Introduction of VCC structure for smaller size of Family Office (i.e FUM less than 30 million)

The VCC, or Variable Capital Company, is a new corporate structure in Singapore designed specifically for investment funds. Think of it as a specialized container for holding investment capital. What makes it unique is its ability to easily change its size by issuing or buying back shares, allowing it to adapt to the amount of capital it manages. This flexibility makes it highly appealing to investment managers. Furthermore, it can be established for a single fund or as an umbrella fund with multiple sub-funds, offering simplicity and versatility. Singapore introduced the VCC to attract more investment business and position itself as a top destination for fund management in Asia.

In Singapore, the Monetary Authority of Singapore (MAS) has recognized the unique nature and growing importance of family offices. To facilitate their operations and streamline regulatory processes, MAS provides certain regulatory exemptions for single-family offices under the Securities and Futures Act (SFA). These exemptions are commonly known as the 13O and 13U exemptions.

13O Exemption: It pertains to family offices that serve a single family and allows them to be exempted from holding a capital markets services license for the provision of fund management services to related corporations. To qualify, the single-family office must cater to persons related within the meaning of the Companies Act or have been so related if deceased.

13U Exemption: This exemption is for family offices that provide services to a single family and meet the definition of a related corporation. Under the 13U exemption, the family office is exempted from the requirement to be registered as a fund management company.

Both of these exemptions acknowledge the uniqueness of family offices and their differences from typical fund management companies. By providing these exemptions, Singapore aims to position itself as a leading family office hub in Asia and create a regulatory environment conducive to effective wealth management.