Navigating the regulatory landscape is crucial for fund managers looking to operate in Singapore. The Monetary Authority of Singapore (MAS) has set forth stringent guidelines to ensure that fund management activities are conducted with the highest levels of integrity and professionalism. This article aims to provide a comprehensive overview of when licensing or registration is required for fund managers in Singapore, helping you make informed decisions about your fund management operations. Additionally, we will introduce how Auptimate’s Fund Admin services can simplify compliance and operational processes.
Essential Licensing Guidelines for Fund Managers Operating in Singapore
Fund managers in Singapore are subject to the Securities and Futures Act 2001 (SFA) and its subsidiary legislation, which includes regulations, notices, guidelines, and circulars issued under the SFA. The MAS is the regulatory authority responsible for overseeing fund management activities in Singapore.
To determine if a fund manager is licensed or registered by MAS, you can refer to the MAS Financial Institutions Directory, which provides an exhaustive list of financial institutions licensed or regulated by MAS and the regulated activities they are authorised to provide.
When Is Licensing or Registration Required?
A company needs to be licensed or registered for fund management if it raises and manages monies for third-party investors in collective investment schemes or segregated accounts that invest in capital markets products, such as equities, fixed income assets, and financial derivatives. Depending on the size of the company’s expected assets under management (AUM), target clientele, and investment strategy, it can operate under one of the following categories:
1. Capital Markets Services (CMS) Licence Holder for Fund Management (LFMC)
An LFMC has no restrictions on the number of investors or AUM and can be further categorised into:
- Retail LFMC: This category allows fund managers to carry on business in fund management with all types of investors, including retail investors.
- Accredited/Institutional LFMC (A/I LFMC): This category is restricted to carrying on business in fund management with accredited and institutional investors only.
2. Venture Capital Fund Manager (VCFM)
A VCFM manages venture capital funds exclusively, which typically invest in start-ups. These funds must meet specific eligibility criteria, such as being primarily invested in start-ups. VCFMs are restricted to serving only accredited and institutional investors.
Licensing Exemptions
Certain types of fund managers may be eligible for an exemption from licensing or registration under specific conditions. Examples of such exemptions include:
- Related Corporations or Family Members: Managing assets for related corporations or family members.
- Immovable Assets: Managing a pool of immovable assets for accredited and institutional investors.
- Non-Capital Markets Product Assets: Managing a pool of non-capital markets product assets for accredited and institutional investors.
These exemptions are outlined under section 99 of the SFA and paragraph 5 of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations.
Business Conduct Requirements
Fund managers in Singapore are required to implement business conduct policies, procedures, and controls that are commensurate with the nature, scale, and complexity of their business. Key conduct requirements include:
- Segregation of Customer Monies and Assets: Ensuring that customers’ monies and assets are kept separate from the fund manager’s assets.
- Independent Valuation: Conducting independent valuations of assets under management.
- Conflict of Interest Mitigation: Implementing measures to mitigate conflicts of interest.
- Anti-Money Laundering (AML) and Countering Terrorism Financing (CTF): Complying with MAS requirements on AML and CTF.
For detailed guidelines, please refer to MAS Government Website on Fund Managers.
How Auptimate’s Fund Admin Services Can Help
Navigating the regulatory requirements and maintaining compliance can be overwhelming. Auptimate’s Fund Admin services are designed to simplify these processes, allowing you to focus on your core investment activities. Our services include:
- Regulatory Filings: We handle all necessary regulatory filings and lodgements with MAS, ensuring full compliance with local regulations.
- Investor Management: Our platform streamlines investor communications, allowing you to send reminders, track progress, and manage documents electronically.
- Document Vault: Securely share and manage documents with investors through our centralised document management system.
Understanding when licensing or registration is required for fund managers in Singapore is essential for ensuring compliance and operational efficiency. By staying informed about the regulatory framework and leveraging Auptimate’s Fund Admin services, you can navigate the complexities of fund management with confidence.
Ready to streamline your fund management operations? Book a Call Now to learn more about how Auptimate can support your compliance and administrative needs. Make your fund management processes more efficient and compliant with Auptimate today.
