MAS Issues Revised Guidelines on Licensing, Registration and Conduct of Business for Fund Management Companies

      In November, MAS updated its guidelines on the licensing, registration and conduct of business for Fund Management Companies (FMCs).

      The updates outline MAS’ requirements that are designed to ensure FMCs have robust governance in place via the stability of their Board and senior management team. You can read the revised guidelines on the MAS website.

      The guidelines provide the framework for MAS eligibility and application procedures for licensed FMCs, Venture Capital Fund Managers (VCFMs) and Registered Fund Management Companies (RFMCs).

      When applying as a fund manager for registration or licensing to MAS, it is important to factor in these guidelines at each stage of the process including the application, preparation of a business plan and collating of supporting documents, to ensure consistency across each.

      These revised guidelines set out the ongoing business conduct requirements for LFMCs, VCFMs and RFMCs, including requirements relating to custody, valuation and reporting, conflicts of interest mitigation, disclosure, and submission of periodic returns.

      Summary of New Requirements for LFMCs, VCFMs, and RFMCs

      A summary of the new requirements, covering the anchoring of key individuals, is set out below:

      • Where the FMC is not part of an established business group and is owned by one or more individual shareholders (whether directly or through holding companies), the FMC’s CEO and Executive Directors are expected to collectively hold and maintain a controlling stake (>50% effective voting interest) in the FMC.
      • The CEO and Executive Directors must be able to exercise effective control over the FMC’s operations, for which they are held accountable under the Securities and Futures Act.
      • The CEO and Executive Directors should not enter into any arrangement that would allow other persons to control how the CEO or the Executive Directors exercise their voting rights in respect of the FMC.
      • MAS may also consider other measures to anchor and align the interests of the CEO and Executive Directors with third-party investors, such as meaningful investments of seed capital by these individuals, alongside third-party investors in pooled funds.
      • Established business group includes financial services groups where one or more group entities are regulated by a financial market regulatory, whether in Singapore or in other jurisdictions.
      • FMC is considered part of a group if it is a subsidiary or associate company of the group or is owned by common individual shareholders.

      How Waystone Compliance Solutions Can Help

      Waystone Compliance Solutions has an expert team, experienced in obtaining licenses for LFMCs, VCFMs and RFMCs in Singapore. We offer advice on setting up fund management companies as well as the structure required in order to fulfill MAS prerequisites before submitting an application to MAS.

      We provide support from the initial application to ongoing compliance post-approval, including internal audit as required.  Please reach out to us for an initial discussion or to find out more about the services we offer.

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