MAS targets to repeal the existing RFMC regime on 1 August 2024. Existing RFMCs intending to continue its fund management operations are required to apply to be an A/I LFMC.
What is RFMC?
Following the reshaping of global financial landscape, the demand for fund management services continues to grow as investors and institutions seek professional expertise to navigate complex and challenging financial markets. To ensure the fund management companies operate with integrity and transparency In Singapore, the Monetary Authority of Singapore (MAS) has introduced Registered Fund Management Company (RFMC) license in 2012 to provide a regulatory framework for smaller fund managers.
Some Key Features of RFMCs:
Eligibility: To qualify as an RFMC, a company must meet certain criteria, including:
- Managing assets below the threshold of S$250 million;
- Serving up to 30 accredited and institutional investors;
- Having adequate number of directors, relevant professionals and representatives with relevant experience and qualifications.
What are the Changes?
On 24 October 2023, MAS issued a consultation paper setting out their intention to repeal the regulatory regime for RFMCs and seeking feedbacks from the industry players on the proposed transitional arrangements. This aims to simplify the regulatory regime as RFMCs share several common characteristics with A/I LFMC and MAS observed growing pursuits among new entrants to apply for A/I LFMC instead of RFMC. In its response later in March 2024, MAS has indicated that it is targeting to repeal the existing RFMC regime on 1 August 2024. For existing RFMCs, they are required to submit their application to be an A/I LFMC in Form 1AR via https://go.gov.sg/Form1AR/ between 1 April 2024 and 30 June 2024. Timeline of significant events is as follows:
Upon receipt of approval from MAS to operate as an A/I LFMC, the fund management companies can continue their operations, and at the same time are required to familiarise themselves with the A/I LFMC regulatory requirements. Some of the useful resources for A/I LFMC:
- Guidelines on Licensing and Conduct of Business for Fund Management Companies [SFA 04-G05].
- Compliance Toolkit for Approvals, Notifications and Other Regulatory Submissions to MAS for Fund Managers.
- FAQs on Licensing of Fund Management Companies.
In addition, for those successful applicants which become A/I LFMCs, they are subject to an AUM Cap of S$250 million that serves as a safeguard during the transition period until MAS has assessed and is satisfied with the FMC’s risk management and control framework.
What are the Options Available for Those Entities Intending to Apply RFMC?
MAS has stopped accepting new RFMC applications since 1 January 2024. Hence, if you are looking to apply for a license with MAS to be a fund management company, there are a few categories of FMCs available (i.e. Retail LFMC, A/I LFMC and VCFM) depending on the type and number of investors proposed to serve and the expected total asset under management. Find out more about the admission criteria and licensing requirements here.
