12 April 2024

On 28 March 2024, the Monetary Authority of Singapore (“MAS”) issued its response to feedback received from its consultation on the repeal of the regulatory regime for registered fund management companies (“RFMCs”).

This article summarises MAS’ clarifications in relation to the transitional arrangements for existing RFMCs, the limit on managed assets post-licensing, and the treatment of ongoing RFMC applications.


On 24 October 2023, MAS issued a consultation paper to seek feedback on the proposed transitional arrangements for existing RFMCs that intend to continue operating fund management businesses following the repeal of the regulatory regime for RFMCs. More information on the consultation is set out in our article “MAS consults on streamlined regulatory framework for fund managers”.

Transitional arrangements

Application to be A/I LFMC 

MAS targets to repeal the RFMC regime on 1 August 2024. Existing RFMCs that intend to continue undertaking fund management activity after this date must apply to be licensed fund management companies (holding capital markets services (“CMS”) licences) that are restricted to serving accredited and institutional investors (“A/I LFMC”) by completing and submitting the application form (“Form 1AR”) between 1 April 2024 and 30 June 2024.

Applicants will be informed of their outcome within a month of submission, and until such time, should continue to update MAS of any changes in particulars on a timely basis, in accordance with prevailing RFMC requirements. MAS expects to issue CMS licences to all successful applicants by end-July 2024.

MAS states that it will approve an RFMC’s application to be an A/I LFMC if the RFMC:

  • has managed assets attributable to third-party investors in the six months immediately preceding the submission of the application to MAS. This requirement does not apply if the RFMC is registered for six months or less as at the submission date;
  • submits Form 1AR within the stipulated timeline; and
  • satisfactorily furnishes supporting documents to MAS, if requested.

Unsuccessful Form 1AR applications

RFMCs which have not conducted fund management activity for a continuous period of six months will cease to be registered as RFMCs and would no longer be allowed to carry on fund management activity. In line with the existing arrangement for the cessation of an RFMC’s registration, there will not be an appeal process for these entities.

Exempt representatives of RFMCs

Exempt representatives of RFMCs under section 99B(1)(d) of the Securities and Futures Act 2001 (“SFA”) will become appointed representatives (as defined under section 99D(1) of the SFA) on the same date that the RFMC is licensed. MAS will publish the names of appointed representatives on the MAS Register of Representatives, based on the information provided by RFMCs in their previous Form 23A notifications to MAS. There is no need for the RFMC to file any additional documents in respect of their representatives.

Prior to licensing, RFMCs should:

  • update MAS immediately of any changes to their representatives or to their particulars; and
  • ensure that all of their representatives meet the requirements of the Notice on Minimum Entry and Examination Requirements for Representatives of Holders of Capital Markets Services Licence and Exempt Financial Institutions (SFA 04-N09).

Continuity of operations and applicable requirements during and after application

Throughout the application process, RFMCs can continue operating without disruptions. RFMCs should continue to comply with the regulatory requirements applicable to RFMCs during this period, e.g. filing of notifications and annual declarations. Upon being issued a licence, the additional regulatory requirements for A/I LFMCs will take immediate effect. These requirements include prior approvals for certain changes relating to the fund management company (“FMC”) and quarterly regulatory filings.

RFMCs that are in the midst of addressing ongoing regulatory issues (e.g. remediating certain internal control deficiencies post-inspection) can apply to be A/I LFMCs. For such RFMCs, MAS cautions that even if the application to be licensed as an A/I LFMC is approved, it should not be taken to mean that the ongoing issues have been resolved or that MAS is satisfied with the robustness of the RFMC’s internal controls. Such RFMCs will be required to complete the remediation of such ongoing issues post-licensing.

Communication with investors and cessation of fund management business

RFMCs should consider if it would be in their investors’ interest to be notified of the RFMC’s intentions ahead of the repeal of the regime.

RFMCs which do not obtain CMS licences before the repeal date will no longer have a valid regulatory status to carry out fund management when the repeal takes effect. Unless an existing licensing exemption applies, such RFMCs will be in breach of regulatory requirements if they continue to conduct any SFA-regulated activity. FMCs that intend to cease their fund management business should ensure an orderly winding down of their business operations. This applies to RFMCs which do not apply for or obtain CMS licences when the repeal take effect.

Limit on assets post-licensing

Clarification on AUM Cap 

Given that most RFMCs are operating far below the limit of S$250 million of assets under management (“AUM Cap”) and tend to be set up to handle smaller pools of assets, with corresponding simpler internal controls and staffing arrangements, MAS will continue to impose the AUM Cap on RFMCs that are approved to become A/I LFMCs. Such A/I LFMCs can make an application to MAS to request a lifting of the AUM Cap post-licensing.

Considerations in relation to requests to lift AUM Cap

When assessing requests to lift the AUM Cap, MAS will consider factors that include but are not limited to the following:

  • the FMC’s regulatory compliance record which takes into account the frequency and severity of any past regulatory breaches, complaints made by investors or third parties against the FMC or its management, and the FMC’s receptivity and willingness to address regulatory issues that were highlighted to the FMC’s management;
  • the FMC’s internal controls, risk management, and compliance arrangements to support its intended business expansion. MAS may require independent audits should there be concerns over the FMC’s ability to maintain effective risk management and controls over its fund management activities;
  • stability of the FMC’s board of directors, Chief Executive Officer and senior management team; and
  • extent and nature of changes to the FMC’s business model and investment strategy.

MAS will publish the application form for A/I LFMCs for the lifting of the AUM Cap in due course.

By default, MAS will not impose the AUM Cap on applicants that apply to be A/I LFMCs via the regular application process, i.e. via Form 1A. However, MAS may in specific cases impose conditions to address risks associated with unique or novel business models proposed by these applicants. 

Treatment of ongoing RFMC applications 

MAS has stopped accepting new RFMC applications since 1 January 2024. For RFMC applications submitted prior to that date, MAS will continue to review such applications and successful applicants will be asked to submit Form 1AR, after which they will be licensed as A/I LFMCs with the AUM Cap, notwithstanding that they had originally applied to be RFMCs.

Reference materials

The Response to Consultation on Repeal of Regulatory Regime for Registered Fund Management Companies is available on this webpage of the MAS website www.mas.gov.sg.