The popular variable capital company structure, set up in 2020 to draw in fund managers and family offices, could be used for money laundering, warns the Monetary Authority of Singapore to industry participants, according to the Financial Times.
The warning was delivered at a briefing in late January, and was confirmed to the FT by the MAS.
MAS, according to the FT, told the industry participants that more than 1,400 VCCs had been set up and 3,300 sub-funds were operational.
Since the introduction of the VCC structure, there had been several money-laundering cases, triggering a broader concern for illegal fund flows.
The MAS officials reportedly urged fund managers to ensure the products were not used by criminals to move money in and out of Singapore.
The MAS told the FT the briefing was part of the agency’s "regular engagements with the industry" to share "good practices" for governance and fund management.
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"There is no change in our regulatory standards and MAS continues to welcome the responsible use of VCCs," says MAS.
