Singapore has witnessed tremendous growth in the financial services sector over the years, with the Monetary Authority of Singapore (MAS) playing a crucial role in regulating and supervising the sector. The MAS is responsible for issuing licenses to the various financial institutions operating in Singapore. One such license is the Capital Markets Services (CMS) license, which authorizes financial institutions to carry out regulated activities. In this article, we will discuss the MAS license, its eligibility criteria, application process, costs involved, maintenance, and renewal.

Types of CMS Licenses under MAS

The CMS license is categorized into two types: a full CMS license and a temporary CMS license. The full CMS license authorizes financial institutions to carry out regulated activities on a permanent basis, while the temporary CMS license authorizes financial institutions to carry out regulated activities for a limited period. The full CMS license is further categorized into six types, namely:

1. Dealing in Securities: This type of license authorizes financial institutions to deal in securities, such as shares, debentures, and bonds.
2. Fund Management: This type of license authorizes financial institutions to manage funds for their clients.
3. Real Estate Investment Trust Management: This type of license authorizes financial institutions to manage real estate investment trusts (REITs).
4. Providing Custodial Services: This type of license authorizes financial institutions to provide custodial services for securities and other financial assets.
5. Advising on Corporate Finance: This type of license authorizes financial institutions to provide advice on corporate finance.
6. Securities Financing: This type of license authorizes financial institutions to provide securities financing services, such as securities lending and borrowing.

Type of fund manager	Retail LFMC	Accredited/Institutional LFMC (A/I LFMC)	VCFM	RFMC
Financial requirements More details on the base capital and other financial requirements can be found in the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations (SF(FMR)R) . The base capital requirements are set out in the First Schedule to the SF(FMR)R . Details of the financial resources requirement are found in the Notice SFA 04-N13 Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licences.	– Minimum base capital of S$500,000 or higher – Required to maintain financial resources which are in excess of its total risk requirements	– Minimum base capital of S$250,000 – Required to maintain financial resources which are in excess of its total risk requirements	Minimum base capital of S$0	Minimum base capital of S$250,000
Staffing requirements	– Minimum of 3 full-time Singapore-based employees each with at least 5 years of relevant experience – Proposed CEO must have at least 10 years of relevant experience – Independent and dedicated compliance function in Singapore required	-Minimum of 2 full-time Singapore-based employees each with at least 5 years of relevant experience -Independent and dedicated compliance function in Singapore required if AUM is at least S$1 billion	Minimum of 2 full-time Singapore-based employees	Minimum of 2 full-time Singapore-based employees each with at least 5 years of relevant experience
Annual corporate fee In addition to the annual corporate fee for the licence or registration status, there will also be annual fees for representatives appointed by an LFMC. Details can be found in Appointing a Representative for CMS Licensees or Exempt Financial Institutions.	-Fixed fee of S$4,000 -Variable fee calculated at S$5 per representative from the 101st representative onwards as at 1st January of the calendar year	-Fixed fee of S$4,000 -Variable fee calculated at S$5 per representative from the 101st representative onwards as at 1st January of the calendar year	S$4,000	S$1,000

Eligibility Criteria for Obtaining an MAS License

To obtain an MAS license, financial institutions must meet certain eligibility criteria. These criteria include:

1. Legal Structure: The financial institution must have a legal structure that is recognized under Singapore law.
2. Track Record: The financial institution must have a track record of good financial standing and conduct.
3. Fit and Proper Criteria: The directors, officers, and key executives of the financial institution must meet the fit and proper criteria set out by the MAS.
4. Compliance Arrangements: The financial institution must have adequate compliance arrangements in place to ensure compliance with the relevant laws and regulations.
5. Internal Policies and Procedures: The financial institution must have internal policies and procedures that are consistent with the relevant laws and regulations.

The Application Process for an MAS License

The application process for an MAS license involves several steps, including:

1. Pre-application Consultation: Financial institutions are advised to seek pre-application consultation with the MAS to ensure that they meet the eligibility criteria and to clarify any doubts or queries.
2. Submission of Application: Financial institutions must submit their application for an MAS license through the MAS’ online application system.
3. Assessment of Application: The MAS will assess the application and may request additional information or clarification.
4. Approval or Rejection: The MAS will either approve or reject the application based on its assessment. Approvals m ay take up to 6 months.

Type of fund manager	Retail LFMC or A/I LFMC	VCFM	RFMC
Applying for licensing or registration If your company is making an application, submit the relevant form for that type of fund manager online through the Corporate e-Lodgment System (CeL). For information on CeL, please refer to the CeL user guide. To access the forms, you will need Adobe Acrobat Reader version 9.4.4 or above.	Form 1A (Application for a capital markets services (CMS) license to provide fund management) There is a non-refundable application fee of S$1,000. Upon submission of the application via CeL, you will receive instructions on the amount of application fees payable on the acknowledgement page.	Form 1V (Application for a CMS licence as a Venture Capital Fund Manager) There is a non-refundable application fee of S$1,000. Upon submission of the application via CeL, you will receive instructions on the amount of application fees payable on the acknowledgement page.	Form 22A (Notice of Commencement of Business as a Registered Fund Management Company)
Appointing representatives If you hire or appoint individuals to conduct a regulated activity under your licence, you have to appoint these individuals as your representatives for that regulated activity.	Submit appointment forms for your representatives. Refer to the page Appointing a Representative for CMS Licensees or Exempt Financial Institutions for more information.	Identify your representatives. A separate form is not required.	Indicate your representatives within the Form 22A.
Applying to conduct additional regulated activity If your company also intends to deal in capital markets products (e.g. equities, fixed income and derivatives) for your related companies, you will need to apply to add this activity.	If you are applying to be an LFMC, select the applicable option(s) in section 1 of Form 1A. If you are an existing LFMC, submit Form 5 to your MAS officer-in-charge. There is a non-refundable application fee of S$500 payable via GIRO. You will also have to appoint individuals who conduct the additional dealing activity as your representatives. Your company and the dealing representatives will have to comply with relevant capital and conduct requirements applicable to this activity under the SFA .	Not Applicable	Not Applicable

Costs Involved in Obtaining an MAS License

Financial institutions must pay various costs to obtain an MAS license, including:

1. Application Fee: Financial institutions must pay an application fee, which varies depending on the type of license applied for.
2. Annual Fee: Financial institutions must pay an annual fee to maintain their MAS license, which varies depending on the type of license held.
3. Other Costs: Financial institutions may incur additional costs, such as legal fees, during the application process.

Maintenance and Renewal of an MAS License

Financial institutions must comply with the ongoing obligations set out by the MAS to maintain their MAS license. These obligations include:

1. Reporting Requirements: Financial institutions must submit regular reports to the MAS to ensure ongoing compliance with the relevant laws and regulations.
2. Compliance Arrangements: Financial institutions must maintain adequate compliance arrangements to ensure ongoing compliance with the relevant laws and regulations.
3. Renewal of License: Financial institutions must renew their MAS license annually and pay the annual fee to maintain their license.

In conclusion, the MAS license is a game-changer for capital markets services in Singapore. Financial institutions that obtain an MAS license can benefit from its global recognition, broad coverage, and stringent standards. However, financial institutions must meet the eligibility criteria, comply with the ongoing obligations, and pay the costs involved to obtain and maintain an MAS license.