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MAS Tightens Rules For Fund Management Companies

The Monetary Authority of Singapore (MAS) recently started to implement an enhanced regulatory regime that requires Fund Management Companies (FMCs) to meet enhanced contract and capital requirements.

Amendments have been made to the Securities and Futures (Licensing and Conduct of Business) Regulations, Securities and Futures (Financial and Margin Requirements) Regulations, and Financial Advisers Regulations.

Some of the new rules include requiring independent custody and valuation of investor assets, as well as requirements for FMCs to undergo independent annual audits by external auditors and having an adequate risk management framework commensurate with the type and size of investments managed by the FMCs.

According to MAS, a new category of Registered Fund Management Companies (RFMC) will replace the current Exempt Fund Manager (EFM) regime. This will allow RFMCs to serve up to 30 qualified investors and manage up to S$250 million in assets.All other FMCs will have to apply for a license and must do so in six (6) months.

Also, to ensure the smooth transition for EFMs and FMCs to apply for a license or to register with MAS, MAS allowed FMCs to submit their licence applications or register online via the Corporate e-Lodgment system. This new online system will also allow FMCs to submit their regulatory returns.