MAS tweaks licensing rules to make crowdfunding more accessible to SMEs

More platforms will be licensed under new rules.

The Monetary Authority of Singapore (MAS) will lower the base capital and minimum operational risk requirement for securities-based crowdfunding (SCF) platforms in order to give startups and SMEs greater access to crowdfunding.

The base capital and minimum operational risk requirements for SCF platforms will be reduced to $50,000. Currently, the base capital requirement for certain SCF platforms serving accredited and institutional investors is $250,000. The minimum operational risk requirement for such platforms is $100,000.

In addition, the $100,000 security deposit requirement for these SCF platforms will be removed.

Under the new rules, pre-qualification checks for investors will also be simplified. SCF operators need only determine that investors have either the financial competence or are suitable to invest in SCF given their investment objectives and risk tolerance. As demonstration of financial competence, SCF operators only need to ensure that investors have either the knowledge or experience to invest in SCF.

“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,” said Lee Boon Ngiap, Assistant Managing Director, Capital Markets, MAS.