Non-SFO fund action register for MAS Circular 05/2026

A non-SFO fund affected by MAS Circular 05/2026 should not update one threshold in isolation. It should identify its legal vehicle, tax-incentive section, award commencement date, fund manager, investment profile and approval-letter terms, then map each circular change to an owner and evidence record.

The circular was issued on 31 July 2026 and covers Sections 13D, 13O, 13OA and 13U. Several changes reduce operating friction, but entry conditions, annual requirements and standard terms still differ. The award letter and circular remain the controlling records for a specific fund.

Confirm that the fund is not an SFO fund

This analysis concerns non-single-family-office funds, typically managed by a licensed or exempt Singapore fund management company and raising third-party capital. An SFO fund consists primarily of one family’s assets and is managed by an SFO relying on the relevant licensing exemption. The two rule sets cannot be combined.

For this reason, record the investors, beneficial ownership, manager’s regulatory status and any family relationships. A fund funded by one family but managed by a licensed third-party manager needs careful classification, particularly because the circular addresses investments in operating businesses associated with investor families.

Write the conclusion on the action register and have legal or tax advisers confirm uncertain structures. Labels used in offering documents or internal spreadsheets do not decide which conditions apply.

Separate entry conditions from annual AUM maintenance

Professional analyses of MAS Circular 05/2026 report that the annual minimum AUM in designated investments condition has been removed for relevant non-SFO 13O, 13OA and 13U funds with retroactive effect from 1 January 2025.

In practice, That change does not remove the entry test. A 13O or 13OA applicant generally needs S$5 million in AUM in designated investments at application, with the stated grace period to the end of the third year of assessment where applicable. A 13U applicant generally needs S$50 million at application without that grace period.

Keep the application-date AUM schedule even where annual maintenance no longer applies. Reconcile holdings to custody, administrator and valuation records and identify which positions are designated investments. Do not describe cash deposits or assets used for the fund’s own operations as qualifying merely because they are assets.

For an existing award, document whether the retroactive removal changes a previously flagged annual breach. Obtain advice before amending any declaration, tax computation or communication already submitted.

Assess closed-end treatment as an election

At the same time, the circular preserves an optional closed-end treatment linked mainly to a cumulative local business spending mechanism. Reported terms include assessment through the tenth incentive year and a waiver of local spending from the eleventh year, subject to the applicable conditions.

An existing fund’s move to closed-end treatment can require revocation of the current award and a fresh application. The election is not a casual description of the strategy. Model the spending, divestment period, remaining fund life, investor consents, tax risk and administrative cost before recommending it.

For an umbrella VCC, the treatment is applied at the VCC level for this purpose. Review sub-funds together. A decision based on one mature sub-fund can be unsuitable for another still making investments.

Document co-management responsibilities

As a result, the circular permits more than one Singapore-based fund management company to co-manage a qualifying fund, provided the conditions are met. Each manager must be fully responsible and accountable for its allocated portfolio and satisfy the relevant investment-professional requirement.

Update the investment-management agreements, mandate schedule and board oversight record. State which manager controls each portfolio, how shared decisions are made, who supplies annual declaration data, and how the administrator allocates fees and performance.

A vague advisory role should not be recorded as co-management merely to spread headcount. Regulatory status, actual responsibility and documentary evidence must agree.

Review investors and family operating businesses

For example, the circular clarifies a restriction on non-SFO funds investing in operating businesses of a family where an individual investor, or related family investors, own, control or influence the business. The restriction can apply through equity, debt or another financing arrangement.

Add family-relationship and control questions to investment onboarding. For every potentially connected business, record the investor, relationship, ownership, influence, instrument and conclusion. Review existing holdings as well as new transactions.

Do not assume that third-party participation removes the issue. A genuine multi-investor fund can still hold an affected portfolio company. Escalate doubtful ownership or influence before investment committee approval.

In addition, the circular also describes possible filing relief for foreign partners or investors in certain Singapore limited partnership funds where they receive only exempt income, subject to IRAS review and approval. Treat that as an approval-dependent item, not an automatic exemption from filing.

Reconcile designated investments and income

Changes reported for both non-SFO and SFO funds include removal of the five per cent cap for physical investment precious metals as designated investments, recognition of qualifying tokenised interests where rights match direct ownership, and clarification of specified income.

Foreign-sourced income may require both derivation and remittance during the incentive period. Guarantee fees can depend on whether they arise from genuine investment activity rather than treasury support for an operating business. Map each income stream to its asset, legal rights, dates and commercial purpose.

For this reason, do not update the tax code based only on an asset label. Obtain the current designated-investment and specified-income definitions, the circular annex and advice for material or novel positions.

Maintain one accountable action register

The Singapore VCC launch readiness guide is the pillar cornerstone. The VCC annual compliance calendar provides a recurring control structure, and the Funds, VCCs and Cross-Border Structures hub connects the library.

The practical benefit of the circular comes from applying the right change to the right award. A dated action register prevents a welcome relaxation from being mistaken for the removal of an entry condition, investment restriction or approval-letter obligation.