VCC Anti-Financial Crime Rules: Key Points for Fund Managers

As part of the ongoing fight against the illicit flow of funds across borders, recent regulatory revisions from the Monetary Authority of Singapore (“MAS”) have put proliferation financing (“PF”) in the spotlight.  Here’s what financial institutions and fund managers need to know about the latest updates and how they promote good governance in the city-state.

Singapore prides itself as a jurisdiction with a strong regulatory and compliance framework, including a solid framework on anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”); known collectively as “Financial Crime”, which includes AML, CFT and countering proliferation financing.  The MAS recently updated this framework with regards to financial institutions (“FIs”) and variable capital companies (“VCCs”), specifically in light of proliferation financing (“PF”) assessments.

Regulatory enforcement guidelines will help further to strengthen international confidence in the VCC structure –and by extension, Singapore as an investment destination that promotes good governance best practices.

What are the latest updates to the Singapore Financial Crime regulations and how do they pertain to financial institutions and VCCs?

The VCC structure, launched in January 2020, was designed to be a driver of international capital to the city-state as a domicile and offers several advantages to traditional and alternative fund managers alike, including compatibility with open-ended strategies and with appropriate structuring, closed-ended strategies, as well as the option for an umbrella fund with sub-funds.

Effective 1 July 2025, the MAS outlined key requirements on compliance reporting for FIs and funds using the VCC structure, a structure that offers flexibility in share issuance and redemption, as well as dividend payments.

The recent regulatory updates from the MAS refine and outline Financial Crime rules and reporting obligations.  These clarifications include:

• certain customer due diligence measures (“CDD”), such as registers of beneficial owners and of nominee directors;
• that information on beneficial owners, including their identities and addresses, must be obtained promptly. In certain cases, and subject to MAS guidance, a business address may be accepted in place of a residential address for beneficial ownership records;
• the identity of the beneficial owner should be independently verified. Where the beneficial owner is not a natural person, there should be independent verification of the legal entity or legal arrangement (such as a trust) that is identified as the beneficial owner;
• that proliferation financing is addressed within the same regulatory framework as money laundering and terrorism financing, and that PF risks must be assessed and managed alongside money laundering and terrorism financing risks; and
• That FIs and VCCs implement assessments for money laundering and terrorism financing risk, which in turn includes assessing for PF risk.

According to MAS guidance, assessments for PF risks should be conducted promptly, if not already in place.  These assessments may be carried out as part of the broader Financial Crime risk assessment process or as separate, standalone evaluations.

How the Maples Group can help with Singapore regulatory compliance

The MAS’s recent regulatory clarification with regards to AML and CFT efforts are indicative of both its commitment to establishing Singapore as an investment jurisdiction and one that adheres to the highest standards of transparency.

Whether setting up in a new market or maintaining an existing fund, it is essential to work with a proven global partner such as the Maples Group.  Our expertise spans jurisdictions and our teams have strong working relationships with regulatory bodies in key investment domiciles such as the MAS, Cayman Islands Monetary Authority (“CIMA”) and Hong Kong’s Securities and Futures Commission (“SFC”).

In addition to our wellspring of cross-jurisdictional regulatory and compliance expertise, the Maples Group provides a suite of client services spanning fund administration, middle- and back office, fiduciary, and regulatory and compliance and legal services.  Our local teams are backed by an extensive global network of colleagues, which allows us to service clients across time zones and jurisdictions and in their local language.  Drawing from our history of client excellence, we have the flexibility and creativity to develop client solutions as regulation advances, investment strategies change, funds grow and regulatory reporting evolves.

For legal and regulatory disclosures, please visit maples.com/legal-notices