Nature of Real Estate Investment Trusts (REIT)
What are the criteria for the grant of a CMS Licence for a REIT?
MAS has outlined the following in relation to a CMS licence for REITs.
2.1 A REIT manager should be a Singapore-incorporated company and have a permanent physical office in Singapore.
2.2 A REIT manager should satisfy MAS that it will discharge its duties, efficiently, honestly and fairly.
2.3 A REIT manager should satisfy MAS that its substantial shareholders, directors, representatives and employees, as well as the REIT manager itself, are fit and proper, in accordance with the Guidelines on Fit and Proper Criteria (Guideline FSG-G01) issued by MAS.
2.4 A REIT manager should satisfy MAS that its controlling shareholders, where applicable, have established track records in managing, investing in, or advising on the type of real estate to be invested by the REIT, for the past 5 years at a minimum.
2.5 A REIT manager should satisfy MAS that its controlling shareholders, where applicable, have good rankings in their home countries.
2.6 A REIT manager should conduct the following activities, in relation to the management of the REIT, in Singapore: (a)accounting; (b) compliance; and (c) investor relations
2.7 The Singapore operations of the REIT manager should have a meaningful role in the management of the REIT, relative to any other related entities or branch offices, as the case may be, which may also have responsibility for the management of the REIT. The following non-exhaustive factors are relevant to MAS’ assessment of the role of the Singapore operations in the management of the REIT: (a) the composition and mandate of the REIT manager’s board of directors and management committees; (b) the extent to which the Chief Executive Officer [“CEO”] and directors who are resident in Singapore participate in the formulation of investment strategies and financing activities of the REIT manager.
REITs need to adhere to MAS’ specific criteria for REITs in order to obtain a CMS licence.