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The fact that it’s domiciled in Singapore obviously comes with advantages as well because if your manager is located here, your investment professionals are on the ground, it lends very well to substance arguments. The flexibility of the VCC is a huge advantage. “It captures many ways of doing things right. Jek Aun Long, Funds Partner at the Singapore office of Simmons & Simmons JWS says: Furthermore, it is an FATF (Financial Action Task Force) compliant country which supports marketing our funds in the other regions.”Īside from the open-ended fund structure, the VCC can also be a close-ended fund, an umbrella fund, a standalone fund, a master fund, or a feeder fund. Singapore has a high regulatory reputation essential to a financial centre. “The VCC structure facilitates dividend payments as well as the return of capital to investors. With the launch of the VCC, Singapore became comparable with other jurisdictions in terms of setting up open-ended fund structures, adding to the city state’s reputation as a financial centre. Manish Khandelwal, director of business development & products at UTI says : “When we set up our fund management company in Singapore in 2007, we found out that the open-ended company type structures were not available in Singapore that we had to move to other jurisdictions to set up our funds,” UTI was one of the 18 fund managers who participated in the MAS pilot programme. Competitive advantages of the VCCįirst, the VCC structure has proved flexible when meeting the different requirements of fund managers who need to establish open-ended fund structures in Singapore.
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But we do recognise that it is a continued work in progress to enhance the framework to tailor to the needs of fund managers and investors,”įumin Feng, deputy director of the financial markets development department at the MAS, said during the webinar.
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“The VCC framework is a good starting point for Singapore-based fund managers to structure their funds. While fund managers and asset service providers who participated in the VCC pilot programme initiated by the MAS all agreed that the launch of the VCC was a success, there was also a consensus that enhancements are needed to prepare for future opportunities and challenges to this onshore fund structure.
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“In line with Singapore’s objective to become a fund domicile hub, the establishment of the VCC is designed to fill a gap by offering regional and global fund managers a greater choice of investment fund vehicles when they choose to structure and domicile their funds in Singapore.”Īs of mid-August 2020, only seven months after the launch of the VCC structure, a milestone of 100 VCC funds have been incorporated with the corporate registrar, demonstrating diverse use cases across traditional, alternative and wealth management strategies. The webinar moderator Elaine Tan, Head of Fund Services Products and Solutions, Asia Pacific, for BNP Paribas Securities Services explained
#Slate vcc 2.0 plus
This was just one of the topics covered during The Asset Events Plus Webinar “VCC 2.0” held on 16th July this year. Still, the launch of the Variable Capital Company (VCC) structure by the Monetary Authority of Singapore (MAS) in January 2020 was quite timely.Īlthough Singapore has built itself over the years as a leading Pan-Asian asset management hub with SGD 3.4 trillion (USD 2 trillion) in assets under management and a diverse base of more than 900 traditional and alternative fund managers, the next phase of growth is to expand the city’s fund value chain to become a fund domicile hub. Regulators and the local funds industry are not resting on their laurels, and are moving forward with VCC 2.0 to strengthen the structure and meet future opportunities and challenges.ĮVEN before the onset of Covid-19, the need for more structuring options for investment funds was already evident as investors’ requirements have become increasingly complex and sophisticated. With the launch of the Variable Capital Company (VCC) structure, Singapore is expanding its capability as a centre for funds domiciliation in Asia.