SINGAPORE (July 17): Singapore’s position as a fund management and wealth management centre was further enhanced this year with the launch of the variable capital company (VCC) structure by the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA).

A VCC is a bespoke corporate structure that is tailored specifically for investment funds and offers fund managers cost savings and operational flexibility. According to MAS, a VCC structure facilitates the issuance and redemption of shares without having to seek shareholders’ approval. It can also be used for both open-ended and closed end investment funds across traditional and alternative strategies. An open-ended fund allows investors to redeem investments at their discretion, while a closed-end fund does not permit investors to do so. Finally, it can be structured as a standalone or umbrella fund with multiple sub-funds.

An umbrella VCC with multiple sub-funds can benefit from economies of scale and cost efficiencies that could be provided by using a single set of service providers and board of directors. This also allows fund managers to enjoy cost economies. Sub-funds may also be wound up independently of each other, ensuring the ring-fencing of assets and liabilities between sub-funds.

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