MAS Enhanced Regime for Funds Management

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Brett Oliver
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1 MAS Enhanced Regime for Funds Management A new landscape for Fund Management Companies Are you ready? IMAS Lunchtime Series IMAS Lunchtime Series 29 &31 August 2012

2 Agenda Background What does it mean for You? Next steps PwC 2

3 Background PwC 3

4 Background The Wait is Over. When Apr 2010 Sep 2010 Sep 2011 Apr 2012 Aug 2012 What MAS Consultation Paper MAS response to industry feedback Proposed enhancements and draft legislative amendments MAS 2 nd Consultation Paper MAS implements Enhanced Regime PwC 4

5 Background Key highlights Aims to create a level playing field and raises the bar by imposing baseline safeguards for all FMCs. Codifies the duties of the CEO and directors of all FMCs. Clarifies expectations in key areas of operations & business conduct. (e.g. independent custody & valuation, internal audit, RMF, conflicts of interest) Caters for the differing nature, scale and complexity of FMC operations rather than adopting a one size fits all approach (e.g. compliance arrangements, RMF, risk based capital) Comes into operation with immediate effect. PwC 5

6 What does it mean for You? PwC 6

7 What does it mean for You? Where can you find the requirements MAS announcement effective 7 August 2012 Regulations affected: Securities & Futures (Licensing & Conduct of Business) Regulations Securities & Futures (Financial & Margin Requirements) Regulations Notice of Minimum Entry & Examination Requirements Financial Advisers Regulations Guidelines and FAQ PwC 7

8 What does it mean for You? Who is affected? (Almost) everyone Licensed FMC ( LFMC ) Retail Investors Restricted to Accredited Investors Registered FMC ( RFMC ) < 30 qualified investors (of which < 15 funds or LLP); and <$250m AUM. The aggregate number of qualified investors on FM business and the number of accredited investors to which it provides FA services shall not exceed 30 in total. Managing solely in immovable assets & subject to conditions Managing fund that invests solely in immovable assets and where the fund is offered only to accredited and/or institutional investors. PwC 8

provides clarifications on principles to be incorporated in policies and

9 What does it mean for You? What does it mean for CMS Licence Holders? New requirements for a CMS Licence holder are not extensive The enhanced regime provides clarifications on principles to be incorporated in policies and procedures The principles clarified in the MAS Guidelines come into operation immediately. PwC 9

New Examination Requirements for Retail Licensed FMC 3.

10 What does it mean for You? What s new? 1. Risk-based capital & Operational risk requirements 2. New Examination Requirements for Retail Licensed FMC 3. Duties of a CMS License holder are now legislated 4. Compliance resource for FMC managing AUM that exceeds threshold 5. Conditions for exemption from certain business conduct rules PwC 10

11 What does it mean for You? Key Principles in the Enhanced Regime For an existing CMS Licence holder, the requirements technically apply immediately. The additional requirements under the new regime imposed on an existing CMS Licence holder are not extensive. The key requirements are: Control Environment & Governance Key Individuals Competency Internal Audit Risk Management Compliance Function Annual Audit Reporting of AUM Business Conduct Risk Based Capital Disclosure Custodian Conflicts Independent Valuation Outsourcing, AML etc Etc. PwC Etc.

12 Thank you PwC PwC 12

13 This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it PricewaterhouseCoopers LLP. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers LLP which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

Patent Box 29 May 2012

Patent Box 29 May 2012 www.pwc.com Agenda Overview of patent box relief Will the company qualify? - Eligibility If so, what s the size of the prize? - Computation - 3 stage method - Alternative streaming method How to optimise