Singapore to End Registered Fund Management Companies and Transit to Licensed Fund Management Companies with S$250 Million Limit Removed as Business Models, Risk Profiles & Demand from RFMCs to Upgrade to LFMCs, RFMC Introduced in 2012 after Ending Exempt Fund Managers
26th October 2023 | Hong Kong
Singapore has launched a consultation paper (end 31/12/23) to end Registered Fund Management Companies (RFMCs) and transit to Licensed Fund Management Companies (LFMCs) with S$250 million limit removed (managed assets) as business models, risk profiles & demand from RFMCs to upgrade to LFMCs. The RFMC was first introduced in 2012 after ending the previous Exempt Fund Managers regime. Singapore MAS on existing RFMCs: “Existing RFMCs can continue operating as usual during the transition process. MAS proposes a simplified process for RFMCs that wish to apply to become A/I LFMCs. 1) RFMCs will need to submit a form during a prescribed application window, setting out their assets under management and confirming their ability to comply with the regulatory requirements for A/I LFMCs. MAS will respond to all applications from RFMCs within a month. 2) MAS will retain the limit of S$250 million on the managed assets of RFMCs that transition to become A/I LFMCs. After the transition, they can apply to MAS to uplift the limit on managed assets, if they have plans to grow their managed assets. 3) RFMCs that apply to become A/I LFMCs will not have to pay any application fees for transition to become A/I LFMCs.” More info below:
“ Singapore to End Registered Fund Management Companies and Transit to Licensed Fund Management Companies with S$250 Million Limit Removed as Business Models, Risk Profiles & Demand from RFMCs to Upgrade to LFMCs, RFMC Introduced in 2012 after Ending Exempt Fund Managers “
Singapore to End Registered Fund Management Companies and Transit to Licensed Fund Management Companies with S$250 Million Limit Removed
24th October 2023 – The Monetary Authority of Singapore (MAS) today launched a public consultation on its proposal to streamline the regulatory framework for fund managers. Specifically, the existing Registered Fund Management Companies (RFMCs) regime will be repealed, and existing RFMCs that are in operation will be approved as Licensed Fund Management Companies (LFMCs) upon application.
The RFMC regime was introduced in 2012, following the repeal of an earlier regime for Exempt Fund Managers [1] (EFMs) to facilitate the transition of EFMs into a fully regulated regime. EFMs in existence at that time had the option to apply to become either an RFMC or a LFMC. RFMCs have similar admission criteria and business conduct requirements as LFMCs that serve only accredited or institutional investors (A/I LFMCs). However, RFMCs are subject to lighter requirements in terms of the frequency and granularity of regulatory reporting, given the limits placed on their assets under management and number of customers. Since 2012, the business models and risk profiles of RFMCs and A/I LFMCs have increasingly converged, making the regulatory distinction between the two less meaningful. Many RFMCs have also upgraded to become A/I LFMCs as their businesses grew, and most new entrants seeking to conduct fund management in Singapore tend to apply to be A/I LFMCs rather than RFMCs.
Transitional arrangements for existing RFMCs
Existing RFMCs can continue operating as usual during the transition process. MAS proposes a simplified process for RFMCs that wish to apply to become A/I LFMCs.
- a. RFMCs will need to submit a form during a prescribed application window, setting out their assets under management and confirming their ability to comply with the regulatory requirements for A/I LFMCs. MAS will respond to all applications from RFMCs within a month.
- b. MAS will retain the limit of S$250 million on the managed assets of RFMCs that transition to become A/I LFMCs. After the transition, they can apply to MAS to uplift the limit on managed assets, if they have plans to grow their managed assets.
- c. RFMCs that apply to become A/I LFMCs will not have to pay any application fees for transition to become A/I LFMCs.
Prior to the repeal, MAS will conduct a briefing for RFMCs to address any uncertainty over the transitional arrangements.
Interested parties are invited to submit their comments to the consultation here by 31 December 2023.
Notes
[1] Exempt Fund Managers (EFMs) were exempt from licensing and business conduct requirements. The EFM regime was repealed to enhance MAS’ regulatory oversight of fund management companies and raise the standard of conduct across the fund management industry. In view of the diversity of EFMs, the RFMC regime was calibrated to facilitate the transition of EFMs into a fully regulated regime.
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