Singapore vs. Hong Kong: A Comparative Overview of Fund Management Regulations

Overview

In the aftermath of the global financial crisis, both Singapore and Hong Kong—Asia’s leading international financial centers—have taken significant strides to enhance their regulatory frameworks for fund management. Their objective: streamline compliance, raise professional standards, and build trust among global investors without stifling innovation or operational efficiency.

Fund Management Regulation Landscape

Hong Kong

Since the implementation of the Securities and Futures Ordinance (SFO) in 2003, the Securities and Futures Commission (SFC) has taken a more proactive role in regulating fund managers. One of the most notable initiatives is the Manager-in-Charge (MIC) regime, which enhances individual accountability at senior levels within licensed firms and promotes clearer oversight responsibilities.

Singapore

Singapore’s Monetary Authority of Singapore (MAS) has also revamped its regime. In 2012, the MAS introduced the Registered Fund Management Company (RFMC) regime to replace the loosely regulated "Exempt Fund Manager" structure. This transition drove smaller firms to either adapt, consolidate, or exit the market. A recent proposal on Individual Accountability and Conduct Guidelines further mirrors Hong Kong’s MIC initiative, reflecting a regional trend toward leadership accountability in financial institutions.

Fund Management Licensing Structures

Singapore

Fund Management Companies (FMCs) can operate as either:

• Registered Fund Management Companies (RFMCs) – for firms managing assets for no more than 30 qualified investors

• Licensed Fund Management Companies (LFMCs) – categorized into:

  • Accredited/Institutional Investors (A/I LFMCs)

  • Retail LFMCs

    
    

Hong Kong

FMCs must obtain a Type 9 (Asset Management) license from the SFC. Unlike Singapore, Hong Kong does notdifferentiate between investor classes at the licensing level. However, capital and personnel requirements vary depending on whether the firm serves institutional or retail clients, and whether it holds client assets directly.

Key Regulatory Differences

1. Base Capital Requirements

Capital requirements are meant to ensure FMCs have sufficient financial backing to operate responsibly.

• Singapore:

  • RFMCs & A/I LFMCs: Minimum capital of S$250,000

  • Retail LFMCs:

    • S$500,000 (if not managing collective investment schemes)

    • S$1 million (if managing retail CIS)

• Hong Kong:

  • Basic Type 9 License: Minimum capital of HK$120,000

  • If holding client assets: Must maintain at least HK$5 million in paid-up capital(most FMCs outsource custody to avoid this)

  • Retail FMCs: Currently HK$1 million, with proposals to raise this to HK$10 million

2. Personnel & Competency Requirements

• Singapore:

  • RFMCs and A/I LFMCs require 2 Directors, including 1 Executive Director with 5+ years of relevant experience

  • At least 2 representatives must conduct regulated activities (can also be the Directors)

  • Retail LFMCs need 3 Directors, with the CEO possessing 10+ years’ experience, including retail experience

• Hong Kong:

  • 2 Responsible Officers (ROs) required, including at least 1 Executive RO

  • ROs must have 3 years of relevant experience within the last 6 years

  • Retail fund managers need 2 key personnel (often the ROs) with 5+ years’ experience in managing public funds

3. Use of Custodians

• Singapore mandates third-party custodians to hold client assets, reinforcing transparency and segregation of funds.

• Hong Kong allows FMCs to self-custody, but imposes higher capital requirements if they choose to do so—encouraging the use of prime brokers or independent custodians.

4. Senior Management Accountability

• Hong Kong’s MIC regime assigns clear responsibility for key functions (compliance, finance, operations, etc.) to named individuals, strengthening governance and oversight.

• Singapore already emphasizes individual accountability, but aims to codify this further with proposed Individual Accountability & Conduct Guidelines, designed to instill a culture of ethical leadership and proactive risk management.

Application Process, Costs & Timelines

Application Process

• Singapore: Applications for RFMCs and LFMCs are filed via the MAS Corporate e-Lodgement Portal

• Hong Kong: Applications are submitted through the SFC Online Portal or via hard copy

Costs

• Singapore:

  • RFMC: No application fee; annual fee: S$1,000

  • LFMC: Application fee: S$1,000 + S$200 per representative; annual fee: S$4,000

• Hong Kong:

  • Application and annual fees vary by activity and number of licensed individuals

  • For a small FMC with 2 ROs and 1 representative, expect around HK$16,010 in combined annual fees

Timelines

• Singapore: MAS typically processes applications in 4 months, with faster outcomes possible for strong submissions

• Hong Kong: SFC’s stated review period is 15 weeks, but 20 weeks is more realistic in practice

Conclusion

Both Singapore and Hong Kong offer robust, transparent, and investor-friendly regulatory environments for fund management firms. Each jurisdiction offers unique advantages depending on your firm’s investor base, operational model, and long-term goals.