Statute Details
- Title: Variable Capital Companies (Prescribed Accounting Standards) Regulations 2020
- Full Title: Variable Capital Companies (Prescribed Accounting Standards) Regulations 2020
- Act Code: VCCA2018-S167-2020
- Type: Subsidiary Legislation (sl)
- Commencement Date: 16 March 2020
- Parts: N/A
- Key Sections: Section 2: The following accounting standards or practices are prescribed for the purposes of section 100(8)(b) of the Act:
- Related Legislation: Futures Act, Timeline Authorising Act, Variable Capital Companies Act 2018
What Is This Legislation About?
The Variable Capital Companies (Prescribed Accounting Standards) Regulations 2020 are a set of subsidiary regulations made under the Variable Capital Companies Act 2018. These regulations prescribe the specific accounting standards and practices that must be followed by variable capital companies (VCCs) in Singapore.
The purpose of these regulations is to ensure that VCCs, which are a new type of corporate structure introduced in Singapore, adhere to well-established and recognized accounting standards in the preparation of their financial statements. This helps to promote transparency and consistency in the financial reporting of VCCs, which is crucial for investors, regulators, and other stakeholders.
What Are the Key Provisions?
The key provision in these regulations is Section 2, which prescribes the following accounting standards and practices for VCCs:
(a) The International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(b) The United States Generally Accepted Accounting Principles (US GAAP) issued by the Financial Accounting Standards Board.
(c) The requirements relating to the preparation of accounts mentioned in Chapter 5.1 of the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore (MAS) under Section 321(1) of the Securities and Futures Act.
These three sets of accounting standards and practices are widely recognized and used globally, ensuring that VCCs in Singapore adhere to high-quality financial reporting standards. By prescribing these specific standards, the regulations provide clarity and consistency for VCCs in preparing their financial statements.
How Is This Legislation Structured?
The Variable Capital Companies (Prescribed Accounting Standards) Regulations 2020 are a relatively short piece of legislation, consisting of only two sections:
1. Citation and commencement: This section provides the title of the regulations and states that they come into operation on 16 March 2020.
2. Accounting standards applicable to variable capital companies: This is the key section that prescribes the specific accounting standards and practices that VCCs must follow, as outlined in the previous section.
The regulations do not have any further subdivisions or parts, as they are focused on the single issue of prescribing the applicable accounting standards for VCCs.
Who Does This Legislation Apply To?
These regulations apply to all variable capital companies (VCCs) registered in Singapore. VCCs are a new corporate structure introduced in Singapore through the Variable Capital Companies Act 2018, which allows for the establishment of investment funds and collective investment schemes with greater flexibility and efficiency compared to traditional corporate structures.
The regulations ensure that VCCs, regardless of their investment strategies or asset classes, adhere to the same high-quality accounting standards in the preparation of their financial statements. This promotes transparency and comparability for investors, regulators, and other stakeholders interested in the financial performance of VCCs.
Why Is This Legislation Important?
The Variable Capital Companies (Prescribed Accounting Standards) Regulations 2020 are an important piece of legislation for several reasons:
1. Ensuring financial reporting consistency: By prescribing the use of well-established accounting standards like IFRS and US GAAP, the regulations help to ensure that VCCs in Singapore prepare their financial statements in a consistent and comparable manner. This benefits investors, regulators, and other stakeholders who need to assess the financial performance of VCCs.
2. Promoting transparency and accountability: The use of recognized accounting standards enhances the transparency and accountability of VCCs, as their financial information can be more easily understood and analyzed by interested parties. This is crucial for maintaining the integrity and credibility of the VCC structure in Singapore.
3. Aligning with international best practices: The prescribed accounting standards are widely used and accepted globally, which helps to align the financial reporting of Singapore's VCCs with international best practices. This can facilitate cross-border investment and cooperation, as well as enhance the reputation of Singapore's VCC framework.
4. Enabling effective regulation and supervision: The consistent application of accounting standards allows regulators, such as the Monetary Authority of Singapore, to more effectively monitor the financial health and compliance of VCCs. This supports the overall regulatory framework for VCCs in Singapore.
Related Legislation
- Futures Act
- Variable Capital Companies Act 2018
- Securities and Futures Act
Source Documents
This article provides an overview of the Variable Capital Companies (Prescribed Accounting Standards) Regulations 2020 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.