 | Online investing in South East Asia is moving fast lately. After Malaysia and Thailand, it is now the turn of Singapore to announce regulation changes in order to foster digital investments. The Republic, with its 5.4 million population and a surface of approximately 718 km2, is probably best known for its high GDP and for being home to many multinational companies. However, what is possibly less know for is that it is the country where it is the easiest place to do business in the world and that SMEs contribute largely to Singapore’s economic growth employing 70% of the workforce. |
It is to foster the development of this type of companies that the Monetary Authority of Singapore (MAS) has recently launched a public consultation asking for feedback on proposed rules and exemptions to encourage the establishments and growth of securities based online investing portals. In particular, MAS proposes to limit the possibility to invest through online portals only to accredited investors, who are deemed more expert and conscious of the inherent risks of investing in young businesses. Furthermore it suggests the following:
Lowering Licensing Requirements
In order to operate, online investing portals shall get Capital Market Service license, which brings along several requirements, including a base capital of $250,000. However, given the lower risks posed by Dealing Licensees that do not handle, hold or accept customer monies, assets, or positions, and do not act as principal in transactions with investors - like in the case of crowdinvesting portals-, MAS proposes to lower the minimum base capital requirement for such entities to $50,000. The same reasoning is applied to the Security Deposit of $100,000 which licensees have to lodge with MAS: the document proposes to remove it completely for online investing portals.
Changing Prospectus Requirements
MAS recognizes that filing a prospectus can be too expensive for a small fundraise exercise and therefore suggest that issuers raising funds through digital investing portals can exploit an existing prospectus exemption, thus avoiding to spend time and money on the filing of the abovementioned document. However, since exempted offers have to be restricted in reach and scope to accredited investors, MAS proposes to forbid advertising activities of the offering, including posting it on an online crowdinvesting portal accessible by all kinds of users.
MAS invites all the interested parties to contribute with comments by 18th of March 2015.
References
Monetary Authority of Singapore (2015). Consultation paper: Facilitating Securities Based Crowdfunding
Image credit to: Mac Qin http://bit.ly/1A8vmay
Lowering Licensing Requirements
In order to operate, online investing portals shall get Capital Market Service license, which brings along several requirements, including a base capital of $250,000. However, given the lower risks posed by Dealing Licensees that do not handle, hold or accept customer monies, assets, or positions, and do not act as principal in transactions with investors - like in the case of crowdinvesting portals-, MAS proposes to lower the minimum base capital requirement for such entities to $50,000. The same reasoning is applied to the Security Deposit of $100,000 which licensees have to lodge with MAS: the document proposes to remove it completely for online investing portals.
Changing Prospectus Requirements
MAS recognizes that filing a prospectus can be too expensive for a small fundraise exercise and therefore suggest that issuers raising funds through digital investing portals can exploit an existing prospectus exemption, thus avoiding to spend time and money on the filing of the abovementioned document. However, since exempted offers have to be restricted in reach and scope to accredited investors, MAS proposes to forbid advertising activities of the offering, including posting it on an online crowdinvesting portal accessible by all kinds of users.
MAS invites all the interested parties to contribute with comments by 18th of March 2015.
References
Monetary Authority of Singapore (2015). Consultation paper: Facilitating Securities Based Crowdfunding
Image credit to: Mac Qin http://bit.ly/1A8vmay
 | About the author - Irene Tordera Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives. During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem. |
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