Key takeaways

The MAS circular (Circular) covers the following matters:

• Changes to the qualifying and economic conditions for fund incentives for S13O/OA/U funds managed by licensed fund managers, such as the following:
  • The introduction of a minimum Investment Professional (IP) requirement of two IPs for S13O/OA funds.
  • The introduction of a minimum assets under management (AUM) in Designated Investments (DI) requirement (of SGD 5 million for S13O/13OA funds, and SGD 50 million for S13U funds) that needs to be maintained for the life of the fund.
  • The introduction of a tiered local business spending requirement (ranging from SGD 200,000 to SGD 500,000 depending on the AUM in DI of the S13O/OA/U fund as at the end of each financial year (FY)) for S13O/OA/U funds.
  • The inclusion of an option for closed-ended funds to make an irrevocable election for flexibility in the manner in which it meets the revised economic conditions during the fund's limited life.
  • The inclusion of a grace period for existing S13O/U funds to meet the revised conditions from FY 2027.
• A clarification that, for the new S13OA scheme that will take effect from 1 January 2025 for funds established as Singapore limited partnerships, the economic and qualifying conditions would apply at the partnership level.
• A clarification that S13D funds will continue to self-assess whether they qualify for the scheme but, with effect from YA 2028 (FY 2027), the S13D funds must be managed by a Singapore fund management company that employs at least one investment professional.
• While the changes apply mostly to non-SFO managed funds, there are some key changes that apply to both non-SFO and SFO ("single family office") managed funds, such as the following:
  • The removal of the requirement that a S13O fund cannot acquire the investments prior to the commencement date of the S13O incentive.
  • A change in the computation of AUM to refer to "AUM in Designated Investments" instead of computing AUM based on the net asset value (NAV) of the fund.
  • The removal of additional economic criteria for the addition of multiple special purpose vehicles (SPVs)/trading feeders to a S13U Master-SPV/Master-Feeder fund structure.
  • The removal of the condition for S13O/U funds to invest according to the MAS-approved investment strategy.
  • A clarification of the treatment of investments in limited partnerships as DIs.

Click here to read the full alert.

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Enoch Wan, Senior Associate, contributed to this legal update.

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