The Monetary Authority of Singapore simplifies and reduces the regulatory compliance burden for venture capital fund managers in Singapore.
Following a public consultation exercise in February 2017, the Monetary Authority of Singapore (MAS) announced on 20 October that a simplified authorization process and regulatory framework for venture capital fund managers (VCFM) will come into immediate effect (the VC Manager Regime). Fund managers who qualify for the VC Manager Regime may apply to the MAS to obtain a capital markets services license (CMSL) as a VCFM. Existing CMSL-holders and registered fund management companies that wish to be regulated as a VCFM instead may notify the MAS of the intention to transition to the VC Manager Regime.
Funds managed by a VCFM must satisfy the following criteria:
- the funds only invest in unlisted business ventures;
- at least 80% of the committed capital of the funds must be invested in securities that are directly issued by startups that have been incorporated for no more than a decade at the time of the initial investment;
- the funds must be closed-end – units of the funds must not be available for new subscription after the close of the fundraising period, and must only be redeemable at the end of fund life; and
- the funds are offered only to accredited and/or institutional investors.
Implementation of the VC Manager Regime is widely expected to boost the growth of startups and growth-stage businesses in Singapore by easing existing regulatory and compliance costs on VCFMs and by facilitating access to capital. Although some capital requirements and business conduct rules traditionally imposed on fund managers holding a CMSL have been relaxed under the VC Manager Regime, VCFMs should note that certain admissions and ongoing requirements continue to apply.