When does a fund management company not need to subject its managed assets to independent custody?
According to MAS (FAQs)
last revised 12 October 2021The requirement for independent custody of managed assets would not apply if the managed assets are not listed for quotation or quoted on an approved exchange, and are interests in a closed-end fund where the closed end fund is to be used for private equity or venture capital investments; and is offered only to accredited or institutional investors, as set out in Regulation 13B(4) of the SF(LCB)R. If the managed assets are not subject to independent custody arrangements, the FMC is required to disclose this fact to the investors and to obtain their acknowledgement. The FMC is also required to provide the investor with an audit report of the assets each year. Notwithstanding this, an FMC that manages private equity and venture capital funds is required to fully comply with client segregation requirements in respect of client moneys.