The Singapore Capital Markets Services (CMS) Licence in 2023
Since 2003, Healy Consultants Group assists our multinational Clients to register funds and other asset management companies across the globe. Singapore is an attractive jurisdiction for financial services because i) its capital and debt markets have an excellent global reputation and ii) the country has a stable and well-developed legal framework and financial infrastructure.
What is a Singapore CMS Licence?
- A Capital Markets Services (CMS) licence is granted by the Monetary Authority of Singapore (MAS);
- Once the licence application is approved, the Singapore entity can legally trade in financial services including i) signing discretionary mandates with customers ii) signing legal contracts and iii) conducting investment activities.
- Examples of companies that may be required to hold the license include broker-dealers, corporate finance advisers, SCF operators, credit rating agencies, and Fund and REIT managers.
Who needs to apply for a CMS Licence?
- Clients dealing in capital markets products.
- Corporate finance advisers
- Fund managers.
- Real estate investment trust (REIT) managers.
- Product financing providers.
- Credit rating services providers.
- Clients providing custodial services for securities.
The CMS licence requirements of the main fund manager company
Regulatory requirement Registered Fund Management Company (RFMC) Licenced Fund Management Company (LFMC) Licenced Fund Management Company (LFMC) - Retail License type Registration License License Who can invest? Qualified investors Qualified investors No restrictions Max assets under Management (AUM) S$250 million No limit No limit Risk-based capital requirements None 120% of operation risk requirement 120% of operation risk requirement Minimum base capital S$250,000 S$250,000 S$500,000 or higher Number of directors Minimum 2 with at least 5 years relevant experience, at least 1 is an executive director and Singapore resident Number of representatives Minimum 2 full-time, Singapore based employees with at least 5 years’ relevant experience Minimum 2 full-time, Singapore based employees with at least 5 years’ relevant experience Minimum 3 full-time, Singapore based employees with at least 5 years’ relevant experience Executive Directorship Chief Executive Officer with at least 10 years’ relevant experience and is resident in Singapore Proof of activities MAS may request proof that the applicant has an established track record of at least five years in the relevant capital markets products that the Company plans to carry out. Professional indemnity insurance Not required, but recommended Not required, but recommended Required Fund administration and custody arrangements Mandatory Compliance function No specific requirements to fulfil compliance function For AUM of minimum S$1 billion, compliance function to be dedicated and independent from front office Compliance function to be dedicated and independent from front office Audit requirements Internal and external audit is mandatory AML and Risk frameworks Mandatory Business Plan Mandatory Economic Substance Must have permanent physical office space in Singapore (Virtual Office not sufficient) Reporting requirements Annual Quarterly and annual Quarterly and annual
Steps for Singapore CMS licence application
- Healy Consultants Group will assist our Client to register a Singapore private limited liability company and open a Singapore multicurrency corporate bank account by following these steps;
- Because the MAS prohibits nominee director appointments for CMS licensed companies, Healy Consultants Group will assist our Client to i) source and recruit two qualified active Singapore resident directors and representatives for your CMS licensed company ii) source a physical office in Singapore and draft a lease agreement and iii) if required, source a qualified AML/CFT officer.
- We assist our Clients to prepare i) employment contracts for all directors, with a description of their duties and functions ii) a business model and strategic plan for the business and iii) an organisation chart;
- Before we submit the licensing application to the MAS, your firm will be required to inject a paid-up capital in accordance with MAS capital requirements to your Singapore corporate bank account.
- Healy Consultants Group will project manage the application process by i) thoroughly researching and planning the CMS license application for our Client ii) devising strategies to minimise total engagement period iii) submitting a high-quality CMS license applcation with MAS iv) collating and supervising the legalisation and attestation and translation of Client documents v) providing weekly detailed engagement status updates to our Client vi) ascertaining the specific accounting, tax, legal and compliance considerations and vii) finding solutions to challenges that occur throughout the engagement.
- Based on our experience, we expect the average licensing timeframe to be 6 months from the submission of a quality licensing application for Clients with a straightforward business model. Complex cases will take longer.
Fees and timelines
- Healy Consultants Group will project manage your fund management business set up from start to finish. Our multi-national Clients’ should budget for total engagement fees of approximately US$34,115;
- Within 9 months and all going well, I expect our Client to can legally conduct business from their Singaporean entity;
- Our standard service package includes i) Singapore company registration ii) company secretary and registered address services iii) Singapore corporate bank account opening iv) sourcing physical office space v) sourcing resident directors and representatives vi) sourcing of a lawyer Firm for preparation of AML/CFT programmes and other required documents and vii) securing CMS license approval from the MAS;
- Additionally, our Firm offers support services including i) accounting and book keeping for your Company ii) drafting of prospectus if your firm plans to issue structured products and iii) assistance to recruit employees.
To advance your engagement with Healy Consultants Group, communicate with us through the contact details below. Thank you.