The Monetary Authority of Singapore (MAS) has announced the repeal of the regulatory regime for Registered Fund Management Companies (RFMCs), effective 1 August 2024. This change marks a significant shift in the regulatory landscape for fund management in Singapore. Here, we provide an overview of the repeal's impact and the transitional arrangements for RFMCs.
Background
On 24 October 2023, MAS issued a consultation paper to gather feedback on the proposed transitional arrangements for RFMCs. The consultation closed on 31 December 2023, and MAS has since released a detailed response to the feedback received. The key focus areas included the transitional process for RFMCs to become licensed fund management companies (LFMCs) and the requirements for continuing fund management activities post-repeal.
Transitional Arrangements
Existing RFMCs wishing to continue operating must transition to becoming LFMCs that are restricted to serving accredited and institutional investors (“A/I LFMCs”). The process involves submitting a simplified application form, Form 1AR, between 1 April 2024 and 30 June 2024. MAS aims to issue the necessary Capital Markets Services (CMS) licenses by the end of July 2024.
During the transition period, RFMCs can continue their operations and must comply with existing regulatory requirements. Upon approval, the new regulatory requirements for A/I LFMCs will take immediate effect. These include prior approvals for changes at the fund management company and quarterly regulatory filings.
Specific Restrictions and Requirements
A notable aspect of the new regime is the imposition of a S$250 million assets under management (AUM) cap on RFMCs transitioning to A/I LFMCs. This cap serves as a safeguard until MAS assesses that the A/I LFMC is capable of handling a larger pool of assets. MAS will consider lifting the AUM cap based on factors such as regulatory compliance history, internal controls, and the stability of the management team.
Our Services
As the regulatory landscape evolves, we are prepared to assist RFMCs with their transition to becoming A/I LFMCs. Our services include statutory audits and quarterly regulatory reporting to ensure compliance with the new regime. We are committed to providing comprehensive support to help fund management companies navigate these changes smoothly.
For more detailed information on the repeal and transitional arrangements, please refer to the full MAS consultation paper and response document.