The Venture Capital Fund Management Company (VCFM) was introduced by the Monetary Authority of Singapore (MAS) in 2017 and is often described as a light-touch supervision framework.
The VCFM regime simplifies and shortens the authorisation process for managers of venture capital funds seeking a capital markets services (CMS) license. Its primary objectives are:
- Supporting start-ups: By streamlining regulatory requirements, the VCFM regime encourages investment in start-up and growth-stage businesses.
- Enhancing operating environment: VCFMs benefit from exemptions, including no minimum base capital requirements and relaxed business conduct rules compared to other fund managers.
VCFMs can only manage funds that meet specific criteria:
- At least 80% of committed capital (excluding fees and expenses) must be invested in qualifying investments issued by unlisted business ventures incorporated for no more than ten years.
- Up to 20% of committed capital can be invested in non-qualifying investments (e.g., ventures incorporated for over ten years or secondary market acquisitions).
- Funds must not be continuously available for subscription and must not be redeemable at the investor’s discretion (i.e. closed-ended funds).
- Funds shall be offered only to accredited investors or institutional investors (as defined by the Securities and Futures Act).
Download our VCFM leaflet:
Exocap – VCFM – Leaflet – 2024
Exocap’s publications connected to this topic:
Regulatory Update – Singapopre – Funds Managed by VCFMs – Jun 24
