MAS tightens regulatory leash on fund managers

Business conduct and capital requirements raised for all fund management companies.

Under the enhanced regulatory regime, which take effect 7 August 2012, fund management companies (FMCs) will have to abide by more stringent rules requiring independent custody and valuation of investor assets, according to the Monetary Authority of Singapore (MAS) in a release.

FMCs will also have to follow requirements to undergo independent annual audits by external auditors and having an adequate risk management framework commensurate with the type and size of investments managed by the FMCs.

"A new category of Registered Fund Management Companies (RFMC) will replace the current Exempt Fund Manager (EFM) regime. RFMCs may serve up to 30 Qualified Investors and manage up to S$250 million in assets under management. All other FMCs will have to apply for a license," added MAS.

MAS added that to facilitate a smooth transition for EFMs and FMCs to apply for a license or to
register with MAS, several measures have been put in place.

For example, current EFMs will have six months to apply for a licence or to register with MAS under the new RFMC regime. Also, MCs can submit their licence applications or register online via the Corporate e-Lodgment system. This new online system will also allow FMCs to submit their regulatory returns. And FMCs can refer to a set of Guidelines and FAQs for a better understanding of the requirements relating to application criteria and business conduct.