MAS has been busy. From the RFMC phase-out to new VCC governance expectations and tighter AML rules, here is what Singapore fund managers need to act on now.
Singapore's regulatory framework for fund management has shifted a lot recently. Over the past 18 months, MAS has issued new guidance on VCC governance, tightened AML/CFT requirements, announced the phase-out of the RFMC regime, launched a review of liquidity risk management practices, and updated the tax incentive schemes with major changes for closed-end funds. If you are setting up a fund in Singapore right now, you need to understand what has changed, what is coming next, and what it means for your operations.
I track these developments closely as part of my work at Allocator One Asia. This is not an exhaustive regulatory summary. It is a practical guide to the changes that actually affect how fund managers on their first or second vehicle should be thinking about their Singapore operations.
The RFMC regime is being phased out
MAS announced in 2024 that the Registered Fund Management Company regime will be repealed [42]. The RFMC was introduced in 2012 as a lighter alternative for smaller managers: up to SGD 250 million AUM, no more than 30 qualified investors, and fewer regulatory obligations than full licensing [41]. It was a popular entry point for smaller managers.
The rationale for the phase-out is simple: MAS believes that even smaller fund management operations should be subject to proper licensing and oversight. Regulation of alternative asset managers is tightening globally, and Singapore does not want to be seen as maintaining a regime that provides a regulatory gap.
The upshot: if you are planning a new fund launch, do not build your business plan around RFMC status. Existing RFMCs will have a transition period, but new applicants should choose between VCFM and A/I LFMC from the outset. I covered the details of that licensing decision in a separate article.
New VCC governance expectations
On 26 June 2025, MAS issued a circular setting out supervisory expectations for the governance and management of Variable Capital Companies [14]. This matters. The VCC has become the dominant fund structure in Singapore, and MAS is now spelling out how it expects these vehicles to be run.
The circular covers board composition, director qualifications, management oversight, and related governance matters. The specific requirements are proportionate (MAS is not imposing institutional-grade governance on a debut manager's SGD 20 million fund), but the direction of travel is clear. MAS expects VCC boards to have relevant expertise, to exercise genuine oversight rather than rubber-stamping management decisions, and to maintain documentation that demonstrates active governance.
If you are launching a fund, treat VCC governance seriously from the start. Appoint directors who understand the fund's strategy and can contribute to oversight discussions. Keep board minutes that show substantive deliberation. Establish clear reporting lines between the fund manager and the VCC board. Good governance builds investor confidence and protects you if something goes wrong.
Tighter AML/CFT requirements
Revised AML/CFT notices and guidelines took effect on 1 July 2025, with several changes that directly affect fund manager operations [14]:
- Minimum information requirements for customer due diligence have been clarified, reducing ambiguity about what documentation you need to collect during investor onboarding.
- Suspicious transaction reporting timelines have been tightened. MAS now expects reports to be filed no later than five business days after suspicion is established, or one business day for cases involving sanctioned parties [14].
- Screening obligations have been updated to reflect current sanctions regimes and watchlists.
The one-business-day reporting requirement for sanctioned party cases is the sharpest change here. It means your compliance team, or your compliance service provider, needs to be able to identify and escalate potential sanctions hits within hours, not days. For a small team managing a first fund, this requires having the right systems and processes in place from the beginning.
We have updated our onboarding workflows at Allocator One Asia to reflect these changes, and I would recommend any manager review their KYC/AML procedures against the new requirements. The cost of getting this wrong goes beyond a regulatory fine; it is reputational damage that can make future fundraising extremely difficult.
Liquidity risk management review
MAS announced at the Investment Management Association of Singapore conference in April 2025 that it is reviewing the liquidity risk management framework for licensed fund management companies [14]. The review aims to strengthen how Singapore's fund management industry holds up under both normal and stressed market conditions, with a focus on alignment between investment strategies, liquidity profiles, and redemption terms.
This follows similar reviews by the Financial Stability Board and IOSCO, both of which have pushed for stronger liquidity risk management practices globally after stress events in several markets.
For venture capital and private equity managers running closed-end funds, the direct impact may be limited. Your investors committed capital for a fixed term, and the liquidity mismatch issues that concern regulators are mainly tied to open-ended fund structures. But MAS has indicated it will engage the industry before implementing changes, and the review could result in new requirements around liquidity stress testing, contingency planning, or disclosure.
My advice: do not wait for the final rules. Build a sensible liquidity risk management framework into your operations now. For a closed-end fund, that means having a clear capital call schedule, adequate reserves, and documented policies for managing unfunded commitments and distributions. If new rules are introduced, you will be ahead of the curve rather than scrambling to comply.
Simpler LFMC acquisition process
Effective 24 January 2025, proposed acquirers seeking to obtain effective control of Singapore LFMCs no longer need MAS approval before signing sale and purchase agreements [14]. The requirement now is that completion of the transaction remains subject to subsequent regulatory approval, but the commercial agreement can be signed without waiting for the green light.
This is a procedural change, not a substantive relaxation (MAS still reviews all proposed changes of control). But it makes the M&A process more efficient, which matters as Singapore's fund management industry consolidates and more transactions occur between fund management companies.
If you are launching your first fund, this might seem irrelevant today. But if you are building a fund management business with plans to eventually bring in strategic partners, sell a stake, or merge with a larger platform, the smoother transaction process reduces friction. It also affects how you think about your GP structure and shareholder arrangements from the outset.
Tax incentive scheme updates
The 2024 tax incentive changes that took effect on 1 January 2025 are covered in detail in my article on Singapore's tax framework. The highlights that matter from a regulatory perspective:
- Funds no longer need to be newly established to qualify for Section 13O [4].
- The closed-end fund treatment option waives AUM requirements from the sixth year and spending requirements from the eleventh year [4].
- SPV and feeder fund treatment under Section 13U has been simplified [4].
- All incentive schemes have been extended through 31 December 2029 [4].
These are positive developments for smaller fund managers. The extension through 2029 gives you certainty over a full fund lifecycle, and the closed-end fund treatment fixes the structural mismatch between fixed AUM thresholds and the natural capital profile of VC and PE funds.
MAS's retail private market investment fund proposals
MAS has proposed a regulatory framework for retail private market investment funds, which could open up private fund investments to retail investors under specific conditions [15]. This is still in the consultation phase and has not been finalised, but it points toward a broader investor base for private funds in the medium term.
If you are currently limited to accredited and institutional investors under a VCFM or A/I LFMC licence, this is worth watching. If MAS creates a pathway for retail participation in private funds, it could expand the fundraising universe, but it would also bring additional compliance requirements including investor suitability assessments, enhanced disclosure obligations, and potentially different fee structures. It is too early to change your plans based on this, but I would keep an eye on MAS's consultation timeline.
What I am watching next
A few developments ahead will affect Singapore fund managers over the next 12-24 months:
- The RFMC transition timeline: MAS has announced the phase-out but has not published detailed transition arrangements for existing RFMCs. Clarity here will affect managers currently operating under the regime.
- Liquidity risk management outcomes: The results of MAS's review could introduce new requirements that affect fund operations and reporting.
- Cross-border regulatory cooperation: Singapore's fund management industry is increasingly integrated with regional markets. Regulatory coordination with Hong Kong, Australia, and other Asian jurisdictions could create new opportunities, or new obligations, for managers operating across borders.
- ESG and sustainability reporting: MAS has been gradually increasing expectations around sustainability-related disclosures for financial institutions. Fund managers should expect these expectations to extend further into the private fund space.
How Allocator One Asia and Infra One keep you compliant
Regulatory change is constant, and for a small GP team trying to deploy capital, tracking every MAS circular and consultation paper is not a realistic use of time. That is where we come in. At Allocator One Asia, we monitor regulatory developments that affect our clients and update compliance frameworks accordingly. Infra One's operational platform builds regulatory requirements into the workflow, from AML screening timelines to reporting deadlines, so compliance happens as part of normal operations rather than as a separate exercise.
If you are setting up a fund in Singapore and want to make sure your compliance architecture reflects the latest requirements, talk to us.
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