Latest News

In April 2017, the Monetary Authority of Singapore (‘MAS’) concluded a public consultation on the Singapore Variable Capital Company (‘S-VACC’), a new corporate structure for investment funds designed to offer asset managers greater flexibility and lower costs, and further enhance Singapore’s status as a focal point for asset management in Asia.

Currently, there are three types of structures used by investment funds in Singapore: unit trusts; companies formed under the Companies Act; and limited partnerships. The S-VACC seeks to complement these existing structures with one that is tailored for investment funds. With the S-VACC framework, the MAS aims to offer a flexible and efficient platform for fund managers to co-locate fund domiciliation with their substantive fund management activities in Singapore.

The proposed framework is intended to cater to both open-ended and closed-end investment funds and allow for segregation of assets and liabilities of sub-funds within an umbrella structure. This will allow asset managers to achieve cost efficiencies by consolidating administrative functions at the umbrella fund level.

Shares of the S-VACC would generally be issued and redeemed at net asset value to ensure accountability and transparency for creditors.

Incorporation would be made through the Accounting and Corporate Regulatory Authority (‘ACRA’) and supervised by MAS through the Securities and Futures Act. MAS would also regulate the fund manager. A minimum of one director who is ordinarily resident in Singapore would be required, and at least one director of the S-VACC must also be a director of the fund management company.

The regulation would be separate from Singapore company legislation and allow a customised corporate structure which dispenses with elements of existing company law that are not conducive to investment funds. It would also allow domestic conversion and foreign inward re-domiciliation of an existing fund to an S-VACC.