Imagine stepping into a realm where the heartbeat of innovation resonates around every corner. Yes, we are talking about the dazzling world of venture capital in Singapore, a nucleus of forward-thinking ideas and thriving entrepreneurial spirits. The Monetary Authority of Singapore (MAS) has meticulously crafted a regulatory framework to nurture and grow the venture capital ecosystem here.
In this article, we will provide certain insights on Venture Capital Fund Manager (VCFM) license in steering and operating venture capital funds in Singapore.
What is the VCFM License
VCFM license is a fund management license launched by MAS to catalyst the Venture Capital Investment environment in Singapore around 2017. While VCFMs enjoy a bit more flexibility compared to their counterparts in licensed fund management companies (LFMCs), focusing mainly on unlisted assets, there are still key rules and regulations that are required to be adhered to.
Below are some of the specific guidelines:
Having a solid team with at least two directors at the helm
Having at least two investment professionals based in Singapore
Having in place a robust structure and system for risk management and regulatory compliance including AML/KYC policies and procedures
The key mandate for each fund managed by the VCFM is the 80/20 ratio. This mandate requires that at least 80% of the funds committed capital is invested directly into fresh, unlisted business ventures not older than a decade since inception. The remaining slice of the pie? Well, that can be channeled into ventures that are a bit more mature or other asset avenues such as secondary purchases.
Navigating the Application Waters
Let’s shed some light on the application process. It's all about demonstrating financial stability, a skilled team, and a sound strategy for risk management. It's a bit of a journey involving paperwork and meeting MAS guidelines. We will share more insights in our next article.
At Prestige, we work alongside fund managers looking to obtain a VCFM license to navigate through the intricacies of the VCFM license application process with MAS. It includes walking through the regulatory landscape, ensuring adherence to all prerequisites required, and setting a firm foundation from day one of their operations.
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