On 24 October 2023, the Monetary Authority of Singapore (MAS) issued a consultation paper on the repeal of the regulatory regime for Registered Fund Management Companies (RFMCs).

MAS considers that the RFMC regime, which was introduced in 2012 to facilitate the transition of exempted fund managers at that time, has outlived its purpose. MAS believes that a simplified regulatory framework with harmonised requirements for all fund managers will support sustainable growth in the longer term.

Under the proposal, the existing RFMC regime will be repealed, and existing RFMCs can transition to become Accredited/Institutional Licensed Fund Management Companies^[1] (LFMCs) by applying for a Capital Markets Services (CMS) license for fund management. Key details include:

1. Application: RFMCs must apply for a CMS licence before the repeal. RFMCs that do not apply by the deadline will be considered to have opted to cease fund management activities upon the repeal.
2. Eligibility: MAS will grant a CMS licence to RFMCs that apply within the stipulated timeline and have been conducting fund management activities in the preceding six months.
3. Response time: MAS will respond to all applications within a month of submission.
4. Fees: No application fee for the corporate entity or any fee for the notification of their existing representatives. Upon being licensed, the prevailing CMS annual corporate licence fee and representative fees will apply on a pro-rated basis.

Specific restrictions and requirements will apply to LFMCs transitioned from RFMCs, including:

1. Managed assets limit: Transitioned LFMCs will be restricted to S$250 million of managed assets; they may engage MAS to review this condition.
2. Reporting requirements: Transitioned LFMCs must comply with the reporting requirements applicable to typical LFMCs and seek MAS’ prior approval for certain changes, such as their shareholders and key appointment holders. In addition, they will need to comply with existing RFMC requirements for changes in particulars that occur before the repeal date and submission of annual regulatory returns for the financial year ending before the repeal date.
3. Written directions and/or specific conditions: RFMCs that have been issued written directions or have specific conditions imposed on their regulatory status will continue to have these directions and conditions apply even after they become LFMCs.

MAS will stop accepting new RFMC applications from 1 January 2024. Thereafter, applicants seeking to conduct fund management activities can apply for a CMS licence, after ensuring that they are able to meet all admission and ongoing requirements.

The consultation period is open until 31 December 2023.

^[1] Licensed Fund Management Companies in Singapore are categorized into:

• Retail LFMC – Manages funds for all types of investors, including retail investors.
• Accredited/Institutional LFMC (A/I LFMC) – Manages funds for accredited and institutional investors only. 
• Venture Capital Fund Manager (VCFM) – Manages venture capital funds for accredited and institutional investors only. Such funds have to meet certain fund eligibility criteria such as being mainly invested in start-ups.

Under the proposed transitional arrangements, RFMCs can only apply to become A/I LFMCs.