MAS Simplifies Rules For VC Managers

MAS Simplifies Rules For VC Managers

The Monetary Authority of Singapore announced last week the introduction of simplified regulatory regime for managers of venture capital funds.

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The Monetary Authority of Singapore (MAS) announced last week the introduction of simplified regulatory regime for managers of venture capital funds (VC managers).

The new regulatory framework will simplify and shorten the authorisation process of VC managers.

“MAS will no longer require VC managers to have directors and representatives with at least five years of relevant experience in fund management.“, according to MAS`s press release.

Furthermore, VC managers will not be subject to the capital requirments and other funding rules that apply to other fund managers. MAS will focus on existing fit and proper and anti-money laundering safeguardsunder the Securities and Futures Act.

The VC manager regime will require VC managers to manage funds that meet the following characteristics that were listed by MAS in their press statement:

  • invest in business ventures that are not listed on a securities exchange;
  • invest at least 80% of committed capital in securities that are directly issued by start-ups that are no more than ten years old;
  • units of the funds are not available for new subscription after the close of fund-raising, and can only be redeemed at the end of the fund life; and
  • are offered only to accredited and/or institutional investors.

“The simplified VC manager regime recognises the lower risks posed by VC managers given their business model and sophisticated investor base.”, commented Mr Lee Boon Ngiap,  Assistant Managing Director, Capital Markets, MAS.

MAS made a response to the public consultation on the subject. It can be found on the following link.

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