The Variable Capital Company (VCC): What You Need to Know

-

A different type of corporate vehicle called a Variable Capital Company (VCC) will shortly be made available for Collective Investment Schemes (CIS). Currently, the corporation, limited partnership, and unit trust structures are the organizational forms available to CIS. The VCC is suitable for both closed-ended and open-ended classic and alternative fund strategies. Shares are produced when investments are made and are easily redeemable by the shareholders since they are a corporate vehicle with flexible capital. 


 

What are the features of Variable Capital Companies Singapore (VCC)

 

Due to its distinctive features that will give fund managers in Singapore operational flexibility, the innovative suggested structure has attracted a lot of attention from the fund management sector. Key characteristics of a VCC Singapore include the following:

 

The Variable Capital Companies Act (the Act) will control it. 

 

The Monetary Authority of Singapore (MAS) will be responsible for monitoring its requirements related to anti-money laundering and combatting the funding of terrorism. The Accounting and Corporate Regulatory Authority is the regulatory authority for the establishment and administrative reasons. The sale of shares in a VCC and all other matters relating to the VCC as a fund shall be governed by the Securities and Futures Act.

 

  • VCC can be utilized by restricted class investors as well as regular investors for both conventional and alternative funds.

 

  • It may be utilized as a stand-alone fund or as an umbrella organization holding several sub-funds with various investment goals, investors, and assets and liabilities.

 

  • Unlike corporations, shares are redeemable without the consent of the shareholders, and dividend payments are made from the capital.

 

  • To assure substance and prevent the vehicle from being used for illegal purposes, it must choose a fund management company ("FMC") that is regulated or registered by MAS, or that is an exempt financial institution in Singapore.

 

  • A Singapore registered office, a Singapore resident company secretary, auditor, and at least one resident director are required to provide evidence of substance. It also needs to keep an up-to-date register of shareholders and provide the details to regulatory and law enforcement authorities upon request.

 

  • VCCs made available to regulated investors (such as accredited investors) may employ a variety of legally mandated, generally recognized accounting principles, such as US GAAP, ASC Standard, or IFRS.



What are the Benefits of Variable Capital Companies (VCCs) Offer?

 

For the issuance and redemption of shares, there is no requirement for solvency tests or corporate resolutions. Elimination of these restrictions guarantees smooth capital transfer. Through convenient share subscription and redemption, shareholders have more freedom and flexibility to join and leave a fund. Such ease of movement and adaptability are essential to the effectiveness of investment funds.

 

The financial reporting requirements often require such instruments to be classed as liabilities when funds are capitalized with redeemable preferred shares, and this presents a challenge during solvency assessments prior to capital reduction or redemption. The limitation caused by the reporting standard's categorization requirement is eliminated because VCCs are excluded from the solvency test.

 

Contrary to corporations formed in accordance with the Companies Act, which mandates that dividends only be paid from profits, VCCs may pay dividends from the capital itself.


Conclusion

The Variable capital company Singapore is a brand-new corporate structure that gets over the drawbacks of the pre-existing ones. With this development, it is predicted that Singapore's role as the fund management hub will become comprehensive and effective, with top-tier management capabilities, a strong regulatory environment, and a favourable tax regime. With the introduction of the VCC, the industry will experience a boom in activity, providing many opportunities for service providers like auditors, tax experts, custodians, fund managers, and advocates to expand their businesses. Singapore's most recent advancement in the fund management industry is proof of the city-state's determination to keep one step ahead of the competition and maintain its position as the region's leading center for asset and fund management for business.

 


Location: 7 Temasek Blvd, Singapore 038987

Comments

Post a Comment

Popular posts from this blog

What is Shadow NAV administration? How to manage Shadow NAV by the fund manager?

-
Image
Basically, a fund administrator is greatly acknowledged as an outsourced third party service provider that safeguards the choices of the investors by making the confirmation of the assets separately and appropriate assessment of the fund. With the aid of outsourcing process of the Fund Administration function, fund administrators and managers are permitted the liberty to concentrate mainly on the portfolio management appropriately. The prime responsibility of Fund Solutions Provider or fund administrator is to calculate the fund net asset evaluation. Ascent Fund Services What Is the Actual denotation of Shadow NAV? The Shadow NAV is the actual NAV calculation finished with the objective of confirming the official NAV.  It could be done successfully by the help of the hedge fund manager or it might be outsourced to an expert service provider. In fact, the fund could employ a second Shadow NAV Administrator to calculate the actual value of the shadow NAV. Some invest
Read more

How Variable Capital Company has Revolutionized the Global Fund Management

-
Image
The Variable Capital Company (VCC) is the latest and innovative fund management strategy which has brought Singapore to the forefront of global investment services. It has provided many opportunities for the VCC fund administrator to manage the fund and support the related activities. VCC is a legal framework provided for investment funds that need to be domiciled in Singapore. It intends to offer an alternative for the existing fund or collective investment schemes like partnerships, unit trust, cooperations, etc. Some of the notable key features of VCC includes:   VCC is set up as a single stand-alone fund or as a main VCC with multiple sub-funds.   VCC can be used as a traditional or alternate fund strategy in closed/open-ended forms.   In the tax aspect, it will still be considered a regular Singapore company. What has made Variable Capital Company so powerful?  Several reasons have made VCC the most powerful and stable fund strategy. It has been recognized as a well-run investmen
Read more

Hedge Fund Administrator, VCC Fund Administrator, Corporate Solutions Provider and Real Estate Investment Funds in a nutshell

-
Image
When it comes to savings and investment, it is very important to be well aware of the options as it involves money and trust, and investing money without proper research is like walking blindfolded in a room full of knives. We will be sharing the basics of Hedge Fund Administrator, VCC Fund Administrator, Corporate Solutions Provider, and Real Estate Investment Funds so that you make a well-informed decision. Basics of Hedge Fund Administrator A Hedge Fund Administrator is a service provider to the hedge fund and the main job of the administrator is to provide certain accounting and back office services to a hedge fund. The central service is the accounting of investor contributions and withdrawals. They also compute the profits and losses for the accounting period on a monthly or quarterly basis. The administrator may also provide other back end services such as handling the subscription documents and making sure checks are cashed or wires are appropriately taken care of. Some hedge
Read more