition orders imposed on Mr. Zhu and Mr. Davies encompass a comprehensive range of restrictions. Notably, they are barred from engaging in any regulated activity and are prohibited from participating in the management of, acting as directors for, or becoming substantial shareholders in any capital market services firm under the jurisdiction of the SFA.
The genesis of these prohibition orders traces back to MAS’s reprimand of TACPL in June 2022, which resulted from several transgressions. These included providing false information to MAS, neglecting to report changes in directorship and shareholdings involving Mr. Zhu and Mr. Davies, and exceeding the allowable assets under management threshold for a registered fund management company. Subsequently, MAS undertook additional investigations into TACPL, uncovering further violations of the SFA and SFR between August 2020 and January 2022.
TACPL’s Compliance Lapses
During this period, TACPL failed to notify MAS about the employment of Mr. Cheong Jun Yoong Arthur as a portfolio manager, responsible for fund management activities on behalf of the company—an infringement of SFR regulations. In January 2022, TACPL provided false information to MAS by inaccurately stating that Mr. Cheong did not perform any regulated activity during his tenure, despite evidence of his fund management activities from August 2020 to September 2021. Additionally, TACPL was found to lack an appropriate risk management framework to identify, monitor, and address risks associated with cryptocurrency and digital asset investments under its management.
Responsibility for ensuring TACPL’s compliance with regulatory requirements under the SFA and SFR primarily rested with Mr. Zhu and Mr. Davies as directors of the company. MAS’s investigations revealed their failure to fulfil these duties, directly contributing to TACPL’s regulatory breaches. Ms. Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime) at MAS, emphasized the importance of robust risk management measures implemented by senior management in fund management. She expressed the regulatory authority’s strong stance against Mr. Zhu and Mr. Davies’ blatant disregard for MAS’ regulatory requirements and their negligence in carrying out their directorial responsibilities. MAS has committed to taking decisive action to address such misconduct among senior managers within the industry.