How to start the LFMC (Licensed Fund Management Company)?

How to start the LFMC (Licensed Fund Management Company)?

To practice as a Licensed fund management company (LFMC) under the Securities and Futures Act (SFA), your business must be registered with the MAS or possess a capital markets services (CMS) license. Representatives are expected to conduct key roles in a fund management firm, such as portfolio creation and allocation, evaluation and advisory, company growth and promotion, and client servicing.

If your corporation wants to nominate representatives to perform supervised operations on your behalf, it must contact MAS. An appointed, interim, or temporary representative may be anybody provided they meet the set-out criteria. An appointed representative is an organization employee or agent who performs supervised actions on behalf of the business.

A provisional representative is an established person who is moving to Singapore from another country and has been granted a three-month grace period to complete the required examinations. A temporary representative could be an employee of a similar business based in another country who is assigned to carry out the controlled operation on your behalf for a short time.

When deciding whether or not to become an (Licensed Fund Management Company) LFMC, MAS examines considerations such as:

• Propriety and fitness of its directors, shareholders, and applicant.
• The applicant’s as well as its parent company’s or main shareholders’ track records and investment management skills.
• Having the ability to fulfill the SFA’s minimum financial standards. Internal risk control and compliance systems are solid.
• The business model, strategies, and estimates, as well as the risks that come with them.
• Furthermore, the business will need a dedicated and safe office space that is only available by your company’s directors and employees.

Here are some of the key applicable Staffing and Financial requirements:

Minimum base capital

When it comes to the financial requirements, the least minimum capital is $500,000 and above. This is unlike a Licensed fund management company (LFMC) with a minimum base capital of $250,000 and a venture capital fund manager (VCFM) that does not require any. (Licensed Fund Management Company) LFMC must keep financial capital in excess of the overall risk requirements.

Staffing Requirements

Three full-time Singapore-centered employees with at least five years of related experience are needed. The proposed chief executive officer (CEO) must have a minimum of ten years of experience in the sector. In Singapore, an independent and committed compliance role is expected.

Annual Corporate Fee

There will be annual payments for representatives who have been appointed by the (Licensed Fund Management Company) LFMC in addition to the yearly corporate charge for registration or license status. A fixed fee of $4,000 is charged. From 101st representative onwards, a variable charge of $5 per representative is fixed as of January 1st of the calendar year.

If the business model is clear, the applicant completely satisfies the applicable admission requirements. This application is complete and transparent. MAS aims to evaluate and process the application in less than four months. MAS would require additional time to analyze the submission in more difficult situations, including in cases when the evidence is judged to be insufficient or unreliable. Please double-check that your company’s application is full, accurate, and includes the necessary supporting documentation.