Nature of Variable Capital Companies (VCCs)
What is a Variable Capital Company (VCC)?
The Variable Capital Company (VCC) is a corporate structure for investment funds constituted under the Variable Capital Companies Act 2018.
The VCC Act and subsidiary legislation is administered by ACRA, while the anti-money laundering and countering the financing of terrorism obligations of VCCs will come under the purview of the Monetary Authority of Singapore (MAS). All VCCs must be managed by a Licensed Fund Manager. Please see licensed fund manager for more information.
Some key features of a VCC
- has a variable capital structure that provides flexibility in the issuance and redemption of its shares. It can also pay dividends out of capital, which gives fund managers flexibility to meet dividend payment obligations.
- can be set up as a single standalone fund or an umbrella fund with two or more sub-funds, each holding an independent portfolio of segregated assets and liabilities.
- assets & liabilities of each sub-Fund of a VCC are legally segregated. This ensures ring-fencing of assets and liabilities between various sub-funds; thus, avoiding cross-contamination risks associated with traditional multi-class funds.
- each sub-fund of a VCC may be wound up independent of each other
- can be used for both open-ended and closed-end fund strategies
- VCCs must maintain a register of shareholders, which need not be made public. However, this register must be disclosed to public authorities upon request for regulatory, supervisory and law enforcement purposes.
- Fund managers may incorporate new VCCs or re-domicile their existing overseas investment funds with comparable structures by transferring their registration to Singapore as VCCs.
MAS and ACRA may introduce new features in future.