The Monetary Authority of Singapore (MAS) recently updated its Guidelines On Licensing And Conduct Of Business For Fund Management Companies (‘GLCB – FMC’).
We note in particular the updates of 3 September 2025 containing:
- updates on key personnel requirements; and
- a new definition of ‘AUM’.
Key Personnel Requirements
New criteria were added:
- For LFMCs, amendments made to Appendix 1 now make it clear that all Executive Directors are expected to have appropriate managerial and relevant experience suited to their specific responsibilities.
- For VCFMs, Section 4.2. explicitly requires that a VCFM must have a CEO employed full-time, based in Singapore, and involved in day-to-day operations.
‘Managed Assets’
The updated GLCB-FMC now provide a detailed definition of “assets under management” (AUM) in its Section 2.3.
1. Changes
The new version restructures the section into a clearer and more systematic format as it defines “assets under a Fund Management Company (FMC)’s management” directly and lists them under three distinct categories.
In particular:
- Both discretionary and non-discretionary arrangements are now clearly defined in separate sub-sections (2.3.1 and 2.3.2 respectively).
- Sub-section 2.3.3 introduces an important clarification: assets that are contracted to the FMC but sub-contracted to another party are now also included as managed assets. The new section removes ambiguity and expands the scope in practice for any FMC operating a “manager of managers” or sub-advisory model, closing a potential gap in regulatory oversight and ensuring these assets are counted consistently across the industry. By formally adding Section 2.3.3, the MAS confirmed its position that:
- The FMC that holds the primary client contract and bears the ultimate responsibility for the relationship must report the full value of the assets as its AUM.
- The regulatory reporting requirements should reflect the contractual responsibility of the licensed entity, irrespective of any delegation of the investment function.
- For the avoidance of doubt, undrawn commitments remain excluded (see footnote 6 to 2.3.1).
2. Impact assessment (2.3.3 re. sub-contracted assets)
The inclusion of sub-contracted assets under Section 2.3.3 primarily impacts the following two categories of reporting and regulatory compliance for FMCs:
a. Regulatory Filing and Annual Declarations
The most direct impact is on the periodic and annual reporting of AUM figures to MAS, which are used for statistical and supervisory purposes.
- MAS Quarterly/Annual Submissions: FMCs are required to submit regular returns to MAS that detail their AUM. The sub-contracted assets must now be explicitly and consistently included in this figure, as a distinct reporting line item in certain MAS survey forms.
Example: The MAS Survey of the Asset Management Industry often includes specific categories for reporting: “Funds contracted but sub-contracted to another party,” which directly corresponds to the AUM covered by Section 2.3.3.
b. Licensing Thresholds and Restrictions
The reported AUM figure is a critical metric used by MAS to determine an FMC’s regulatory status and the scope of its permitted activities.
- AUM Limits on Restricted FMCs: For FMCs licensed to serve only accredited and institutional investors (A/I LFMCs) that were transitioned from the former Registered Fund Management Company (RFMC) regime, their regulatory approval is often subject to an AUM cap (e.g., S$250 million). Any increase in AUM due to the inclusion of sub-contracted assets under Section 2.3.3 could cause the FMC to breach this limit, necessitating a license upgrade or a conversation with MAS.
- Retail FMC Requirements: For FMCs applying to or operating as Retail LFMCs (Licensed FMCs that can manage money for retail investors), MAS considers the firm’s total AUM, often setting a high benchmark (e.g., S$1 billion in total assets) as part of the assessment criteria for granting the license or assessing its track record. A larger AUM base resulting from the expanded definition strengthens the firm’s demonstrated size and scale.
- Ongoing Monitoring: FMCs subject to specific AUM limits (like the S$250 million cap) are explicitly required under the Guidelines (Section 2.4) to periodically monitor the size of the assets being managed to ensure adherence. The new, broader AUM definition directly raises the number they must monitor against the cap.
How can we help?
Exocap assists with FMC setup in Singapore, including licence application and compliance manual and policies drafting or review.
We also act as outsource regulatory compliance adviser for our clients on an ongoing basis.