Singapore eases VC registration process

The Monetary Authority of Singapore (MAS) has also decreed that VC managers will no longer be subject to the capital requirements and business conduct rules that currently apply to other fund managers. Its supervisory efforts will focus primarily on existing fit and proper and anti-money laundering safeguards under the Securities & Futures Act.

The changes follow a public consultation earlier this year, which coincided with recommendations from the Committee on the Future Economy – led by the minister for finance and the chairman of the Singapore Business Federation – that the country take steps to encourage the participation of long-term capital in the economy. Easing the regulatory regime was seen as one way of attracting PE investors.

Responding to feedback received during the public consultation, the MAS said in October that a simplified authorization and regulatory regime was appropriate given the contractual safeguards that already exist in venture capital.

To qualify for the venture capital regime – and the tax and other incentives that come with it – managers must: invest only in unlisted securities; invest at least 80% of committed capital in start-ups that are no more than 10 years old; operate closed-end funds, with units only redeemed at the end of the fund life; and limit marketing efforts to accredited or institutional investors. 

“The simplified VC manager regime recognizes the lower risks posed by VC managers given their business model and sophisticated investor base.  It will enhance the operating environment for VC managers to play a greater role in supporting start-up and growth stage businesses,” said Boon Ngiap Lee, assistant managing director for capital markets at the MAS, in a statement.

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• Topics
• Southeast Asia
• Venture
• Regulation
• Singapore
• Venture