Friday, February 6, 2015

Amended Rules on Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licenses

In July 2013, the Monetary Authority of Singapore introduced a new regime regarding capital requirements for Capital Markets Services licence holders. 

Independent Asset Managers (‘IAM’) that are Licensed Fund Management Companies (‘LFMC’) must in general maintain:
  • A Base Capital of SGD 250,000; and
  •  Financial Resources exceeding 120% of their Total Risk Requirement.          
The Financial Resources are basically the available shareholders’ equity. In most cases, the Total Risk Requirement amounts to:
  • SGD 100,000 for IAMs with an Annual Gross Income of SGD 2 million or below; or
  • 5% of the IAM’s Annual Gross Income up to SGD 10 million plus 2% of its Annual Gross Income above SGD 10 million.