Capital Markets Services (CMS) Licence
A company must hold a capital markets services (CMS) licence to conduct activities regulated under the Securities and Futures Act. Individuals representing CMS licensees or exempt financial institutions need to be appointed as representatives.
Who Needs to Apply
If your company wishes to conduct regulated activities under the Securities and Futures Act (SFA), it must hold a CMS licence. Individuals conducting regulated activities on behalf of CMS licensees or exempt CMS entities (such as banks) need to be appointed as representatives.
These regulated activities are:
Dealing in capital markets products
Advising on corporate finance
Fund management
Real estate investment trust management
Product financing
Providing credit rating services
Providing custodial services for securities
Capital markets products include securities, units in a collective investment scheme (CIS), over-the-counter (OTC) derivatives, exchange-traded derivatives and spot foreign exchange for the purposes of leveraged foreign exchange trading.
Companies which may be required to hold a CMS licence include broker-dealers, corporate finance advisers, credit rating agencies, real estate investment trust (REIT) managers, fund managers and securities-based crowdfunding (SCF) operators.
Admission Criteria
When assessing an application for a CMS licence, MAS takes into account factors such as:
Fitness and propriety of the applicant, its shareholders and directors.
Track record and management expertise of the applicant and its parent company or major shareholders.
Ability to meet the minimum financial requirements prescribed under the SFA.
Strength of internal risk management and compliance systems.
Business model/ plans and projections and the associated risks.
Your company will also need to appoint the following individuals:
Minimum of 2 directors, at least one is resident in Singapore.
Chief Executive Officer with least 10 years of relevant experience and is resident in Singapore.
Minimum of 2 full-time Singapore-based individuals for each regulated activity (except REIT management). Such individuals are required to be appointed as representatives under the SFA.
How to Apply for a CMS Licence
If your company is applying for a CMS licence, your company should submit Form 1 under the Securities and Futures (Licensing and Conduct of Business) Regulations (SF(LCB)R). If your company already holds a CMS licence for certain regulated activities and wishes to add another activity to the CMS licence, you should submit Form 5 under the SF(LCB)R.
In addition, if you hire or appoint individuals to conduct a regulated activity under your licence, you have to appoint these individuals as an appointed or provisional representative for that regulated activity.
Processing Time Required
MAS expects to take not more than 4 months to review and process an application if the business model is straightforward, the applicant meets the relevant admission criteria fully, and the application is complete and clear. For more complex cases, or cases where information is assessed to be incomplete or inaccurate, MAS will need a longer time to review the application.
Application Fee
A non-refundable application fee of $1,000 is required. A fee advice and instructions on the amount and manner of payment for the application fee will be e-mailed to your company.
How Bestar can Help
Bestar can help you with obtaining a Capital Markets Services (CMS) Licence in Singapore in a number of ways:
Company incorporation and registration with ACRA: Bestar can help you incorporate your company with the Accounting and Corporate Regulatory Authority (ACRA) and ensure that it meets all the requirements for a CMS Licence application.
Preparation of the CMS Licence application form and supporting documents: The CMS Licence application process is complex and requires a number of supporting documents. Bestar can help you prepare all the necessary documentation, including your business plan, financial statements, and information on your directors and key personnel.
Liaison with the Monetary Authority of Singapore (MAS) throughout the application process: The MAS is the authority responsible for issuing CMS Licences. Bestar can liaise with the MAS on your behalf and ensure that your application is complete and meets all their requirements.
Fulfilment of ongoing regulatory requirements: Once you have been granted a CMS Licence, you will need to comply with a number of ongoing regulatory requirements. Bestar can help you fulfil these requirements, such as filing annual returns and submitting financial statements.
Providing expert advice on compliance with the CMS Licence conditions: The CMS Licence comes with a number of conditions that you must comply with. Bestar can provide you with expert advice on how to meet these conditions and avoid any potential regulatory issues.
Assistance with corporate governance and risk management: Good corporate governance and risk management are essential for any company, but they are especially important for companies that hold a CMS Licence. Bestar can help you put in place effective corporate governance and risk management practices.
Tax planning and advisory services: It is important to ensure that your company complies with all Singapore tax regulations. Bestar can provide you with tax planning and advisory services to help you minimize your tax liability.
Overall, Bestar can provide you with a comprehensive range of services to help you obtain and maintain a CMS Licence in Singapore. We have a team of experienced professionals who can guide you through the process and ensure that you meet all the necessary requirements.
Here are some additional things to keep in mind:
The cost of obtaining a CMS Licence can vary depending on the complexity of your application.
The processing time for a CMS Licence application can also vary, but it is typically around 6 months.
It is important to start planning early when applying for a CMS Licence, as the process can be time-consuming.
Contact Bestar today!
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