Understand MAS licensing criteria for fund managers in Singapore: fit-and-proper requirements, AUM definitions, and minimum capital thresholds for LFMCs.

Obtaining a fund management licence from the Monetary Authority of Singapore (MAS) is not a formality. MAS evaluates each applicant against a detailed set of admission criteria before granting a Capital Markets Services (CMS) licence for fund management. For founders, legal counsel, and compliance officers preparing an application, understanding exactly what MAS examines—and why—can be the difference between a first-pass approval and a prolonged review.

This article breaks down the three pillars at the centre of every MAS licensing assessment: the fit-and-proper criteria that apply to key individuals, the definition and relevance of assets under management (AUM), and the minimum capital requirements that vary by licence type. It also covers the post-August 2024 regulatory landscape following the repeal of the Registered Fund Management Company (RFMC) regime.

The Licensing Framework in Brief

Under the Securities and Futures Act (SFA), any entity carrying on fund management business in Singapore must hold a CMS licence granted by MAS. Since 1 August 2024, the lighter-touch RFMC regime has been repealed, and new applicants must apply directly for a Licensed Fund Management Company (LFMC) status or, if managing only qualifying venture capital funds, apply as a Venture Capital Fund Manager (VCFM) under the simplified CMS track.

There are two main tiers of LFMC:

• A/I LFMC (Accredited/Institutional): Serves accredited and institutional investors only. Carries lighter compliance obligations than the Retail tier.
• Retail LFMC: May also serve retail investors. Subject to materially higher capital and conduct requirements.

MAS takes up to six months to review complete applications from applicants that meet all admission criteria. Incomplete submissions or weaker credentials extend this timeline considerably.

For a broader view of how Singapore fits into a regional licensing strategy, GSS Legal’s jurisdiction advisory covers the relative merits of Singapore, Labuan, and other Asia-Pacific frameworks for fund managers and other regulated entities.

What Fit-and-Proper Means Under MAS Guidelines

The fit-and-proper assessment is governed by MAS Guideline FSG-G01 (last revised May 2025). Under these guidelines, MAS expects every relevant person to be competent, honest, to have integrity, and to be of sound financial standing. The assessment exists to give MAS confidence that the people responsible for regulated activities will act efficiently, honestly, and fairly in the interests of investors.

Importantly, the onus sits with the applicant. It is not for MAS to disprove fitness—it is for the applicant to establish it. This shifts significant preparation responsibility onto the FMC and its principals.

MAS assesses fit-and-proper status across three distinct criteria:

Honesty, Integrity and Reputation

MAS looks at whether the individual has a clean regulatory and criminal history across all jurisdictions, not just Singapore. Relevant indicators include:

• No criminal convictions related to fraud, dishonesty, or financial crime
• No prior regulatory sanctions, prohibition orders, or disciplinary actions
• No record of false or misleading statements in prior regulatory applications
• No association with entities that faced regulatory censure due to the individual’s conduct
• Transparent and consistent dealings with regulators and stakeholders

A single unresolved adverse finding does not automatically disqualify a person. MAS considers the totality of circumstances, though repeated or serious conduct issues will weigh heavily in any assessment.

Competence and Capability

Competence is assessed through formal qualifications, professional certifications, and demonstrable track records in investment management. MAS evaluates whether the depth and recency of experience is appropriate to the role the individual will hold. Under guidelines updated in September 2025, MAS has clarified that all executive directors must possess appropriate managerial and relevant experience for their specific responsibilities—not just one designated executive director.

Two additional points carry practical weight:

• Experience gained at unregulated entities requires additional substantiation by the FMC.
• Experience from multiple short stints, or experience accumulated more than ten years ago, may not be considered sufficient for the purposes of the relevant experience count.

This means that a CV showing varied but brief engagements, or one anchored in experience from the early 2010s, may not satisfy MAS’s competency bar even if the total years are nominally sufficient.

Financial Soundness

Financial soundness applies both to the corporate entity and to key individuals. For individuals, MAS examines personal financial position, history of bankruptcy or insolvency, and any civil proceedings related to unpaid debts. A person who cannot demonstrate sound financial standing in their personal capacity may struggle to satisfy MAS that they can responsibly manage investor assets.

The failure to meet any one of the three criteria does not automatically trigger a refusal. MAS considers the full picture. However, material deficiencies in any area are grounds for rejection, and MAS may impose licence conditions or seek additional assurances before approving an application.

Who Must Satisfy the Fit-and-Proper Test

The fit-and-proper requirement applies continuously—not just at the point of initial application. Every director, substantial shareholder, chief executive, and MAS-approved representative must satisfy the criteria throughout their tenure at the licensed entity.

For fund management companies specifically, MAS requires fit-and-proper compliance from:

• All directors (executive and non-executive)
• The Chief Executive Officer (CEO)
• Substantial shareholders holding 20% or more of voting power or issued shares
• Key officers with decision-making authority over regulated activities
• Appointed representatives carrying out fund management activities

LFMCs are also required to obtain prior approval from MAS before any shareholder change results in a person holding more than 20% voting power. This means that investor-level changes at the FMC entity itself—not just changes in the managed fund—trigger a regulatory notification obligation.

Minimum Staffing and Competency Requirements

Beyond personal fit-and-proper assessments, MAS sets explicit staffing thresholds that vary by licence type. The table below summarises the key requirements:

MAS also introduced a shareholder anchoring requirement for boutique FMCs not backed by established business groups. In those cases, the CEO and executive directors are expected collectively to hold and maintain a controlling stake of over 50% effective voting interest, ensuring that the individuals responsible for running the FMC retain meaningful skin in the game.

CEOs and executive directors are also expected to focus on managing the FMC’s business. MAS may require them to divest outside business interests where those interests create conflicts of interest or reputational risks that cannot be adequately mitigated.

How MAS Defines and Uses AUM

The September 2025 update to the Guidelines on Licensing and Conduct of Business for Fund Management Companies codified a formal definition of AUM for the first time. This matters because AUM reporting is a core ongoing obligation, and the definition determines what an FMC must include in its periodic returns to MAS.

Under the revised guidelines, AUM covers:

• All moneys and assets contracted to or drawn down by the FMC under discretionary management, where the FMC is carrying out fund management
• All moneys and assets contracted to the FMC under non-discretionary management, where the FMC is carrying out fund management
• Moneys and assets contracted to the FMC but sub-contracted to another party for management, whether on a discretionary or non-discretionary basis

FMCs should review their AUM calculation and reporting processes to ensure alignment with this codified definition. Errors in AUM reporting can trigger regulatory scrutiny during MAS’s routine reviews.

On the question of AUM thresholds: the LFMC licence does not carry a hard minimum or maximum AUM requirement. MAS does not prescribe a floor that a new manager must reach before applying, nor a ceiling beyond which a different licence is required. However, the infrastructure, governance, and capital that MAS expects must scale appropriately with the size and complexity of AUM managed. A firm managing SGD 2 billion is expected to have materially stronger controls than one managing SGD 50 million, even if both technically qualify for the same licence tier.

Capital and Financial Resource Requirements

Capital requirements for LFMCs operate on two levels: a static base capital minimum and a dynamic, risk-based financial resources requirement.

Base Capital

The base capital requirements by licence category are:

• A/I LFMC: SGD 250,000
• Retail LFMC (non-CIS): SGD 500,000
• Retail LFMC managing a Collective Investment Scheme (CIS) for retail investors: SGD 1,000,000
• VCFM: No regulatory minimum base capital — the streamlined VCFM regime specifically removed this requirement.

Base capital must be maintained at all times, not just at the point of application. It cannot be drawn down to fund operations or distributions.

Risk-Based Capital Requirement

In addition to base capital, all LFMCs (both A/I and Retail) must maintain financial resources of at least 120% of their total risk requirement at all times. This risk-based capital figure incorporates operational, credit, and market risk components as calculated under MAS Notice SFA 04-N13.

If financial resources fall below the 120% threshold, the LFMC must notify MAS immediately and take remediation steps. This is a standing requirement, not a one-time hurdle. LFMCs submit quarterly financial returns—covering statements of assets and liabilities, financial resources, and risk requirements—within 14 days of each quarter end.

The practical implication is that a firm entering the market with exactly SGD 250,000 in base capital may find itself in a capital breach position as soon as it incurs operational expenses. Applicants should plan for a capital buffer that keeps the firm comfortably above the 120% threshold through the initial operating period before AUM-linked revenue begins to flow.

For firms exploring how capital requirements interact with broader entity structuring, GSS Legal’s corporate formation service covers incorporation, shareholding structuring, and capital planning across Singapore and other key jurisdictions.

Ongoing Obligations After Licensing

Licensing is not a one-time event. MAS expects LFMCs to maintain regulatory standards on a continuous basis after the licence is granted. Key ongoing obligations include:

• Quarterly financial returns: Submit Form 1 (Statement of Assets and Liabilities), Form 2 (Statement of Financial Resources), and related capital adequacy data within 14 days of each quarter end.
• Annual audited accounts: Audited financial statements and an auditor’s report must be submitted each year by a Singapore-registered public accountant.
• AUM reporting: Periodic returns to MAS must reflect AUM in line with the codified definition, covering both discretionary and non-discretionary assets under management.
• Personnel changes: MAS must be notified of CEO or director resignations within 14 days. New representative appointments require prior MAS approval via Form 3A submission.
• Shareholder changes: Any change resulting in a person holding more than 20% voting power requires prior MAS approval.
• AML/CFT compliance: FMCs must maintain AML and CFT controls in line with MAS Notice SFA 04-N02, including customer due diligence, enhanced due diligence for high-risk clients, and transaction monitoring.

For teams building or strengthening their compliance infrastructure, GSS Legal’s AML and compliance advisory supports FMCs and other regulated entities in designing frameworks that meet MAS expectations without over-engineering the process.

Practical Considerations Before You Apply

Several preparation steps consistently distinguish well-structured applications from those that face MAS queries or delays.

Map experience carefully. MAS will scrutinise the recency, continuity, and nature of key personnel’s investment management track records. Experience gained at unregulated entities requires additional documentation. Build a narrative around each CV that connects past roles directly to the proposed activities of the FMC.

Plan capital ahead of time. The gap between base capital minimums and realistic operating requirements is often larger than applicants expect. Factor in personnel costs, office lease, technology, compliance infrastructure, and a capital buffer to absorb the first 12–18 months of operations before external revenue materialises.

Confirm the licence tier before applying. The A/I LFMC and Retail LFMC carry different staffing, capital, and compliance obligations. Applying for a tier that does not match the intended investor base—or upgrading partway through review—creates delays. Align the application to the actual distribution model from the outset.

Address conflicts of interest proactively. MAS expects CEOs and executive directors to identify any outside business interests, and to either resolve or disclose them in the application. Undisclosed conflicts identified during review will delay or jeopardise approval.

Ensure genuine Singapore presence. MAS requires a dedicated, secure office accessible only to the FMC’s own directors and staff. Co-working spaces do not qualify. The CEO and at least one executive director must be Singapore-based and substantively involved in day-to-day operations. Nominee arrangements designed to satisfy headcount requirements without genuine management presence will not meet MAS’s substantive fund management activity requirements.

For firms evaluating Singapore against alternative fund management jurisdictions, or considering multi-jurisdiction structures that combine a Singapore LFMC with an offshore fund vehicle, jurisdiction advisory and forex and FX licensing services provide a structured basis for that comparison.

Summary

MAS applies a consistent three-pillar test to every fund management licence application: the personal integrity and financial soundness of key individuals, the competence and continuity of the management team, and the firm’s ability to maintain adequate capital on an ongoing basis. The repeal of the RFMC regime in August 2024 means that all new applicants now enter through the full LFMC framework, with its associated staffing, capital, and reporting obligations.

Understanding these requirements in advance—rather than discovering gaps mid-application—gives decision-makers a realistic picture of what is needed and allows for structured preparation. MAS licensing approvals are achievable for well-prepared applicants. The regulator’s timeline of up to six months for complete, compliant applications underlines the importance of submitting a submission that is correct from the outset.