MAS Proposed Framework for Single Family Offices

      The Monetary Authority of Singapore (MAS) has proposed a new exemption framework for single family offices (SFOs) operating in Singapore. The framework introduces qualifying criteria to exempt SFOs from fund management licensing requirements. These criteria aim to subject SFOs to anti-money laundering checks by MAS-regulated financial institutions and corporate beneficial ownership reporting. MAS's move responds to the increasing prominence of SFOs, intending to curb potential money laundering risks associated with their growth.

      Proposed SFO Qualification Requirements 

      Under the proposed framework, SFOs must meet specific conditions to qualify for the exemption, including being a Singapore-incorporated company wholly owned by a single family. The SFO’s fund management business must cater exclusively to family members, closely related corporations, express trusts, or charities funded solely by these entities. The SFO must maintain business relations with an MAS-regulated financial institution and have a resident employee as a point of contact with MAS.

      Notably, MAS emphasises that it won’t grant case-by-case exemptions to SFOs failing to meet the specified criteria. The proposed framework also mandates reporting requirements, necessitating new SFOs to submit commencement notifications and annual returns to MAS, disclosing their assets and financial relationships.

      For existing SFOs, a six-month transitional period is proposed to align with the exemption framework. During this period, existing SFOs must submit a commencement notification, and their previously relied-upon licensing exemptions will be withdrawn once the notification is filed or at the end of the six-month period.

      In cases where SFOs have applied for tax incentives under specific sections of the Income Tax Act 1947, they will need a new legal opinion confirming their eligibility for the proposed class exemption criteria.

      SFO requirements consultation paper deadline

      The consultation paper seeks feedback from stakeholders until September 30, 2023, with MAS’s measures aimed at safeguarding against money laundering risks presented by the growing influence of SFOs in Singapore’s financial landscape.

      If you would like more information on this paper, please reach out to our APAC compliance solutions team today. To read the consultation paper in full, please click here.

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