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MAS makes ICO announcement at Singapore Fintech Festival

At the second annual Singapore Fintech Festival (November 13 – 17), the Monetary Authority of Singapore (MAS) has made important statements regarding fintech development and ICOs in the South-East Asia technology hub. The event itself will provide the 25,000 attendees with insights into fintech development. Present in Singapore is Holland FinTech’s founder, Don Ginsel.

The Monetary Authority of Singapore is a key organiser of the state-sponsored festival. The Managing Director of MAS, Ravi Menon, presented a new grants scheme worth S$27m (EUR16.8m). The scheme will promote the use of AI and data analytics in fintech. Singapore-based financial institutions will be eligible to claim up to 50% reimbursement for investments into AI or data related fintech research. Research institutions are eligible for 70% reimbursement.

Chief Fintech Officer of MAS, Sopnendu Mohanty, was part of a panel at the festival and noted that MAS’s biggest challenge in fintech is talent.

Coinciding with the Fintech Festival, MAS has released a statement providing guidance on the application of securities law to digital token offerings and ICOs. While the November 14 statement makes clear it does not have legal affect, it reads like draft legislation. This suggests the government will legislate officially in the near future.

The crux of the statement is that digital token offerings are governed by securities law in Singapore when they constitute capital market products; i.e., securities or futures contracts. It is a substantive analysis, meaning the MAS will look at the nature of the ICO not its name to determine whether it is within the ambit of securities law. The statement also reminds us that when ICOs are outside of securities law, they may still be governed by other trade or terrorism law.

Interestingly, the statement contains a section (2.12) which discusses extraterritoriality. This is another hint that this statement may function as draft legislation. The statement is one of the most detailed released by governments in the past weeks. In terms of extraterritorial application, Section 2.12 says Singaporean law (the Securities and Futures Act) may still apply to a  trading platform operating outside of Singapore.  This approach suggests that Singapore may wish to become a leader in the regulation of digital token offerings. By creating early standards of practice, Singapore may be able to direct future regulation of ICOs to its advantage.

By Grace Appleford, Research Analyst for Holland FinTech.]]>

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