My company is an A/I LFMC. Are there situations where we can manage/provide advice to funds offered to retail investors if our licence restricts us from doing so?
According to MAS (FAQs)
last revised on 12 October 2021Notwithstanding the clientele restrictions that are imposed on an A/I LFMC, there are situations where an A/I LFMC is allowed to be involved with retail funds:
Scenario A – An A/I LFMC (Company X) may perform the role of a sub-manager or adviser to another regulated fund manager (Company Y) which meets the definition of an accredited or institutional investor, and is authorized or licensed to manage investment funds for retail investors in the jurisdiction where it operates. Where the fund is to be offered to retail investors in Singapore, Company Y must be licensed by the MAS to manage funds for retail investors in Singapore. In this regard, as part of the admission criteria for a CMS licence, Company Y is required to have a physical presence in Singapore. [...]
Scenario B – An A/I LFMC may also be the investment manager, sub-manager or adviser to a fund which another pension fund or fund-of-funds invests in. This pension fund or fund-of-funds is (a) managed by another fund manager, and (b) has to meet the definition of an accredited or institutional investor itself. There may be underlying retail investors in the pension fund or the fund-of-funds. The manager of the pension fund or the fund-of-funds, and the fund offer may be in Singapore or overseas. [...]
Scenario C – Where an A/I LFMC wishes to manage investment funds which are authorised by a foreign regulator to be offered to retail investors in a foreign jurisdiction, the A/I LFMC can approach MAS to review the clientele restrictions on its licence.
Before requesting MAS for the review, the A/I LFMC should ensure that it has obtained the requisite approval from the foreign regulator who is aware of the A/I LFMC’s clientele restriction in Singapore. In reviewing the request, MAS considers various factors including the ability of the A/I LFMC to adequately serve the needs of its existing accredited and institutional investors. Each case will be considered on its own merits.