Financial Services Event
On the 25th of October 2018, Argus Global, Director of Compliance, Rajiv Premkumar was invited to speak at an event for Financial Services. His topic of choice was the current Venture Capital Fund Management Regime in Singapore, given this is one of the hottest growth sectors for Asset Management in Asia. This was an invite-only event attended by a finely curated guest list comprising of senior members of the industry.
Changes in the last decade
Rajiv spoke in great depth about how the capital markets regime has changed through the last decade, touching on the greater scrutiny provided by regulators in Singapore, albeit with a more business-centric approach. The evolution of the Exempt Fund Manager regime to the Registered Fund Management Company cleaned up the market generally as small shops that were operating without much regulatory oversight lost their positioning, allowing for consolidation and for the bigger/more serious players to thrive. By doing this, the MAS ensured that existing managers had to abide by the new requirements and new players had to raise their standards to abide by these new rules.
Rajiv touched on the fact that due to the maturing of the markets and risk appetites changing since then, there became an apparent need for something similar to be put in place for venture capital fund managers. They needed to be able to get into new projects quick, by efficiently deploying assets on the ground into new projects, whether this may be at the initial start-up phase and pre-Seed funding rounds, to Series A, Series B and so on.
The new Venture Capital Fund Management regime was introduced to the market just about 1 year ago from this date, on the 20th of October 2017, as a means for any new market player intending to set up and run a venture capital fund management company to do just that. In summary, it is less regulatory onerous with lighter ongoing compliance requirements, no AUM caps, and the like. Generally, as long as 80% of the VCFM’s funds were committed capital in securities that were directly issued by an unlisted business venture that was not older than 10 years at the time of initial investment, most of the other requirements did not change. The remaining 20% was left open by the regulators for other types of investments.
Based on this, fund managers decide on the appropriate structure to use as a fund vehicle to pool the resources provided by their investors. This can be either via the commonly used Special Purpose Company/Vehicle, Limited Partnership structure, or possibly even the new Variable Capital Company. Each of these structures brings their own benefits, depending on the domicile of investors, type and location of investments, and whether this may be an open or closed-end fund (though to qualify for the VCFM regime, the fund should not be open-ended).
How will Argus help?
Argus provides the full spectrum of services to set up a Fund Management Companies with various business strategies including Venture Capital Fund Management and its ongoing compliance. Our dedicated regulatory compliance team comes with extensive knowledge, diverse experience and skills to assist you with all your compliance needs.
We can help you with the following:
- Setting up your business –We will incorporate the appropriate structure.
- License Application – We analyse your business type and help you put a regulated business plan together with your license application. We check all relevant documentation to be provided to the MAS prior to submission of your license Application.
- Policy and procedure – We ensure that your policies and procedures are adequately set up to complement your business strategy.
- Risk Management & Corporate Governance –We set up your Risk Management Framework & Compliance Monitoring Plan to ensure that the implemented policies and procedures are executed.
- Ongoing Compliance –We manage your compliance function to ensure ongoing monitoring and support in accordance to specified guidelines, industry requirements and
- Internal Audit – We carry out audits based on your particular requirements, whether this may be in preparation of a Regulator-visit, or to formally review and assess the processes in your firm, amongst others.