Singapore to ease VC rules to promote financing for startups

Bloomberg

Singapore is proposing to ease regulations for venture capital managers including shortening their application process in a bid to promote financing for startup development.
Under a consultation paper published by the Monetary Authority of Singapore Wednesday, new and existing VC managers won’t be subject to the same capital requirements and business conduct rules that currently apply to fund mangers in general. The MAS will focus primarily on fitness and propriety assessment, and retain regulatory powers to deal with “errant VC managers,” it said in a statement.
The latest plan is part of efforts to support and implement recommendations from a top-level government-appointed committee that are aimed at sustaining Singapore’s growth at an average of 2 percent to 3 percent annually. The plan for VC managers follows initiatives seeking to make it easier to experiment with financial technology in the city-state and represents the latest step by the MAS toward a more agile, flexible regulatory role.
Under the latest proposals, open for public consultation until March 15, the central bank won’t demand that VC managers have directors and representatives with at least five years of relevant experience in fund management. Base capital and risk-based capital requirements will be removed, the MAS said.
It also won’t require VC managers to provide independent valuation, internal audits and audited financial statements — a proposed change that Paul Santos, Singapore-based managing partner at VC firm Wavemaker Partners, described as “very encouraging.”
“The holding values of startup portfolios are just like mid-term marks,” he said. “Nobody makes any money from these mid-term marks. The only time the values are real are when the companies are wound up or are sold or listed.”