A business dealing in capital markets products or providing fund management services in Singapore needs a capital markets services licence under the Securities and Futures Act unless a specific exemption applies, and getting this wrong before launch is one of the most expensive mistakes a fintech or fund founder can make. This decision tree walks through the checkpoints.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice. It is written for founders, CFOs and compliance leads assessing whether their planned activities fall within the Securities and Futures Act (SFA) regime before they scale.
What the SFA actually regulates
The Securities and Futures Act 2001 (SFA) is Singapore’s core capital markets statute, administered by the Monetary Authority of Singapore (MAS). Section 82 sets out the need for a capital markets services (CMS) licence: a person must not carry on a business in any regulated activity, or hold himself out as carrying on such a business, unless the person holds a CMS licence for that regulated activity or is exempt. The regulated activities themselves are listed in the Second Schedule to the SFA, and include dealing in capital markets products, fund management, providing custodial services for securities, and several others. Section 84 governs the application process for a CMS licence.
Decision tree: does your business need a CMS licence
- Buying and selling securities, units in collective investment schemes, or derivatives contracts on behalf of clients: this falls within “dealing in capital markets products” under the Second Schedule, and will generally require a CMS licence unless an exemption applies.
- Managing a portfolio of capital markets products on a discretionary basis for others: this is “fund management” under the Second Schedule, and is the regulated activity most fintech and asset-management founders encounter first.
- Only managing your own money, or money within a single-family office structure for related persons: a licensing exemption may be available, but the boundaries of “related persons” and family office exemptions are drawn narrowly and should be checked against MAS’s current guidance before relying on them.
- Operating a platform that merely introduces buyers and sellers without dealing on your own account or managing funds: this may fall outside CMS licensing, but introducing or arranging activities can still trigger a different regulated activity depending on exactly how the platform is structured, so the analysis is fact-specific.
- Already holding a CMS licence and adding a new regulated activity (for example moving from dealing into fund management): a variation of licence is typically required rather than a fresh application, but the scope must still be checked against the Second Schedule activity list.
Who this decision tree is for
This guide is aimed at fintech founders building trading, brokerage or robo-advisory platforms, fund managers launching a Singapore-domiciled vehicle, family offices structuring around related-party exemptions, and the CFOs and compliance leads who have to translate a business model into a licensing position before the product goes live. It assumes the reader has already decided on a corporate vehicle (commonly a private company limited by shares under the Companies Act 1967) and is now working out which activity-based licence, if any, sits on top of that corporate structure.
Fund management: registration versus a full licence
Fund management is one of the regulated activities most commonly encountered by new entrants, and MAS operates a tiered framework rather than a single licence type. A smaller fund manager dealing only with accredited or institutional investors and managing assets under management below a specified threshold may be eligible to register as a Registered Fund Management Company (RFMC) rather than hold a full CMS licence, though this route carries its own investor-number and asset-size conditions that must be checked at the time of application, since MAS has previously tightened this framework and the current thresholds should always be verified against MAS’s own published criteria rather than assumed from older guidance. A fund manager serving retail investors, or exceeding the RFMC thresholds, will generally need a full CMS licence for fund management instead, with correspondingly higher base capital and compliance obligations.
Cost and timeline snapshot
Indicative figures based on current market practice for a Singapore CMS licence application:
- MAS application fee: a nominal lodgment fee, with substantially larger annual fees payable once licensed, scaled to the regulated activities and revenue of the licensee.
- Professional fees for a CMS licence application (legal and compliance advisory): commonly S$20,000 to S$60,000 or more, depending on the number of regulated activities and complexity of the business model.
- MAS processing time: typically 4 to 12 months from a complete application, though this varies significantly with the complexity of the proposed business and the completeness of the initial submission.
- Minimum base capital requirements: these differ by regulated activity and are set out in MAS notices rather than the SFA itself, and should be checked against the current notice before budgeting.
- Ongoing compliance costs (compliance officer, audits, reporting): commonly S$50,000 to S$150,000 or more per year for a small to mid-sized licensed fund manager, scaling with assets under management and headcount.
Exemptions worth checking before assuming you need a full licence
Not every business dealing with capital markets products needs a full CMS licence. MAS maintains a framework of licensing exemptions, including for certain related-corporation dealings, for entities dealing only with accredited or institutional investors under specified conditions, and for smaller fund managers meeting registration-based criteria rather than a full licence. These exemption categories change over time and carry their own conditions (such as investor thresholds, asset caps, or notification requirements to MAS), so a founder should not assume an exemption applies without checking the current MAS licensing framework and, where the position is unclear, taking advice before launch rather than after regulatory attention arrives.
How the SFA interacts with the Companies Act and the Financial Advisers Act
The SFA licensing analysis sits on top of, not instead of, the Companies Act 1967 corporate structure decision covered in the companion article in this series. A CMS licence applicant must already be, or be in the process of becoming, a properly incorporated Singapore entity with a resident director under section 145(1) of the Companies Act 1967, and MAS will look closely at the shareholding, directors and key management personnel of the applicant as part of the licensing assessment. Separately, where a business model involves any element of advising on capital markets products, rather than only dealing or managing them, it should also check its position under the Financial Advisers Act, since the two statutes regulate overlapping but distinct activities and a business can require licences under both at once.
Numerical thresholds to track
Beyond the cost and timeline figures already noted, three numerical checkpoints recur across SFA licensing assessments: the minimum base capital figure attached to each regulated activity (set by MAS notice, not the SFA itself, and varying by activity and risk profile), the investor-count and asset-size thresholds distinguishing a Registered Fund Management Company from a fully licensed fund manager, and the annual licence fee payable to MAS once licensed, which is calculated by reference to the regulated activities held rather than a flat figure. Each of these should be confirmed against the current MAS notice before a business plan or budget is finalised, since all three have been adjusted by MAS over time.
Common mistakes when assessing SFA exposure
The most frequent error is treating “dealing” and “fund management” as if they were the same regulated activity with the same exemptions; they are separate items in the Second Schedule with separate conditions. A second common mistake is assuming a family office or proprietary trading exemption applies without checking the precise definition of “related corporation” or “related persons” used by MAS, which is narrower than many founders expect. A third is under-budgeting for the base capital and ongoing compliance cost of a CMS licence, which can be a multiple of the application cost itself once the business is operating. Finally, some platforms assume that because they do not hold client money, they fall outside the regime entirely, when in fact custody, arranging, or advising activities can each independently trigger a different regulated activity or a separate licensing regime such as the Financial Advisers Act.
Step-by-step: assessing your position
- Map every activity your business intends to carry out against the Second Schedule list of regulated activities, one by one.
- For each regulated activity identified, check whether a MAS licensing exemption applies, and confirm the precise conditions attached to it.
- If no exemption applies, budget for the CMS licence application under section 84, including base capital, professional fees, and the 4 to 12 month indicative processing time.
- Confirm whether the same activities could also trigger a separate licensing regime, most commonly under the Financial Advisers Act if any element of advice is involved.
- Build MAS’s ongoing reporting, base capital maintenance, and compliance officer requirements into the operating budget before launch, not after the licence is granted.
FAQs
What is a CMS licence?
A capital markets services licence is the licence required under section 82 of the Securities and Futures Act to carry on a business in a regulated activity listed in the Second Schedule, such as dealing in capital markets products or fund management.
Do I need a CMS licence to manage only my own money?
Generally no, but structures involving related persons, family offices, or co-investors require careful checking against MAS’s exemption conditions, which are drawn narrowly.
How long does a CMS licence application take?
Indicatively 4 to 12 months from a complete submission, though MAS’s processing time depends heavily on the completeness and complexity of the application.
Is dealing in capital markets products the same regulated activity as fund management?
No. They are separate items in the Second Schedule to the SFA, each with its own scope and exemption conditions.
Where can I check the current regulated activities list?
The Second Schedule to the Securities and Futures Act is published on Singapore Statutes Online, and MAS publishes supplementary guidance and notices on its own website.
How Raffles Corporate Services approaches this decision with clients
We typically start an SFA licensing assessment by listing every activity the business intends to carry out, in plain commercial language, before mapping any of it against the Second Schedule. This ordering matters: founders who start from a regulated-activity label (for example assuming they need a “fund management licence”) sometimes miss that a related but distinct activity, such as arranging deals for others or providing custody, is also present in their model and needs its own analysis. Once the regulated activities are mapped, we check exemption eligibility (including the RFMC route for smaller fund managers) before quoting a licensing timeline and cost, and we flag early wherever an activity might also trigger the Financial Advisers Act, so a client budgets for both processes together rather than discovering a second licensing requirement mid-application.
Related guides
For the parallel structuring question at the corporate level, see our companion piece on the Companies Act 1967 decision tree, and for a closely related MAS exemption topic, see MAS AML/CFT requirements for licensed entities. For company secretarial context that applies once a CMS licensee is incorporated, see company secretary statutory duties under the Companies Act, and for how corporate changes cascade into employer filings for licensed entities with foreign staff, see MOM filing requirements following a company name change.
For the primary legislation and regulator guidance, consult Singapore Statutes Online and the Monetary Authority of Singapore, and for corporate filing context, ACRA.
Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.