Compliance & Regulation

Enhanced Singapore funds regime draws near

GPs operating in Singapore may welcome the credibility that will be provided by an updated funds regime, but have just six months to prepare for its implementation.

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The Monetary Authority of Singapore (MAS) has set a 6 February deadline for GPs to comply with the country's enhanced regulatory funds regime.

The “Registered Fund Management Company” framework will capture Singapore-based GPs with more than S$250 million (€161 million; $200 million) assets under management (AUM). Covered GPs will need to obtain a Capital Markets Services (CMS) license with Singapore authorities while those below the AUM threshold will need to file a Form 22A for an exemption.

You can say more convincingly to investors that you are operating in a regulated environment

In the past the MAS had a light touch approach and most fund managers where exempt from gaining a license under the ‘Exempt Fund Manager’ regime. 

“I think broadly the industry will be pleased. It does mean you can say more convincingly to investors that you are operating in a regulated environment,” Philippa Allen, founder of Compliance Asia, told PE Manager.

“The MAS are also a good regulator to deal with so I can’t see a downside once you have got over the initial hurdle of getting everyone registered. But it certainly will be a big change for must fund managers,” she added.

A CMS license will only be awarded to GPs who maintain base capital of at least S$250,000 and who have two representatives living in Singapore, one of which must be designated a chief executive. GPs' have however been exempted from the regime's custodian requirement.The custodian regime requires all assets under management to be subject to independent custody.  Independent custodians could be depositories and banks that are suitably licensed, registered or authorised.

Singapore regulators are also considering qualitative regulations and will require GPs to outline a risk management process and submit to annual auditing. Previously unregulated GPS would only file an annual report claiming their exemption.