With approximately $5.4 trillion worth of assets under management (AUM) and 1,000 registered and licensed fund managers in Singapore, fund management is a significant part of the global financial industry.
In fact, it is one of the most attractive destinations for fund managers and investors, with investment fund types spanning pension funds, sovereign wealth funds, and family offices.
To access this lucrative market, a fund management licence is necessary for anyone looking to engage in fund management activities in Singapore.
In this article, we will share what a fund management licence is, why it is needed, the benefits of getting one, and how one can get this licence in Singapore.
What is a Fund Management Licence?
A fund management licence is a permit granted by the Monetary Authority of Singapore (MAS).
An individual or an enterprise that wants to conduct regulated asset management activities in Singapore must be registered with MAS or possess a capital market services (CMS) licence under the Securities and Futures Act (SFA).
Listen to Podcast: Episode 3: Fund/Wealth Management Industry in Singapore »
Why is a Fund Management Licence Needed?
A fund management licence is needed to ensure that fund managers in Singapore meet the necessary standards and regulations set by the MAS.
While Singapore is one of the most open markets in the world, these regulations are put in place to protect investors and maintain the integrity of the financial system.
Related Read: Fund Structuring in Singapore: Is it Suitable For You? »
Benefits of Getting a Fund Management Licence in Singapore
Singapore is an attractive location for fund managers due to its stable political and economic environment, supportive regulatory framework, and skilled workforce.
Obtaining an investment management licence in Singapore can offer several benefits, including:
Access to a Large Pool of Investors
Singapore’s location in the heart of Asia provides fund managers with access to a diverse pool of investors from around the region.
Access to Growth Potential
Singapore provides an English-speaking bridge between Western and Eastern markets, allowing managers to tap into the growth potential of both regions.
Easier to Manage Regulatory Requirements
Singapore has a well-established regulatory framework that is transparent and predictable, making it easier for fund managers to navigate the regulatory landscape.
Tax Incentives
Singapore offers various tax incentives to fund managers, including exemptions on certain types of income and tax incentives for fund management activities.
Related Read: 6 Ways to Lower Your Corporate Taxes in Singapore Legally »
Easier to Gain and Retain Talent
Singapore has a highly skilled and educated workforce, making it easier for fund managers to recruit and retain top talent.
Related Read: What is the X Factor That Makes Singapore a Global Talent Hub? »
Types of Fund Management Activities
There are two major types of operations for fund management activities in Singapore:
- Registered Fund Management Company (RFMC), which can operate with up to S$250 million of AUM, and 30 accredited and institutional investors.
- Capital Markets Services Licence (CMS)/Licensed Fund Management Company (LFMC), which can then be further categorised as:
- Retail LFMC – Fund management with all types of investors, including retail.
- Accredited/Institutional LFMC (A/I LFMC) – Fund management with accredited and institutional investors only.
- Venture Capital Fund Manager (VCFM) – Manages venture capital funds only that are restricted to serving only accredited and institutional investors.
Fund Management Licensing Requirements
Licencing requirements will vary depending on the operation:
| Type of Fund Manager | Retail LFMC | Accredited/Institutional LFMC (A/I LFMC) | VCFM |
|---|---|---|---|
| Financial Requirements |
|
|
|
| Staffing Requirements |
|
|
|
| Annual Corporate Fee |
|
S$4,000. | |
MAS also considers these factors:
- Whether the applicant can fulfil the minimum financial requirements as per the SFA
- The business model, plans, projections, and related risks
- The robustness of compliance and internal risk management systems
- The integrity and fitness of the applicant, directors, and shareholders
- The track record of and fund management skills that the applicant and its main company or shareholders have
How Can You Get a Fund Management Licence in Singapore?
The application process for getting a fund management licence in Singapore will depend on the operation:
Applying for Retail LFMC or A/I LFMC
To apply for a capital markets services (CMS) licence to manage investment funds, use Form 1A. There is a non-refundable application fee of S$1,000.
Applying for VCFM
To apply for a CMS licence as a Venture Capital Fund Manager, use Form 1V. There is a non-refundable application fee of S$1,000.
Applying for RFMC
To apply for Commencement of Business as a Registered Fund Management Company, use Form 22A.
How Long Does It Take To Apply for a Fund Management Licence in Singapore?
It can take up to six months to process LFMC and RFMC applications, and up to four months to process VCFM applications.
Where to Next for Getting a Fund Management Licence in Singapore
Obtaining a fund management licence in Singapore can offer several benefits to fund managers, including access to a large pool of investors, an efficient regulatory environment, tax incentives, and a skilled workforce.
Singapore’s strategic location, stable political and economic environment, and advanced infrastructure also make it an attractive location for those looking to set up a fund or engage in fund management activities.
If you require assistance in exploring the process of obtaining your fund management licence in Singapore, InCorp is well-placed to assist you.
Our experienced team of professionals can help guide you through the process and provide support with all aspects, from fund formation to post-licensing compliance.
Contact us today and let us help you get started on your journey to accessing the lucrative fund management sector in Singapore.
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Frequently Asked Questions
- You can obtain yours easily by engaging a fund management license expert like InCorp to help you apply and handle the application process.
- InCorp’s fund management license advisors can help you to navigate the regulatory requirements and guidelines to ensure that you get your license successfully.
- You can engage our company incorporation professionals to get your business off the ground quickly.
Get our reliable professionals to help you secure your fund management license in Singapore.
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