Setting Up a Singapore Fund Management Company

SETTING UP A SINGAPORE O FUND MANAGEMENT COMPANY a Rikvin Infographic www.rikvin.com Fund management in Singapore is regulated by the Monetary Authority of Singapore (MAS) in accordance with the Securities and Futures Act (SFA) and the subsidiary legislation thereunder. $4 MAS mandates that the category a Fund Management Company (FMC) chooses accommodates its needs over reasonable time-frame. The different categories of FMCS available in Singapore are: Registered Fund Mangement Company Licensed Mangement Company REGISTERED FUND MANAGEMENT COMPANY (RFMC) Not more than 30 Qualified Investors* Investor Profile Assets under management (AUM) not exceeding S$250 million min. Base Requirement Capital $250,000 SGD Company Directors / Representatives Requirements 1 At least two (2) Directors at least 5 years experience in the financial services industry** At least two (2) Singapore resident representatives One (1) of whom must be the Chief Executive Officer 3 At least two (2) relevant professionals who are: One (1) of whom must be an Executive Director: a Singapore resident a Singapore resident full-time basis in the day-to-day operations of the company full-time at least 5 years relevant experience*** The above 3 three requirements for two (2) directors, two (2) representatives and two i (2) relevant professionals are not mutually exclusive in that the same 2 persons can fulfill all 3 separate requirements if they have the necessary experience and attributes. **This includes managerial experience in a supervisory capacity, depending on the context of the role that the individual will perfom. ***Depending on the context of the role that the individual will perfom. Risk Management Framework Must be in accordance with the principles set out in the prescribed guidelines on risk management practices and should at least cover the: RISK governance, independence and competency of the risk management function identification and measurement of risks associated with customer assets timely monitoring and reporting of risks to management documentation of risk management policies, procedures and reports Minimum Compliance Arrangements Should ideally have an independent compliance function in-house or have compliance support from an overseas affiliate. V May rely on external service providers for compliance support. Audit Requirements Required to conduct adequate internal audits along with annual indepedent audits. Not compulsary but strongly encouraged, should disclose such arrangements or the lack thereof to all customers. Professional Indemnity Insurance LICENSED FUND MANAGEMENT COMPANY (LFMC) LICENSED FMC FOR LICENSED FMC FOR ACCREDITED INVESTORS RETAIL INVESTORS (A/I LFMC) (RETAIL LFMC) Qualified General Investors* Investor Profile public only Resident Directors / Representatives Requirements (Nominee directors are not allowed) 1 At least two (2) Directors At least two (2) Directors at least 5 years experience in the financial services industry** at least 5 years experience in the financial services industry** One (1) of whom must be the One (1) of whom must be the Chief Executive Officer Chief Executive Officer at least 10 years experience in the financial services industry** One (1) of whom must be an Executive Director: One (1) of whom must be an Executive Director: a Singapore resident full-time basis in the day-to-day operations of the company a Singapore resident full-time basis in the day-to-day operations of the company 2 At least two (2) Singapore resident representatives At least three (3) Singapore resident representatives 3 At least two (2) relevant professionals who are: At least three (3) relevant professionals who are: a Singapore resident a Singapore resident full-time full-time at least 5 years relevant experience*** at least 5 years relevant experience*** The above 3 three requirements for directors, representatives and relevant professionals are i not mutually exclusive in that the same 2 persons (3 persons for Retail LFMC) can fulfill all 3 separate requirements if they have the necessary experience and attributes. **This includes managerial experience in a supervisory capacity, depending on the context of the role that the individual will perfom. ***Depending on the context of the role that the individual will perfom. Base Requirement Сapital min. $1,000,000 SGD where FMC is operating a Collective Investment Scheme (CIS). min. $250,000 SGD min. $500,000 SGD where FMC is operating scheme that does not qualify as CIS. Risk-based Capital Management Financial resources are at least 120% of operational risk requirements EV Minimum Compliance Arrangements Held to same standard as RFMCS where AUM is less than S$1 billion or if the A/I LFMC is merely carrying out research and advisory activities. Should have independent and dedicated compliance function in Singapore that is run by staff who are suitably qualified and independent from the other departments. A/I LFMCS with AUM of S$1 billion or more are held to the same standard as retail LFMCS. A Risk Management Framework Must be in accordance with the principles set out in the prescribed guidelines on risk management practices and should at least cover the: V governance, independence and competency of the risk management function / identification and measurement of risks associated with customer assets / timely monitoring and reporting of risks to management documentation of risk management policies, procedures and reports Audit Requirements Required to conduct adequate internal audits along with annual indepedent audits. Professional Indemnity Insurance Not compulsory but strongly encouraged, should disclose such arrangements or the lack thereof to all customers. Required depending on AUM Letter of Responsibility MAS may require such a letter to be procured from LFMC's parent company (if applicable). *Note that Qualified Investors (or accredited investors) are: (a) individuals whose net personal assets are valued at more than S$2M (or its equivalent in a foreign currency) or whose income in the preceding 3 months is not less than S$300,000 (or its equivalent in a foreign currency); and/or (b) corporations with net assets exceeding S$10M (or its equivalent in a foreign currency). The Monetary Authority of Singapore (MAS) will ultimately decide if the FMC and its employees are "fit and proper" in accordance with its guidelines which place an emphasis on: (a) honesty, integrity and reputation; (b) competence and capability, and (c) financial soundness. READY TO START YOUR OWN SINGAPORE FUND MANAGEMENT COMPANY? Our incorporation specialists can help you. Call us at +65 6320 1888 for a free consultation. RIKVIN RIKVIN PTE LTD | 30 Cecil Street, #19-08 Prudential Tower, Singapore 049712 Phone: (+65) 6320 1888 | Fax: (+65) 6438 2436 | [email protected] | www.rikvin.com