The Monetary Authority of Singapore (MAS) launched a consultation paper in February last year proposing measures to facilitate access capital for startups and SMEs. With the responses received, 8 June 2016 MAS announced new measures to simplify the use of securities crowdfunding (SCF) for companies that are looking to raise funds, as well as for crowdfunding platform operators.
For platform operators, MAS will simplify the pre-qualifications needed for those raising less than S$5 million within 12 months, allowing them to do that without having to issue a prospectus. The changes will simplify checks needed for investors so that the process can be quicker and easier to execute.
Financial requirements for platform operators who raise funds only from institutional and accredited investors, will be reduced, making it easier for them to be licensed as dealing intermediaries, “as long as they do not handle or hold customer monies, assets or positions, and do not act as principal against their customers”. In practical terms, the minimum capital requirement will be reduced from S$250,000 to S$50,000, the minimum operational risk requirement will be reduced from S$100,000 to S$50,000 and the requirement for a S$100,000 security deposit will be removed.
MAS announced also that they will publish new guidelines on SCF-related advertising and Frequently Asked Questions on lending-based crowdfunding, with the aim to help market participants, including platform operators, to better understand the regulatory framework of lending-based crowdfunding.
MAS Assistant Managing Director of capital markets Lee Boon Ngiap said: “Securities-based crowdfunding is a useful addition to our financing landscape. At the same time, SCF investments can be quite risky. The measures we are implementing seek to strike the right balance between improving access to SCF for start-ups and SMEs and protecting investor interests. The public consultation exercise has been very useful in helping us arrive at this balanced approach.”
In conclusion, this represent a positive development for those looking to start a new digital investing platform in Singapore, but it’s not the only good news. Last year the Financial Sector Technology & Innovation (FTSI) scheme launched, committing SGD $225 million ($167 million), in a five year plan to support financial technology innovation. In April MAS announced additional initiatives to boost the country’s position as a global hub for digital finance, with the launch of the first Singapore FinTech Festival, to be held from 14 to 18 November 2016, and it was just last week that MAS and the Australian Securities and Investments Commission (Asic) signed a new cooperation pact, called the Innovation Functions Cooperation Agreement, that will allow fintech firms in Australia and Singapore to speed up the process of entering each other's markets.
For South East Asia the time seems right to build and modernize financial services for the new age customers. You can get in touch with us now and see how we can help you based on our expertise from similar markets, that have gone through similar points in time.
Financial requirements for platform operators who raise funds only from institutional and accredited investors, will be reduced, making it easier for them to be licensed as dealing intermediaries, “as long as they do not handle or hold customer monies, assets or positions, and do not act as principal against their customers”. In practical terms, the minimum capital requirement will be reduced from S$250,000 to S$50,000, the minimum operational risk requirement will be reduced from S$100,000 to S$50,000 and the requirement for a S$100,000 security deposit will be removed.
MAS announced also that they will publish new guidelines on SCF-related advertising and Frequently Asked Questions on lending-based crowdfunding, with the aim to help market participants, including platform operators, to better understand the regulatory framework of lending-based crowdfunding.
MAS Assistant Managing Director of capital markets Lee Boon Ngiap said: “Securities-based crowdfunding is a useful addition to our financing landscape. At the same time, SCF investments can be quite risky. The measures we are implementing seek to strike the right balance between improving access to SCF for start-ups and SMEs and protecting investor interests. The public consultation exercise has been very useful in helping us arrive at this balanced approach.”
In conclusion, this represent a positive development for those looking to start a new digital investing platform in Singapore, but it’s not the only good news. Last year the Financial Sector Technology & Innovation (FTSI) scheme launched, committing SGD $225 million ($167 million), in a five year plan to support financial technology innovation. In April MAS announced additional initiatives to boost the country’s position as a global hub for digital finance, with the launch of the first Singapore FinTech Festival, to be held from 14 to 18 November 2016, and it was just last week that MAS and the Australian Securities and Investments Commission (Asic) signed a new cooperation pact, called the Innovation Functions Cooperation Agreement, that will allow fintech firms in Australia and Singapore to speed up the process of entering each other's markets.
For South East Asia the time seems right to build and modernize financial services for the new age customers. You can get in touch with us now and see how we can help you based on our expertise from similar markets, that have gone through similar points in time.
About the author - Alessandro Ravanetti
Alessandro is Co-founder & CMO of Crowd Valley. He has worked in the fintech industry, with marketplace investing and lending, since 2011. Has built and managed digital companies with distributed teams and international partners, and gained experience with both startups and large corporations, having worked with British Telecom, Bloomberg and the Grow VC Group.
Alessandro grew up in Italy, where he graduated with a B.A. in Economics at University of Parma, before to obtain a M.S. in Finance at Regent’s University London. He studied and worked in many different cities, including Munich, Geneva, London, Barcelona and Valencia. Genuinely passionate about financial technology and innovation, he loves to spend his spare time traveling and discovering new cultures. You can find him on Twitter at @aleravanetti.
Alessandro is Co-founder & CMO of Crowd Valley. He has worked in the fintech industry, with marketplace investing and lending, since 2011. Has built and managed digital companies with distributed teams and international partners, and gained experience with both startups and large corporations, having worked with British Telecom, Bloomberg and the Grow VC Group.
Alessandro grew up in Italy, where he graduated with a B.A. in Economics at University of Parma, before to obtain a M.S. in Finance at Regent’s University London. He studied and worked in many different cities, including Munich, Geneva, London, Barcelona and Valencia. Genuinely passionate about financial technology and innovation, he loves to spend his spare time traveling and discovering new cultures. You can find him on Twitter at @aleravanetti.
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