CFC 03/2022 Guidance on requirements that are applicable to Exchange Traded Funds participating in the SZSE-SGX and SSE-SGX ETF Links

The Monetary Authority of Singapore (MAS) has published a revised version of its Circular No. CFC 03/2022 which sets out guidance in relation to feeder exchange traded funds (feeder ETFs) that are listed on the Singapore Stock Exchange (SSE) and „feed“ into a master exchange traded fund listed on the Shenzhen Stock Exchange (SZSE), following the signing of a Memorandum of Understanding (MoU) two years ago to enable such arrangements via a corresponding ETF Link.
The circular briefly outlines
– the disclosure and authorization requirements of such feeder funds under the Code on Collective Investment Schemes;
– the general eligibility criteria for investing capital in master funds (on part of the master fund) – the master fund’s home jurisdiction must have rules and regulations that are similar to those in Singapore for purposes of fund (manger) supervision; and
– the conditions that an SSE or SZSE listed master fund must meet for an ETF feeder fund to be authorized in Singapore which range from track record and competency requirements of the master fund manager, to a minimum asset size of the master fund, to certain restrictions pertaining to security lending.
The revisions made to the circular are minor in nature and only include the addition of a new footnote to reference the above noted MoU and the addition of conditions that SSE listed master funds must meet for an ETF feeder fund to be authorized in Singapore (previously, it said SZSE listed master fund only).