MAS proposes new corporate structure for investment funds

The aim is to offer asset managers greater flexibility and lower costs.

The Monetary Authority of Singapore (MAS) has commenced a public consultation on a new corporate structure for investment funds called the Singapore Variable Capital Company (S-VACC).

To recall, there are currently three types of structures used by investment funds in Singapore – unit trusts, companies formed under the Companies Act, and limited partnerships. MAS said the S-VACC seeks to complement these existing structures with one that is tailored for investment funds.

"With the S-VACC framework, MAS seeks to offer a flexible and efficient platform for fund managers to co-locate fund domiciliation with their substantive fund management activities in Singapore and further deepen the asset servicing ecosystem," noted MAS.

The proposed S-VACC framework is intended to cater to both open-ended and closed-end investment funds, and allow for segregation of assets and liabilities of sub-funds within an umbrella structure. According to MAS, this will allow asset managers to achieve cost efficiencies by consolidating administrative functions at the umbrella fund level.

The S-VACC is proposed to be limited to investment fund purposes only, and would be required to have a fund manager which is regulated by MAS.