Singapore enhanced Fund Management Companies Regulations
Under the Monetary Authority, the government of Singapore has advanced FMCs’ regulations that supervise this sector’s operation. Besides, this fact means that the administration has raised the internal control of the parties that join this industry. The current regime state that every company that wants to get into the fund management operations in the country must either get a CMS, Capital Market Services license or excused from it.
How does the Monetary Authority of Singapore exempt a company from this license? Firms in the Fund Management sector mustn’t register for this license if they notify the authority that they are working with thirty or fewer investors. However, any other company working with more than thirty investors must register for the CMS license.
The Government of Singapore Fund management industry is currently operating under three categories of the Fund Management Companies. They include:
- Registered FMCs: In this category, the fund management sector companies have assets that don’t surpass S$250 million. Another qualification for this category is to have thirty or fewer investors, and among the thirty, fifteen or less are funds. If a company matches these qualities, then it is categorized in the Registered Fund Management Companies. The underlying investors are credited, and for the businesses to be legit under the government of Singapore, the management team must submit the necessary documents to the MAS.
- Licensed Accredited Investors FMCs: The second category doesn’t have many restrictions, and even companies with assets worth less than S$250 million can apply for this section. However, it is crucial to note that companies in this sector can only work with accredited investors. These firms can only start their operations after the MAS awards them the CMS license.
- Licensed Retail FMCs: Companies in this category don’t have any restrictions on the assets’ net worth or the types of clients the firm services. However, it has the same condition as the second category since companies must receive the CMS license before they commence.
The current Fund Management Regulatory regime has other vital sectors you must pay attention to before venturing into the business, including:
Conduct of Business
All the fund management firms must follow the business conduct rules where they keep records, give clients’ statements, disclose agreements, and follow the necessary restrictions in financial promotions. Also, the companies must register all their assets or place them under an authorized custodian. The companies must have a compliance individual; the registered category can choose not to get an independent person. The Licensed AI sector must obtain an independent compliance person but can work part-time, while for the Licensed Retail industry, they must get a full-time compliance person.
The FMCs under the Registered and Licensed AI category must have a base capital of at least S$250,000 at all times, while the Licensed retail must maintain S$500,000 depending on their work.
Staff and Competency
The MAS states that every registered and Licensed AI FMCs must hire two well-experienced individuals residing in the country to work full-time in the company. These individuals must have at least five years of experience. The Licensed retail firms must hire three full-time individuals living in Singapore, and their CEO must have ten years or more experience.
These rules have raised the Fund Management sector in Singapore to International standards. All these rules give FMCs opportunities to improve their operation and governance, resulting in outstanding performances.