Regulations for Fund Management Companies
What procedures to take if my FMC wants to cease business?
According to MAS (FAQs),
last revised on 1 March 2022
The FMC should ensure an orderly winding down of its business prior to cessation. This includes but is not limited to: (i) putting in place communication plans to ensure sufficient notice period has been given to its customers, business partners and other relevant stakeholders regarding its cessation; and (ii) discharging all customer obligations and ensuring that customer assets and/or moneys have been accounted for and returned to customers before it ceases.
The FMC should also ensure that all funds and managed accounts managed or advised by the FMC have been (i) transferred to another fund management company; and/or (ii) liquidated and all underlying assets and moneys returned to their beneficial owners or customers.
An LFMC that intends to cease the conduct of regulated activity is required to file a notice of cessation of business – Form 7 of the SF(LCB)R, not later than 14 days after the cessation of its business.
An RFMC that intends to cease the conduct of regulated activity is required to file a notice of cessation of business – Form 24A of the SF(LCB)R, prior to the cessation.
The forms should be accompanied with an auditor’s certification that the FMC has fully discharged all client obligations and liabilities before ceasing its business. Where the FMC is not able to provide an auditor’s certification, it should engage MAS before filing the cessation, and explain its reasons for its inability to secure an auditor’s certification. MAS will not ordinarily allow an FMC to voluntarily cancel its licence or registration status without discharging its obligations fully.
Upon receipt of the forms and the auditor’s certification, MAS will review the submissions to ensure that all customer obligations have been properly discharged or provided for. Upon completion of MAS’ review, MAS will, by email: (a) inform the LFMC of the effective date of the licence cancellation; or (b) acknowledge the RFMC’s cessation of business.
The FMC will be removed from the Financial Institutions Directory on MAS’ website by the next working day following MAS’ email. For the avoidance of doubt, even after the submission of Form 7 / Form 24A, the FMC continues to be subject to all relevant regulatory requirements, including being liable for all licence and MASNET fees1 as applicable, until the receipt of MAS’ email as above.
The FMC’s MASNET account will also be terminated within 7 days of the receipt of MAS’ email as above. Please be reminded to retrieve all MASNET notices prior to the submission of the cessation forms.
1 Annual fees for corporate licences and representatives are charged, so long as the licence remains valid as at 1 January of the calendar year, and are non-refundable.