Master the Art of Fund Management Licensing in Singapore
Do you want to start a fund management company?
Is it a RFMC, VCFM, or LFMC?
Are you confused by the different acronyms?
This article aims to decipher such acronyms to help you better understand the different types of fund management companies in Singapore and also the fund management licensing rules in Singapore.
Fund management is a regulated activity as set out in the Securities and Futures Act (SFA).
Fund managers must be registered or regulated to manage third-party investors’ money in collective investment schemes or securities, including equities, fixed income, and financial derivatives.
There are different types of fund management companies – the category in which they fall would depend on the expected assets under management (AUM) and the type of clients they serve.
Category | Registration/Licensing | Target Clientele/ Expected AUM |
RFMC ● Registered Fund Management Company | Registered Fund Management Company Notification | - Restricted to 30 accredited & institutional investors. - Restricted to S$250 million AUM. |
VCFM ● Venture Capital Fund Manager | CMS Licence (Venture Capital Fund Manager) | - Restricted to only accredited and institutional investors. - Manages venture capital funds only. |
A/I LFMC ● Accredited / Instituitional Licensed Fund Management Company | CMS Licence (Fund Management) | - Restricted to only accredited and institutional investors. - No restriction on AUM. |
Retail LFMC | CMS License (Fund Management) | - No restriction on the type/number of investors. - No restriction on AUM. |
The financial and staffing requirements of each category of the fund management company are set out in the table below.
Category | Financial Requirements | Staffing Requirements |
RFMC ● Registered Fund Management Company | Base capital of S$250,000 | 2 full-time Singapore-based employees, each with at least 5 years of relevant experience. |
VCFM ● Venture Capital Fund Manager | None | 2 full-time Singapore-based employees. |
A/I LFMC ● Accredited / Instituitional Licensed Fund Management Company | Base capital of S$250,000 Required to maintain financial resources which are more than its total risk requirements | 2 full-time Singapore-based employees, each with at least 5 years of relevant experience. An Independent and dedicated compliance function in Singapore is required if AUM is at least S$1 billion. |
Retail LFMC | Base capital of S$500,000 or higher Required to maintain financial resources which are more than its total risk requirements | 3 full-time Singapore-based employees, each with at least 5 years of relevant experience. CEO must have at least 10 years of relevant experience. An Independent and dedicated compliance function in Singapore is required. |
The business model will determine how quickly MAS assesses, processes, and approves applications.
It should take 4 months in simple circumstances where the applicant satisfies all requirements, and the presented paperwork is in order.
With our help, setting up your fund management company will be a breeze. We’ll walk you through the process and answer any questions. Contact us via Lawyer Anywhere.
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