Fund Management

    Do EAMs need a licence?

    The discretionary management of clients’ portfolios is considered “fund management”. It is regulated under the Securities and Futures Act (“SFA”) and carrying out this activity requires a capital markets services (“CMS”) license for fund management. Although multiple kinds of fund management licenses are available, two options stand out for EAMs and MFOs: The licensed fund management company restricted to servicing accredited and institutional investors (“A/I LFMC”) and The registered fund management company (“RFMC”). Both licenses restrict the EAM / MFO to servicing accredited and institutional investors. Accredited investors essentially being wealthy individuals (including individuals with net assets exceeding SGD 2m, net financial assets exceeding SGD 1m or an annual income of more than SGD 300,000) and entities (including corporations with net assets exceeding SGD 10m), the target client group of EAMs and MFOs. Institutional investors are essentially regulated financial institutions and government entities. In addition, an RFMC is restricted to a maximum of 30 clients and assets under management (“AUM”) of a maximum of SGD 250m.

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