In Singapore, a Capital Market Service license ( CMS ) is required for entities that provide certain financial services. Obtaining a CMS license can bring many benefits to your business, such as offering a broader range of services and greater funding access. This article will explain what services require a CMS license in Singapore and the benefits of having one.
What is a CMS License in Singapore and What Can You Do With It?
A Capital Market Service (CMS) license is a type of business license that enables a company to offer regulated capital markets activities, such as fund management, securities dealing, corporate finance advice, and REIT management. These services include investment banking, securities dealing, Futures trading, and fund management. A company must meet certain eligibility criteria set by the Monetary Authority of Singapore (MAS) to obtain a CMS license.
Once a company has been granted a CMS license, it will be subject to ongoing regulation by MAS. This includes requirements such as maintaining adequate capital levels, keeping accurate records, and putting in place risk management systems. Licensees must also disclose information about their business to potential investors.
The CMS license regime was introduced in 2004 in response to the globalization of the financial industry. MAS aims to promote stability and confidence in Singapore’s capital markets by establishing a regulatory framework for the financial services sector.
Top Benefits of Holding a CMS License in Singapore
The benefits of a CMS license in Singapore include expanded access to financial markets, enhanced credibility, global recognition, and the ability to offer a wide range of regulated services such as dealing in capital market products, providing custodial services, and credit rating services. This license is essential for businesses that want to offer these services to clients in Singapore. Applying for a CMS license is straightforward, and the requirements are not overly demanding. Once a business has been granted a CMS license, it can operate without significant restrictions. This makes it an ideal option for companies that want to offer these services in Singapore.
How to Apply for a CMS License in Singapore (MAS Guide)
The Monetary Authority of Singapore (MAS) regulates the activities of Capital Market Service (CMS) License holders in Singapore. You will need to have a valid CMS License before carrying out any regulated activities, such as dealing in capital market products, fund management, providing custodial services, financial advisory services, or operating a registered business trust.
Suppose you are an individual or corporates who wants to carry out any regulated activities under the Securities and Futures Act (SFA). In that case, you will need to apply for a CMS license from MAS. To start, you will first need to pass the relevant proficiency examinations conducted by the Institute of Banking and Finance (IBF) or have at least 3 years of relevant work experience. You will also have to meet MAS’s specific fitness and propriety criteria, such as good character, financial soundness, and integrity. However, these exams are not relevant for all the categories of fund management licenses.
Once you have met these requirements, you can submit your application online via the Business Licensing Portal. You will be required to provide information on your educational qualifications, work experience, and employment history and declare any criminal records, bankruptcy proceedings, or unsatisfactory professional conduct findings against you. This also includes the relevant experience related to funding management business and activities
After MAS has received your application, they may contact you for an interview. Once your application has been approved, you will be issued a CMS license valid for 3 years. You will need to renew your license before it expires if you wish to continue carrying out regulated activities in Singapore.
Whether you’re a local startup or an international firm entering the Singapore financial market, understanding the uses and benefits of the Capital Market Services License is key to gaining a competitive advantage and ensuring long-term sustainability.
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