Monetary Authority of Singapore Relaxes Timing of Prior Approval Requirement for Acquirers of Licensed Fund Managers

Proposed acquirers seeking to obtain effective control of Singapore licensed fund managers are no longer required to obtain approval from the Monetary Authority of Singapore (MAS) prior to signing the sale and purchase agreement (SPA) for the transaction; instead, they may proceed to enter into the SPA as long as completion of the acquisition is subject to MAS approval of the effective controllers being obtained.

On January 24, 2025, certain provisions of the Financial Institutions (Miscellaneous Amendments) Act 2024 (FI Amendment Act) came into effect in Singapore.

One of the amendments introduced by the FI Amendment Act relaxes the timing of the change-in-control approval requirement under Section 97A of the Securities and Futures Act 2001 (SFA), which applies to any person seeking to obtain effective control of a Singapore institution holding a capital markets services license (CMSL holder), including Singapore licensed fund managers.

Previously, Section 97A of the SFA required a proposed controller to seek approval of the Monetary Authority of Singapore (MAS) prior to entering into any “arrangement” by virtue of which the person would obtain effective control of a CMSL holder. An “arrangement” may be deemed to have been entered into so long as there is an element of understanding with the proposed controller to acquire shares in the CMSL holder, and this may exist at the early stages of a negotiation. In practice, potential acquirers sought MAS approval before executing the sale and purchase agreement for the transaction, notwithstanding that the agreement contained a condition that the transaction would not complete until the relevant regulatory approvals have been obtained.

The timing for the MAS approval requirement under Section 97A has been relaxed with effect from January 24, 2025, such that potential acquirers are now required to obtain MAS’s approval only before taking effective control of a CMSL holder. This means that a potential acquirer may enter into a conditional sale and purchase agreement without having to first obtain MAS’s approval, as long as completion of the acquisition is subject to MAS’s approval of the effective controllers being obtained.

Alongside this change, MAS has issued a revised application form to be used for seeking MAS approval. The form contains new guidance from MAS on how a person will be deemed to have effective control over a CMSL holder.