What is the difference between an RFMC, LFMC (AI), and LFMC (Retail)?
Registered Fund Management Company (RFMC)
RFMCs are allowed to manage funds of up to 30 qualified investors of which no more than 15 may be funds or limited partnership fund structures. AUM must not exceed $250m and a base capital requirement of $250k must be maintained.The company must have a minimum of 2 directors with at least 5 years of relevant experience (of which one is an executive director and resident in Singapore)
Licensed Fund Management Company (Accreddited Investor) (LFMC (AI))
LFMC (AI) s have no restrictions on the number of qualified investors or AUM but must maintain a minimum base capital of $250k and Risk based capital of $120% of operational risk requirement.The company must have a minimum of 2 directors with at least 5 years of relevant experience (of which one is an executive director and resident in Singapore)
Licensed Fund Management Company (Retail)
LFMC (Retail) have no restriction on the type of investors nor AUM, but must maintain a minimum base capital of $500k and Risk based capital of $120% of operational risk requirement. The company must have a minimum of 2 directors with at least 5 years of relevant experience (of which one must have at least 10 years of relevant experience, is an executive director and resident in Singapore).The Shareholder of the FMC must have a corporate track record of operating a regulated entity that conducts fund management for retail investors in an equivalent jurisdiction for at least 5 years and managing a global AUM of at least S$1b.
MAS recognises licenced fund management companies (LFMCs), registered fund management companies (RFMCs). LFMCs can be further divided into accredited/institutional LFMC (A/I LFMC) and retail LFMCs. These FMCs differ by their AUM and their type and number of investors.
There are also licensed venture capital fund managers (VCFMs) for those who wish to manage venture capital funds.
According to MAS (Guidelines)
last revised on 1 March 2022Table 1 – Categories of FMCs
Category Permissible Activities Retail LFMCs Carrying on business in fund management with all types of investors, without restriction on the number of investors. A/I LFMCs Carrying on business in fund management with qualified investors only, without restriction on the number of qualified investors. VCFMs Carrying on business in fund management in respect of venture capital funds with qualified investors only, without restriction on the number of qualified investors. Venture capital funds are subject to restrictions on investments and fund type – refer to Appendix 7 for details. RFMCs Carrying on business in fund management with no more than 30 qualified investors (of which no more than 15 may be funds or limited partnership fund structures) AND the total value of the assets managed does not exceed S$250 million. According to MAS (Pages)
last revised on 13 October 2021What are the applicable financial and staffing requirements?
Retail LFMC Accredited/Institutional LFMC (A/I LFMC) VCFM RFMC - Minimum base capital of S$500,000 or higher
- Required to maintain financial resources which are in excess of its total risk requirements
- Minimum base capital of S$250,000
- Required to maintain financial resources which are in excess of its total risk requirements
- None - Minimum base capital of S$250,000 - Minimum of 3 full-time Singapore-based employees each with at least 5 years of relevant experience
- Proposed CEO must have at least 10 years of relevant experience
- Independent and dedicated compliance function in Singapore required- Minimum of 2 full-time Singapore-based employees each with at least 5 years of relevant experience
- Independent and dedicated compliance function in Singapore required if AUM is at least S$1 billion- Minimum of 2 full-time Singapore-based employees - Minimum of 2 full-time Singapore-based employees each with at least 5 years of relevant experience
More details on the base capital and other financial requirements can be found in the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations (SF(FMR)R) . The base capital requirements are set out in the First Schedule to the SF(FMR)R .
Details of the financial resources requirement are found in the Notice SFA 04-N13 Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licences.