05/06/24

From Features

Investment Funds

In the realm of offshore finance, investment funds represent a cornerstone for global investors seeking to diversify their portfolios and maximize returns. These funds, often domiciled in renowned jurisdictions such as Hong Kong, Luxembourg and Singapore offer a plethora of advantages including tax optimization, regulatory flexibility, and access to a wide array of investment opportunities.

Requirements For SFC Authorised Funds With Exposure To Virtual Assets

Requirements For SFC Authorised Funds With Exposure To Virtual Asset

Gavin Cumming
Timothy Loh LLP, Hong Kong

Globally, the virtual asset landscape has evolved at a rapid pace and there are now a large number of investment products providing exposure to virtual assets. These include virtual asset related ‘exchange traded funds’ (ETFs) offered in major overseas markets, which are available to both retail and professional investors.

Demand for funds with exposure to virtual assets has been increasing in Hong Kong and as a result, the Securities and Futures Commission (SFC) has introduced new regimes that provide for the offering of certain virtual asset products to the Hong Kong public, provided the appropriate investor protection safeguards can be met.

In October 2022, the SFC started to accept applications for ETFs that have exposure to virtual assets primarily through futures contracts, and in June 2023, the SFC’s licencing regime for virtual asset trading platforms (VATPs) became effective, enabling Hong Kong investors to directly invest in large cap spot virtual assets, subject to certain eligibility requirements.

At the end of last year, on December 22, 2023, the SFC issued a new circular (SFC Circular) which significantly relaxed the previous approach to virtual asset ETFs and other funds with exposure to virtual assets. The key effect of the SFC Circular is to expand the scope of virtual asset ETFs that ar…

Singapore

Singapore: An Attractive Hub For Private Funds

Jerry Koh
Managing Partner, Allen & Gledhill LLP
Jonathan Lee
Partner, Allen & Gledhill LLP

Over the past decade, Singapore has developed rapidly as an asset management hub and fund domicile, with total assets under management (AUM) increasing from S$1.6 trillion in 2012[1] to a peak of S$5.4 trillion in 2021.[2] While this has dipped slightly to S$4.9 trillion in 2022 in line with the wider decline in global AUM due to economic uncertainties, market corrections in valuations were partially offset by healthy net AUM inflows into Singapore.

 The steady growth of Singapore’s AUM is illustrative of its importance to foreign investors and asset managers as a global financial centre, with approximately 76 per cent of Singapore’s AUM sourced from outside Singapore and 88 per cent of Singapore’s AUM invested in assets outside Singapore in 2022

This is also borne out by the rapid increase in the number of asset managers that have set up operations in Singapore. From 2014 to 2022, the number of registered and licenced fund management companies in Singapore doubled from 591 to 1,194.[3]

In this article, we explore several key reasons why we believe Singapore continues to attract asset managers to raise private capital here.

At The Crossroads Of Asia

According to McKinsey, Asia accounted for 57 per cent of global GDP growth between 2015 and 2021.[4] Singapore’s strategic location as a gateway to the rapid growth markets of South-east Asia, and its politically neutral and open outlook in cultivating close ties with both the East and…