MAS: Simplified rules for VC managers take effect immediately

This article is more than 12 months old

Simplified rules for managers of venture capital funds, also known as VC managers, aimed at boosting start-ups' access to capital will take effect immediately, the Monetary Authority of Singapore (MAS) said yesterday.

This follows a public consultation on the proposed new rules, which simplify and shorten the authorisation process for VC managers.

These are part of MAS initiatives to boost financing options for small and medium-sized enterprises (SMEs). The moves could also expand the VC presence here, which could both benefit local start-ups and give Singapore a shot at becoming a regional hub for venture capital.

The new rules say VC managers are no longer required to have directors and representatives with at least five years of experience in fund management. They are also not subject to the capital requirements and business conduct rules that apply to other fund managers.

But the MAS noted that in supervising VC managers, it will focus on anti-money laundering safeguards under the Securities and Futures Act. It will also retain regulatory powers to deal with errant VC managers.

The simplified rules take into account the extent of contractual safeguards that are already present in typical contracts negotiated by VC managers' sophisticated investor client base. Under the new rules, a VC manager has to manage funds that meet certain characteristics.

They can invest funds only in business ventures not listed on a securities exchange; invest at least 80 per cent of committed capital in securities directly issued by start-ups no more than 10 years old; and units of the funds are not available for new subscription after the close of fund-raising and can be redeemed only at the end of the fund life. They are offered only to accredited and institutional investors. - THE STRAITS TIMES