[Q] Singapore Capital Markets License (CMS License) Introduction and Eligibility Requirements

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◎  [SG] Capital Markets License (CMS License) Application Service

Singapore Capital Markets License (CMS License) Introduction and Eligibility Requirements

Qs：What is CMS License and scope of regulated activities?

Reply：A capital markets licence (CMS licence) is a type of financial services licence granted by the Monetary Authority of Singapore (MAS) for businesses that conduct certain activities regulated under the Securities and Futures Act (SFA). Unless a specific exemption applies, anyone who carries on business in any of the regulated activities without a valid CMS licence will be fined and/or imprisoned on conviction. 

Please refer to MAS website for the above-mentioned regulated activities, which includes finance activities such as Fund management, Real estate investment trust management, Advising on corporate finance, etc. Of which, there are 3 types of fund management licences including Licensed Fund Management Company (LFMC), Registered Fund Management Company (RFMC), Venture Capital Fund Manager (VCFM).

Qs：Eligibility Requirements to Obtain a CMS Licence？

Reply：In deciding whether to grant a CMS licence, MAS will consider the factors like staffing arrangement, financial status, and internal control, etc.. You can refer to MAS website for the eligibility requirements to obtain a CMS licence.  Taking fund management license as an example, the general requirements for obtaining the CMS license are listed as follows:

Staffing Arrangement

- Fitness and propriety of the applicant (the business), its shareholders and directors shall be considered, track record and management expertise of the applicant and its parent company or major shareholders shall be considered.

- Directors: Minimum of 2 directors, with one director resident in Singapore. Nominee director is not recommended.

- The proposed Chief Executive Officer (CEO): The CEO with at least 10 years of relevant experience, and who is resident in Singapore. 

- Representatives: Minimum of 2 full-time Singapore-based individuals each with at least 5 years of relevant experience.

Financial Status

- The Applicant (the business) is able to maintain the minimum base capital requirements as prescribed under the SFA. For example, the base capital requirement for RFMC is S$250,000, and the base capital requirement for LFMC-Retail is S$500,000.

Internal Control

- Strength of internal risk management and compliance systems shall be considered, which includes: procedures of anti money laundering (AML) and countering the financial of terror (CFT), risk framework and privacy policy, etc.

In addition to the above-mentioned general requirements, license applicant also needs to prepare a business model/plan and projections and the associated risks. Meanwhile, it should be noted that the requirements for different types of license under the CMS License are not the same. It is recommended that enterprises and entrepreneurs communicate with EStar colleagues in advance to determine the type of CMS license, so as to facilitate subsequent license application preparation.

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