Variable Capital Company (“VCC”) is a new corporate structure for investment funds, whereby several collective investment schemes (open-end or close-end) may be pooled under a single VCC structure. Jointly administered by the Accounting and Corporate Regulatory Authority (ACRA) and the Monetary Authority of Singapore (MAS), the VCC took effect on 14 January 2020 and has gained significant traction among fund managers, with more than 180 VCCs registered with ACRA to date.
On 4 December 2020, MAS released the Guidelines to Notice VCC-N01 on Prevention of Money Laundering and Countering the Financing of Terrorism – Variable Capital Companies (“Guidelines”). This Guidelines sets out MAS’ expectations and clarify on the relationships and responsibilities between the VCC and its eligible financial institutions (“EFI”). The anti-money laundering and countering the financing of terrorism (“AML/CFT”) requirements imposed on the VCC are largely in principle, similar to those of other financial institutions with some unique differences as follows:
Due to the specific purpose for which a VCC is set up, it may not have employees to perform and undertake the relevant AML/CFT obligations. As such, a VCC is required to appoint an EFI for the purposes of conducting the necessary checks and performing the necessary measures in line with the requirements of the Notice VCC-N01 (the “Notice”). The classes of financial institutions deemed to be an EFI are set out in Appendix 2 of the Notice. Though an EFI may be appointed, the VCC’s Board retains ultimate responsibility for the VCC’s compliance with the Notice.
A VCC’s members are also its customers and will be subject to the due diligence requirements as set out in the Notice.
Subject to certain exemptions, a VCC is required to maintain a register of its beneficial owners and nominee directors. Information in the respective registers should be updated no later than 2 business days after the information has been provided to the VCC. The registers are to be kept at the registered office of the VCC or the registered office of the EFI.
Lymon is one of the leading regulatory compliance and risk management service providers based in Singapore. Established since 2013, our dedicated team is equipped with extensive experience to assist fund managers with their compliance and business needs.
To find out more about how we can support you to achieve a successful VCC launch, please reach out to your usual contact at Lymon or our specialist below:
Jovi Gan, Director
+65 6709 4110