Regulations for Fund Management Companies

If a capital market services licensee carries out the regulated activities in 3.3.3 below and its average adjusted assets at the end of the quarter do not exceed $10 million or 5 times of its financial resources/ adjusted net head office funds (whichever is lower), its total risk requirement = operational risk requirement + anything else MAS may require. Else, it will be calculated as = operational risk requirement + counterparty risk requirement +position risk requirement + underwriting risk requirement + large exposure risk requirement + anything else MAS may require.

According to MAS (Notices),
last revised on 28 September 2021

3.3.1 Subject to paragraphs 3.3.2 to 3.3.3, total risk requirement –

(a) in relation to a CMSL licensed only to carry out the regulated activities of:

(i) fund management;
(ii) real estate investment trust management;
(iii) advising on corporate finance;
(iv) providing custodial services;
(v) dealing in capital markets products, where the CMSL is a limited activity CMSL; or (vi) a combination of the regulated activities set out in (i) to (v),

which meets the conditions set out in paragraph 3.3.3, shall be the sum of the –

(A) operational risk requirement calculated in accordance with Part IV; and
(B) any other risk requirement as the Authority may by notice in writing impose on the relevant CMSL concerned;

(b) in relation to any other CMSL, shall be the sum of the –

(i) operational risk requirement calculated in accordance with Part IV;
(ii) counterparty risk requirement calculated in accordance with Part V;
(iii) position risk requirement calculated in accordance with Part VI;
(iv) underwriting risk requirement calculated in accordance with Part VII;
(v) large exposure risk requirement calculated in accordance with Part VIII; and
(vi) any other risk requirement as the Authority may by notice in writing impose on the relevant CMSL concerned.

3.3.2 If a CMSL that calculates its total risk requirement in accordance with paragraph 3.3.1(a) does not meet the conditions set out in paragraph 3.3.3, the CMSL shall, within 30 calendar days from the end of the quarter that it does not meet the conditions set out in paragraph 3.3.3, calculate its total risk requirement in accordance with paragraph 3.3.1(b).

3.3.3 A CMSL licensed only to carry out the regulated activities of:

(a) fund management;
(b) real estate investment trust management;
(c) advising on corporate finance;
(d) providing custodial services;
(e) dealing in capital markets products, where the CMSL is a limited-activity CMSL; or
(f) a combination of the regulated activities set out in sub-paragraphs (a) to (e),

shall calculate its total risk requirement in accordance with paragraph 3.3.1(a) only if its average adjusted assets, calculated at the end of each quarter and in accordance with paragraph 3.3.5, do not exceed the lower of –

(i) $10 million; or
(ii) 5 times of its financial resources or adjusted net head office funds, whichever is applicable.

3.3.4 A CMSL licensed only to carry out the regulated activities of:
(a) fund management;
(b) real estate investment trust management;
(c) advising on corporate finance;