Repeal of the Regulatory Regime for Registered Fund Management Companies: The Confirmed Plans

Ingenia consultants
April 02, 2024


On 28 March 2024, the Monetary Authority of Singapore (“MAS”) published their Response to Consultation on Repeal of Regulatory Regime for Registered Fund Management Companies. In this response, the MAS lays out the confirmed plans and timeline for the transition of registered fund management companies (“RFMCs”) to become licenced fund management companies restricted to serving qualified investors, namely accredited investors and institutional investors (“A/I LFMCs”).


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Diagram 1 – Timeline of events leading up to repeal of RFMC regime (para. 2.7 Repeal of Regulatory Regime for Registered Fund Management Companies, Response to Feedback Received) 

The MAS targets to repeal the RFMC regime on 1 August 2024. Existing RFMCs that want to continue carrying out regulated fund management activity after this date must apply to be an A/I LFMC by completing and submitting an application through Form 1AR between 1 April 2024 and 30 June 2024.

Starting 1 April 2024, an existing RFMC can apply for their transition to an A/I LFMC by submitting Form 1AR to the MAS.

At the latest, an existing RFMC must submit its application to be licenced as an A/I LFMC under the transition on 30 June 2024.

Any RFMC that does not submit its application in Form 1AR will have to cease carrying out the regulated activity of fund management by 31 July 2024. (Operating under other exemptions will still be permitted.) It should ensure an orderly winding down of its business ofregulated fund management.

The MAS will inform the RFC of the outcome of their Form 1AR application within one month of submission.
The MAS is planning to issue the A/I LFMC licences to successful applicants during July 2024. Please note that the company remains an RFMC and subject to the respective regulations until it has received the licence as A/I LMFC. However, it must comply with all regulatory requirements for an A/I LFMC immediately upon receiving the licence. Accordingly, RFMCs are recommended to familiarise themselves with the requirements applicable to A/I LFMCs already.

During the application process, RFMCs can continueoperating without disruption under the requirements applicable to RFMCs (e.g., the filing of notifications and the annual declarations, namely Form 25B).

Once the RFMC has received its licence as A/I LFMC, it must immediately comply with all requirements for an A/I LFMC, including (but not limited to) applications for changes in representatives, directors and the CEO, and quarterly submissions. However, it may be noted that RFMCs that convert to A/I LFMCs will not need to submit quarterly returns for the quarter ending 30 June 2024. Because the MAS will only issue the licences in July. Consequently, the RFMCdid not hold the licence on or before 30 June 2024, whichwould trigger the submission requirement for 2Q2024. Therefore, RFMCs converting to A/I LFMCs under the Form 1AR process will need to submit their first quarterly returns for the quarter ending 30 September 2024 by 14 October 2024.

Finally, the MAS highlights that RFMCs with regulatory issues will be required to complete their remediation after they obtain the licence as A/I LFMC.

Requirements for Licencing under the Transition Process

To apply for licencing as an A/I LFMC under the Form 1AR transition process, an existing RFMC must submit Form 1AR. In Form 1AR, the RFMC is only required to submit information on its assets under management as per its latest available information (e.g., management accounts or audited financial statements of funds) and the number and class of its customers. No supporting documents are required at the point of submitting Form 1AR. Nevertheless, the RFMC must be prepared to provide documentation in support of thedeclarations made in Form 1AR if requested by MAS.

The MAS will approve an RFMC’s application if it has managed assets attributable to third-party investors in the six months immediately preceding the submission of Form 1AR to the MAS. If the RFMC is registered for six months or less as of the submission date, it does not need to meet this requirement (but its licence will cede if it does not start carrying out the regulated activity within six months after it was authorised as an RFMC).

Representatives of the RFMC will need to meet the minimum requirements under the Notice on Competency Requirements for Representatives of Holders of Capital Markets Services Licence and Exempt Financial Institutions (SFA04-N22).Hereby, it may be noted that representatives that serve only accredited and institutional investors (to which an A/I LFMC is restricted) are exempt from passing any modules for fund management of the Capital Markets and Financial Advisory Services Examination (“CMFAS Exam”) (para. 5.10.1 SFA04-N22).

Representatives of the RFMC (that are currently exempt from registration in the MAS Register of Representatives) will automatically become appointed representatives on the same date that the RFMC is licenced as an A/I LFMC. The MAS will publish the names of appointed representatives on the MAS Register of Representatives based on the latest information provided by RFMC in its Form 23A notifications to the MAS. Hence, it is important that the RFMC ensures that the information it has provided to the MAS on its representatives is up to date.

Unsuccessful applicants, i.e. RFMCs which have not conducted fund management activity for a continuous period of six months, will have to cease carrying out the regulated activity of fund management by 31 July 2024. They should ensure an orderly winding down of their business of regulated fund management.

Operating as an A/I LFMC

Immediately upon obtaining the licence as A/I LFMC, the previous RFMC must comply with all requirements applicable to an A/I LFMC. These requirements namely include the following:

Quarterly returns through Form 1 and Form 2 and the Quarterly Income & Expenditure Statement for Compilation Of Value-Added Of Financial Sector (Financial Institutions Excluding Insurance Companies) (the “QIE form”);
Annual returns through Forms 1 to 6;
Application for the MAS’ approval of new directors, a change in the nature of the appointment of a non-executive director to an executive director, and a new CEO;
Application for the registration of new representatives;
Register of securities of the Company and its representatives;
Notification of changes in specific personal details of the CEO and directors;
Misconduct reports or annual nil misconduct report, as applicable.

Although it must comply with all requirements applicable to an A/I LFMC, a former RFMC that transitioned through the Form 1AR process remains restricted to assets under management (“AuM”) of a maximum of SGD 250m. The MAS will impose this restriction through a licencing condition.

Former RFMCs that transitioned through the Form 1AR process will need to apply to the MAS for this AuM cap to be lifted. In its review of the application, the MAS will consider factors that include but are not limited to:

The regulatory compliance record of the fund management company (“FMC”), including complaints by third parties;
The FMC’s internal controls, risk management and compliance arrangements to support its intended business expansion;
The stability of the FMC’s board of directors, chief executive officer and senior management team;
The extent and nature of changes to the FMC’s business model and investment strategy.

Ingenia Consultants Pte. Ltd. has extensive experience in providing compliance support to RFMCs and A/I LFMCs. Based on the needs of the specific company, we assist in applications, draft and update policies and procedures andcarry out the compliance duties of the FMC as its outsourced compliance function or assist with specific questions. Reach out to us to discuss potential assistance in your application for the transition from an RFMC to an A/I LFMC, support in your compliance tasks as an A/I LFMC or for internal audit.

For any further information, please contact:

Rolf Haudenschild


Ingenia Consultants Pte. Ltd.