The Monetary Authority of Singapore (MAS) has launched a public consultation on its proposal to streamline the regulatory framework for fund managers.
The existing Registered Fund Management Companies (RFMCs) regime, which was introduced in 2012 following the repeal of an earlier regime for Exempt Fund Managers (EFMs), will be repealed. Existing RFMCs that are still operating will be approved as Licensed Fund Management Companies (LFMCs) upon application.
During its time, EFMs had the option to apply to become either an RFMC or an 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, says MAS.
Since 2012, the central bank added that 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, it continued.
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During the transition process, existing RFMCs may continue their operations as usual. The MAS has also proposed a simpler process for RFMCs that wish to apply to become A/I LFMCs. During the process, MAS will retain the limit of $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 among other factors.
Furthermore, RFMCs that apply to become A/I LFMCs will not have to pay any application fees for the transition process.
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 here by Dec 31.
