Rajiv Premkumar
Rajiv Premkumar

Across financial markets, supervision is becoming more rigorous, with authorities paying closer attention to how firms make decisions, manage risk and respond when their business changes. The old comfort of relying solely on having the right documents in place is becoming increasingly difficult to justify as regulators accumulate more information about how firms behave after approval.

Singapore offers a particularly sharp example of this change. Its position as a major financial centre has made regulatory expectations a central part of operating there. With more than 1,338 VCCs now registered in Singapore as of April 2026, recent developments around Variable Capital Companies have drawn attention to how the structure is governed and used. Singapore introduced the VCC as a corporate structure designed specifically for investment funds, with ACRA overseeing its corporate registration and related requirements, while the Monetary Authority of Singapore (MAS) regulates the investment-management activity carried out through the structure.

ACRA's role covers the corporate framework, including registration, company secretarial matters and filings, while MAS oversees the regulated investment-management activity and sets standards for investment managers and the VCCs they manage. Singapore's 2024 Money Laundering Risk Assessment identifies VCCs as structures that can only be used to manage investment funds and records the anti-money laundering and counter-terrorism financing obligations attached to them.

The VCC issue illustrates a question now confronting financial firms in many regulated markets: what happens after the paperwork is approved? A structure can satisfy a formal requirement while the way it is governed, controlled and operated raises a different set of questions. Regulators increasingly have the information and experience to ask them.

Rajiv Premkumar, founder of Curia Regis, sees the mistake in treating regulatory expectations as a choice between form and substance. "There is this misconception that it's a choice between one or the other. I believe that it's important, at least in Singapore, to have your eye on both."

His argument centres on regulatory intent. Regulators establish the framework from the top down, but financial firms still have to interpret how those requirements apply to their own business model.

The difficulty becomes especially visible when experienced financial professionals leave large institutions to establish their own firms. Someone who spent years mastering one function inside a major asset manager may know that function intimately without having encountered the full range of regulatory, operational, and commercial decisions involved in running an independent business.

Premkumar identifies a few points of friction within a financial institution's regulatory journey. First one being inexperience, as one of the largest gaps. This ties in with a lack of resources, particularly for newer, smaller setups, which may not have the regulatory resources of major institutions. Additionally, larger firms may still lack an external reference point for judging their own practices. His observation applies across the market, from small wealth managers and private equity firms to large financial platforms. "This is why we do what we do at Curia Regis," he says.

Regulatory planning therefore has consequences before a compliance team even begins reviewing a finished business. Premkumar argues that firms entering Singapore and other highly regulated jurisdictions need an early view of their minimum operational requirements because those decisions affect capital and operating expenditure, staffing and infrastructure. A company also needs to consider how its obligations may change as it introduces new products, reaches different customers or enters a new market.

The same logic is influencing what regulators want to see from firms seeking approval. Premkumar has observed increasingly detailed questioning as authorities assess how previous requirements have worked in practice, how businesses have responded, and where weaknesses remain. Regulatory scrutiny is increasingly testing whether a company has a credible reason to enter the market and what it can meaningfully contribute once it does. Technology is also changing the questions regulators can ask. Premkumar believes AI has helped detailed regulatory scrutiny, while authorities are becoming better at identifying gaps between stated requirements and how firms implement them.

Premkumar states firms need to demonstrate a proposition with a clear purpose in the market. "There needs to be a real benefit to having any of these companies come in," he says. "Having a USP is probably more important now than before." A business that changes its strategy after approval can also create a new regulatory problem if the shift moves it into a different risk category, particularly without adequate communication with the regulator.

A familiar strategy presented in a new regulatory wrapper may struggle to make a compelling case. Premkumar points to the volume of established hedge fund strategies already operating across financial markets and argues that new firms doing similar need to explain what makes their approach worthy of regulatory attention, whether through a different distribution channel, technology stack or method of generating returns. Regulators, he believes, are looking closely at credibility, track record, resources and whether management has sufficiently thought through the proposition.

Compliance, meanwhile, is acquiring greater influence inside financial institutions. Premkumar points to recent senior appointments involving compliance professionals as evidence of a shift towards giving regulatory expertise a seat in management. "We're seeing more and more compliance personnel that are taking on management roles in quite a few organizations," he says, "this pattern is looking increasingly common across both traditional and new age financial services."

Curia Regis reflects one version of this changing model. Premkumar places emphasis on experienced practitioners handling regulatory work rather than relying on junior personnel, while the firm is also developing technology to support greater scale and more complex assignments.

Financial firms are likely to be better prepared for tighter supervision when compliance is built into the business plan from the outset, rather than addressed only once regulatory scrutiny begins. A licence remains essential, but the harder test is whether the business can demonstrate that its core components- people, processes, and profit thrive together.