Guide to the MAS Repeal of the RFMC Regime: Migration to A/I LFMC Status

On 1 August 2024, the Monetary Authority of Singapore (MAS) officially repealed the Registered Fund Management Company (RFMC) regulatory regime. Introduced in 2012 as a transitional framework following the retirement of the Exempt Fund Manager (EFM) category, the RFMC status permitted fund managers to serve up to 30 qualified investors with total Assets Under Management (AUM) capped at S$250 million without holding a full Capital Markets Services (CMS) licence.

Following extensive industry consultation, MAS concluded that the operational profiles, risk management standards, and compliance expectations of RFMCs and Accredited/Institutional Licensed Fund Management Companies (A/I LFMCs) had largely aligned. To streamline regulatory oversight under the Securities and Futures Act 2001 (SFA), MAS unified the framework by migrating eligible RFMCs into the CMS licensing structure.

Key Differences: RFMC Framework vs. A/I LFMC Framework

Prior to the repeal, RFMCs operated under lower fee arrangements and simplified annual reporting, but faced strict statutory boundaries. Former RFMCs now operate under the unified A/I LFMC licence framework, subject to the following structural shifts:

Transition Outcomes for Existing Fund Managers

To facilitate the transition prior to the 1 August 2024 repeal date, MAS implemented a streamlined application pathway using Form 1AR between 1 April and 30 June 2024.

RFMCs that completed this transition were granted CMS licences for fund management restricted to accredited and institutional investors (A/I LFMC). Key operational impacts of this migration include:

1. Removal of Asset Caps: Migrated fund managers are no longer bound by the legacy S$250 million AUM ceiling, allowing funds to scale without applying for additional licensing upgrades.
2. Enhanced Governance Requirements: Former RFMCs must obtain prior MAS approval before appointing directors, chief executive officers, or changing substantial shareholding structures.
3. Quarterly Regulatory Reporting: Financial returns, risk-based capital calculations, and operational metrics must be submitted to MAS quarterly rather than annually.
4. Compliance Infrastructure: Former RFMCs with AUM exceeding S$1 billion must maintain an independent internal compliance team in Singapore. Smaller managers may engage external professional compliance advisors or leverage parent entity oversight.

Any entity that failed to complete the migration by the stipulated deadline was required to cease all regulated fund management activities in Singapore immediately.

Licensing Options for New Fund Managers Today

New entities entering Singapore’s asset management sector can no longer apply for RFMC registration. New entrants must choose from three primary options under the SFA:

• A/I LFMC Licence: For managers targeting accredited and institutional investors with no cap on AUM. Requires S$250,000 minimum base capital, two resident directors, and two appointed representatives.
• Venture Capital Fund Manager (VCFM) Title: A simplified CMS regime tailored for early-stage venture capital funds investing at least 80% of committed capital into unlisted startups founded within 10 years. VCFMs are exempt from risk-based capital rules and conduct audits.
• Retail LFMC Licence: Required for managers raising capital from retail investors. Involves higher base capital benchmarks (S$500,000 to S$1 million), prospectus registration, and full compliance arrangements.

Frequently Asked Questions

Can a new company register as an RFMC in Singapore?

No. MAS permanently closed the RFMC application portal in 2024. All new fund management applicants must apply directly for a CMS licence as an A/I LFMC, Retail LFMC, or VCFM.

Does the S$250 million AUM limit still apply to former RFMCs?

No. Upon migrating to A/I LFMC status, the S$250 million AUM cap and the 30-investor ceiling were automatically removed.

What are the ongoing audit requirements for converted A/I LFMCs?

Converted A/I LFMCs must undergo an independent annual financial audit and submit audited financial statements and regulatory returns to MAS within three months of their financial year-end under Section 107 of the SFA.

Regulatory and Compliance Support

Navigating CMS licensing, corporate restructuring, and ongoing MAS reporting demands dedicated expertise. The team at Alder Corporate Services assists fund managers with entity incorporation, licensing applications, and ongoing governance frameworks. Contact our advisory team for personalized guidance.