The Monetary Authority of Singapore said it will review the regulation of the city-state’s fund management industry, including hedge-fund and private-equity managers and how they interact with investors.

The authority “will consult the public within the next two weeks on proposals to enhance our regulatory regime to ensure that it remains sound and responsive to the changing needs of the various stakeholders in the fund management industry,” the regulator said in an e-mailed reply to queries from Bloomberg News. “This is essential for the long-term and sustainable growth of the fund management industry.”

Hedge funds and private-equity firms are under scrutiny from regulators and lawmakers worldwide who say they are partly to blame for the worst financial crisis in a generation. Singapore’s hedge-fund industry has grown to Asia’s second- biggest behind Hong Kong as the government lured investment management professionals with tax incentives and grants.

The regulator has set up the Investment Intermediaries Department to supervise intermediaries in the fund management industry, including alternative investment managers, and to “drive regulatory policies” on the industry, according to the statement.

“MAS adopts an open and consultative approach with the industry, and remains committed to building Singapore as a fund management and alternative investment hub,” the regulator said. “Singapore’s fund management industry has developed strongly in recent years. We now have a vibrant community of hedge fund, real estate and private equity managers which add diversity to the broader asset management industry.”