By Campfire

Singapore's Move to Ease VC Regulations May Level Playing Field

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According to the consultation papers of Singapore’s monetary authority, the existing VC managers won’t have to follow the same rules such as capital requirements and business conduct, which are apparently followed by the fund managers of the consultations. The new and improvised plan will decrease the paperwork and also reduce the application time to provide a VC license in the city. An email addressed by MAS said it’s “a matter of weeks” which will function just after two and a half months.

This plan has been executed by the top-level government-appointed committee of Singapore to support and improve the annual growth of the city and to increase the average percentage from 2 to 3 percent. Jeffrey Chi, chairman of Singapore Venture and Capital & Private Equity Association said it includes the city lines according to the U.S. rules and regulations.
“The whole notion that MAS is rethinking and putting in place a new regulatory framework for VC management is very encouraging,” said Chi, who is also vice chairman of Vickers Venture Partners in Singapore. “It’s a healthy development for the industry and the startup ecosystem.”


Applicable Experience
On the basis of proposals which are open for public opinions until March 5, say the central bank is not seeking for VC managers including directors and representatives with minimum five years of experience in management of funds. Also, there is no need of VC managers to conduct independent valuation, internal audits, and financial statements.
Singapore-based managing partner described it as an encouraging step at VC firm. He said, “The holding values of startup portfolios are just like mid-term marks”. “Nobody makes any money from these mid-term marks. The only time the values are real is when the companies are wound up or are sold or listed.”
Managing partner of ACP, Sameer Narula said in a statement that these changes have “far-reaching implications” in Singapore.


Anti-Money Dispensation
The Central bank said the other provisions including annual submission of information on funds, utilization of money, and preventing money laundering will be treated as the crucial subjects. And, the past procedures of the above subjects will remain same.
As per the figure mentioned by the Duff and Phelps, a corporate finance adviser Singapore reported a venture investment of $3.5 billion in 2016 which was $ 2.2 billion in 2015.
Chief legal adviser at Reapra Pte, James Bitanga said: “While there is an implicit recognition here that VC investments take on a different risk profile than that of other types of investments, we should wait and see how the government plans to ensure that it can attract and retain quality VC players”.

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