MAS Compliance Toolkit for Licensed Fund Management Companies (LFMC)

MAS Compliance Toolkit for Licensed Fund Management Companies (LFMC)

According to the Monetary Authority of Singapore (MAS) compliance policy, Licensed Fund Management Companies in Singapore have some obligations. They are required to apply for MAS approval using certain forms. Submitting a set of notifications to MAS is yet another requirement. Equally important, submitting respective regulatory submissions is mandatory. This article discusses how LMFCs should achieve all that accordingly.

Applications for approval

There are various approvals that a (Licensed Fund Management Companies) LFMC may be looking for from MAS.

1. CMS License

For a CMS license, the company needs to submit Form 1A. This form is a request to operate as a (Licensed Fund Management Companies) LFMC. If your company is a Registered Fund Management Company (RFMC), but you expect the Assets under Management (AUM) to be above S$250 million, you should also submit Form 1A. It also applies if the qualified investors are expected to go above 30. The application should be made before the company starts operating as a (Licensed Fund Management Companies) LFMC. The mode of submission is CeL.

2. Addition of another activity regulated by SFA

The company should submit Form 5 before adding the new activity. This application’s submission is via email.

3. Appointment of Director or Chief Executive Officer (CEO)

Under such circumstances, Form 11 should be submitted before the appointment via CeL. It is also applicable if there is a change in director appointments. If it changes from non-executive to executive, this application for approval is essential.

4. To obtain Effective Control of an (Licensed Fund Management Companies) LFMC

This process is guided by Section 97A (2) of the SFA. Before obtaining it, the LMFC must submit the Application for Approval to obtain Effective Control of the Holder of a CMS license via email.

5. Foreign company

If a foreign company wants to start a business under any of the regulations, it must seek MAS approval via email. It should submit the Application for Approval of Arrangements

6. Other approvals

The following approvals have no prescribed forms. However, companies must submit the intent of seeking MAS approval before they happen via email

• If ceasing or commencing a business related to any regulatory activity or the business scope
• Reduction of share capital such as the non-cumulative preference, paid-up irredeemable, and paid-up ordinary
• Disclosure of inspection report or investigation report to someone else other than the (Licensed Fund Management Companies) LFMC auditor. In this case, the reports are only those from a foreign regulatory authority or MAS.
• An approval is also vital when acquiring or holding over 20% of the company’s share capital either directly or indirectly. Another instance that demands approval is when establishing a new branch, whether within or outside Singapore.

Notifications Submissions by (Licensed Fund Management Companies) LMFC to MAS

It is the responsibility of LMFC to notify MAS in case of the following instances

• If it no longer does business in certain regulated activities or hasn’t started a business with a new one six months after its addition. Fill the Form 7 and submit it via email. Do it not later than 14 days after the cessation.
• Submit Form 10 via email if the business name or location changes. Do it within 14 days after the change.
• Notification of matters adversely affecting its finances to a great extent. No prescribed form for this, but it should be done immediately via email.
• Other immediate notifications via email include notifying MAS that the company or staff has defying laid-out guidelines, including an offense, code of conduct, or different business rules. If shareholders or members change to the extent
• In the event that there is an agreement of any business combination, including a merger, sale, or purchase, MAS should be notified seven days before its execution via email.
• If a CEO or director resigns, notify MAS within 15 days following the resignation via email. It also applies if the nature of the director’s appointment changes from executive to non-executive of either the CEO or director changes the country of residence. Again, the notification is necessary of the director of CEO shareholdings or business interests’ changes.

Regulatory Submissions by (Licensed Fund Management Companies) LMFC to MAS

An LMFC is required to submit the following

• Submit quarterly financial returns not later than the 14^th day after the end of that quarter. It requires submission of Form 1 and Forms 2 via MASNET.
• Submission of an annual audit report and financial returns. It should be done within the first five months since the end of the referenced financial year. The forms submitted are Form 1, Form 2, Form 3, Form 4, Form 5, Form 6, and the auditor’s report. The first four are submitted via MASNET, whereas the other three are submitted via ttps://go.go v.sg/ link
• Reporting misconduct as soon as it happens to MAS is yet another requirement. A need to do so may arise in dishonesty, fraud, or breach of conduct, among other compliance regulations. Submit the report on the misconduct of the representative via MASNET.
• If there was no instance of misconduct, submit the Declaration of Nil Return of Misconduct of Representative within 14 days of the new financial year via MASNET.