MAS Consults on Streamlined Regulatory Framework for Fund Managers

The Monetary Authority of Singapore (MAS) has launched a public consultation on a proposed revocation of its registered fund management company (RFMC) regime and corresponding (new) requirements for currently registered FMCs to become licensed fund management companies (LFMCs). This move comes as a response to the growing business in the investment fund industry and most RFMCs applying for a LFMC license in the course of their business operations anyway.
The two regimes currently primarily differ in the scope of the business a company may undertake (RFMCs are limited to S$250 million of assets under management (AuM)), reporting and notification requirements of FMCs, and the application and annual licensing fees. The following table depicts these differences:
Table 1: Differences in the Requirements of LFMCs and RFMCs

MAS now proposes to eliminate entirely the RFMC regime, thereby aligning all requirements of registered fund management companies with those of licensed fund management companies. Current RFMCs would thereby „move over“ to the LFMC regime pursuant to the following process:
– During the transition period, for which no deadline is proposed yet, current registered fund management companies may continue to operate „as usual“.
– During a prescribed application window, they must apply for a capital markets services (CMS) licence for LFMCs for which they will NOT have to pay any application fees. RFMCs will also have to notify their representative, for which, too, there will be no fee.
– In the application form to get a CMS license for LFMCs, which is a one time form outlined in Annex 1 of the consultation, currently registered fund management companies must provide information on their assets under management and confirm their ability to adhere to all regulatory requirements applicable for licensed fund management companies.
– Following an application, MAS will respond within one month. For MAS to approve an application to become a licensed fund management company, it will require that
– firms demonstrate their ability to comply with all LFMCs obligations AND
– firms have carried out fund management activities in the six months prior to their application.
– If approved, RFMCs will subsequently be licensed fund management companies. In this context, it is important to note that the annual licensing fee will be aligned with the one of current LFMCs. That means that „moved“ RFMCs must pay an annual fee of S$4,000 plus a S$200 fee for each representative any time following the transition.
Also, MAS proposes to maintain the limit of S$250 million of assets under management for registered fund management companies transitioning to the LFMC regime. Following the transition, they may request an increase in their AuM limit from MAS, if they intend to expand their business scope.
MAS also outlines how current RFMCs are expected to go about changes in particular notifications during the transition period and how they should comply with their annual reporting requirements if the reports are due during the transition period.
Finally, to ease transition to the new regime, MAS proposes to no longer accept applications for the „old“ RFMC regime beginning January 1, 2024.