MAS Issues Revised ICO Guidelines

The Monetary Authority of Singapore has revised its Guide to Digital Token Offerings on 30 Nov 2018.

In essence, the MAS is issued further illustrations on the application of Securities and Futures Act (SFA), the Financial Advisers Act (FAA) and the upcoming Payment Services Bill (PSB) on token offerings in Singapore.

There are some of the more significant policy guidance:

• SAFTs: The MAS has made it clear that any analysis of whether a Simple Agreement for Future Tokens (SAFT), deemed as an "investment contract" under US regulations (and as set out under the Howey test), does not necessarily make it securities under Singapore laws. The ability of a token to be traded on a secondary market or exchange does not make it a securities product. A separate legal analysis is required under Singaore's SFA.
• Rewards for Usage/Activity: Any scheme where rewards are issued to token holders proportionate the investors usage and activity on the platform (e.g. rewards for voting on platform) does not make the token a security.
• ICO Advisors: An ICO adviser providing services in connection with non-securities tokens will not require licensing for providing corporate finance advice under the SFA or for providing financial advice under the FAA. However, the advisers should be mindful of anti-moneylaundering and anti-terrorist financing laws.
• Buy-Back Arrangements: An arrangement where an asset-backed token is offered, and which can be sold back to the company, is likely to be treated as debenture/securities.
• Asset-Backed Stable Coins. For fiat-currency backed stable coins, where there is an obligation for the company to buy back the token, that may constitute a debenture/securities. Licensing/prospectus obligations may apply, unless the company relies on certain exemptions. This may also constitute e-money issuance under the upcoming Payment Services Bill.
• Other consequential changes have been made to take into account of the upcoming Payment Services Bill.