Singapore – A simplified regulatory regime for managers of venture capital funds
On 20 October 2017, the Monetary Authority of Singapore (MAS) announced the introduction, with immediate effect, of a new regulatory regime for managers of venture capital funds (VC Managers). The features of the regime are outlined in the MAS’ response to feedback on its proposals that were originally set out in a consultation paper dated 15 February 2017.
The new regime significantly reduces the regulatory requirements which apply to VC Managers, expands the scope of venture capital funding available for start-ups, and increases the attractiveness of Singapore as a place of establishment for VC Managers. It marks the latest step in a series of regulatory initiatives designed to facilitate the entry of new businesses into the Singapore financial sector (please see our previous client alerts on the MAS’ regulatory sandbox and the MAS’ consultation on the regulation of robo-advisory services).
This paper outlines the key rationale and features of the new Singapore regime for VC Managers. For comparative purposes, it also outlines key developments in the regulation of VC Managers in the European Union (EU) and United States (US). There are various differences between the VC Manager regimes across these jurisdictions, such as the qualifying criteria for the different regimes. Nonetheless, it is significant that the MAS’ introduction of a lighter-touch regulatory regime for VC Managers brings Singapore broadly in line with the approach taken by other established markets, including the EU and US.