MAS proposes fund management regulation shake-up with new framework

If approved, the existing RFMC regime will be repealed.

The Monetary Authority of Singapore (MAS) has launched a public consultation to streamline the regulatory framework for fund managers.

In the proposed framework, existing Registered Fund Management Companies (RFMC) regime will be repealed, with existing RFMCs already in operation to be approved as Licensed Fund Management Companies (LFMCs) upon application.

The RFMC regime was first introduced in 2012, following the repeal of an earlier regime for Exempt Fund Managers (EFMs) to facilitate the transition of EFMs into a fully regulated regime. 

At the time, EFMs in existence had the option to apply to become either an RFMC or 
a LFMC. RFMCs have similar admission criteria and business conduct requirements as LFMCs that serve only accredited or institutional investors (A/I LFMCs).

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RFMCs are subject to lighter requirements in terms of the frequency and granularity of regulatory reporting, given the limits placed on their assets under management and number of customers.

“Since 2012, the business models and risk profiles of RFMCs and A/I LFMCs have 
increasingly converged, making the regulatory distinction between the two less meaningful,” Singapore’s financial regulator noted in a press statement announcing the public consultation.

Many RFMCs have reportedly upgraded to become A/I LFMCs as their businesses grew, and most new entrants seeking to conduct fund management in Singapore tend to apply to be A/I LFMCs rather than RFMCs, MAS noted.