FAQs on Licensing and Business Conduct (Other than for Fund Management Companies)

The Monetary Authority of Singapore, MAS, has published updated frequently asked questions (FAQs) on the licensing and business conduct of financial market participants other than fund management companies. The FAQs provide guidance to numerous market participants, including venture capital funds, investment trusts, exempt OTC derivatives brokers, and certain (other) Capital Market Service (CMS) license holders with respect to the scope of a CMS license, the applicable business conduct rules, and the appointment of representatives, to name a few. In this latest version, MAS has updated the following FAQ – as quoted:
Q22B: What are the procedures if my company wishes to establish a subsidiary or branch?
A22B: A CMS licence holder is required to seek MAS’ approval before establishing a subsidiary or branch. In general, MAS will not approve such set-ups, unless there are exceptional reasons. This is because the operations of such entities could have a significant impact on the CMS licence holder and MAS’ oversight does not extend to their operations. Any such subsidiary or branch should be established to primarily support the business of the CMS licence holder. The CMS licence holder must also, among others, demonstrate its ability to effectively oversee and take responsibility for the subsidiary’s or branch’s activities.