Source of article: The Business Times
In summary:
The Monetary Authority of Singapore released a public consultation paper on the repeal of the regulatory regime for registered fund management companies (“RFMCs”) on 24 October 2023.
The RFMC regime was introduced in 2012 following the repeal of the Exempt Fund Manager (“EFM”) regime.
The proposed repeal of the RFMC regime is a regulatory development that would be in sync with the maturity and state of development of the Singapore fund management industry. The growth of RFMCs has stalemated over the last 7 years, while most new entrants to the industry are applying to be fund managers serving accredited or institutional investors (“A/I LFMCs”) where they are not constrained by the SGD 250 million assets management ceiling.
The raison d’etre for the RFMC regime has served its purpose in transitioning the previous pool of EFMs into a regulated regime. It is an appropriate juncture for Singapore to do away with a dual regulatory framework and have a standard compliance regime for fund management companies.
The present admission criteria and continual compliance requirements are substantively identical for A/I LFMCs and RFMCs which are restricted to serving accredited or institutional investors, save for the frequency and technical details of the reporting requirements, and the lower fees payable by RFMCs.
A universal and congruent regulatory regime for all fund managers will facilitate a more meaningful and sustainable growth of the Singapore fund management industry that has come of age since the legislation of the RFMC regime to pivot the migration of the previous pool of EFMs.
It is cardinal that the transitioning of existing RFMs to “emigrate” to A/I LFMCs must be carefully calibrated and structured to ensure a seamless process to minimize disruptions to the operations and business continuity of the RFMCs. Any untoward disruptions to the business operations of existing RFMCs or perceived abruptness of change not properly managed may have a dampening effect on the market reputation of Singapore.
I shared my views with Navene Elangovan in the attached story published by the Singapore Business Times on 26 October 2023.
My post on LinkedIn is here