Overview of Fund Management Companies (FMCs)
What is a Fund Management Company?
According to MAS (Pages),
last revised 16 August 2021
If a company raises and manages third party investors’ funds in a collective investment scheme, or invest them in segregated accounts into capital markets products, such as equities, fixed income and financial derivatives, it is conducting fund management and would need to be licensed or registered to do so. On the other hand, if a company is managing proprietary monies, or monies belonging to a single party or group of related entities, it is likely to be able to be exempt from licensing or registration. Please see the next section on licensing exemptions for additional reference.
If the scope of a company’s fund management activities falls within certain categories, it may be eligible for an exemption from licensing or registration to conduct fund management. Examples of such companies are those that:
- Manage a pool of immovable assets for accredited and institutional investors;
- Manage funds for related corporations; or
- Manage moneys belonging to a single group of related family members.
In certain scenarios, companies may need to apply to MAS specifically for exemption if they do not fall neatly within the pre-defined scope of exclusion. You can find more information on exemptions under section 99 of the SFA and paragraph 5 of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations.