Important Update on Transition to A/I LFMC Status by 1 August 2024

Background 

On 24 October 2023, the Monetary Authority of Singapore (‘MAS’) issued a consultation paper to seek feedback on the proposed transitional arrangements for existing Registered Fund Management Companies (“RFMCs”) that intend to continue operating fund management businesses following the repeal of the regulatory regime for RFMCs. This comes as a part of continual enhancements to the regulatory regime for fund management companies (“FMCs”) in Singapore. 

Following the consultation, MAS is set to repeal the RFMC regime and RFMCs can opt to: 

• upgrade to Accredited Investor – Licensed Fund Management Companies (“A/I LFMCs”) status, or  
• pivot to Venture Capital Fund Management Company (VCFM), or  
• cease their fund management business altogether. 

Repeal and Upgrading Timetable 

The MAS is repealing the RFMC regulatory regime on August 1, 2024.  

To continue operating after this date, RFMCs must apply for an A/I LFMC license between April 1 and June 30, 2024.  

Successful applicants will receive CMS licenses by the end of July 2024. 

Key Considerations for upgrading RFMCs 

• Application Deadline: Applications are open for a limited period only till 30 June 2024 
• AUM Cap: Transitioning A-I LFMCs will initially face a S$250 million managed asset limit cap (AUM Cap). This can be lifted by MAS based on the RFMC’s compliance record and business model. 
• A/I LFMC regulatory requirements: RFMCs must familiarise themselves with A/I LFMC regulatory requirements by 1 August 2024 

Engaging Professionally Accredited advisory companies –  

MAS encourages FMCs to engage with outsourcing firms which are members of professionally accredited firms. This means public accounting and law groups which have the expertise to assist in regulatory risk and compliance matters. Most importantly, being professionally accredited and regulated by their industry regulators such as ACRA and/or the Law Society, these firms maintain high standards of professional competency, cybersecurity, capitalisation and more – which represent the essential institutional infrastructure to augment the risk & compliance operations of good financial institutions.  

How We Can Help 

Capital Governance is here to simplify what could be a critical and complex transition for RFMCs intending to upgrade to A/I LFMC or pivot to VCFM. We offer a comprehensive suite of services to ensure a smooth transition, including: 

• Application Guidance: Guidance through the application process, ensuring all requirements are met and your application is complete. 
• Regulatory Compliance Review: Assess your current operations against the new A/I LFMC regulations, identifying any gaps and advisory on solutions. 
• Internal Controls Optimization: Help strengthen your internal control frameworks to meet MAS’s expectations and pave the way for lifting the AUM Cap. 

RFMC CEO Briefing by CAPITAL GOVERNANCE 

We are pleased to invite all major RFMCs which are progressing to A/I LFMC status to join us for a RFMC CEO Briefing, in which we will share our guidance on the transition from RFMC to AILFMC operations, drawing upon our extensive experience in advising the fund management industry and capital markets intermediaries. Find out more HERE! 

Contact CG today to schedule a consultation and discuss your specific RFMC transition needs. Let us assist you with a successful transition so that you can progress to the next chapter in your fund management business with confidence.