Singapore Exchange Publishes Regulations for ICO Offerings

Regulation of Initial Coin Offerings has inched a notch higher in Singapore. The Singapore Exchange has published a new set of rules that will govern how companies go about ICOs. The new guidelines seek to ensure companies make all the relevant disclosures.

SGX ICO Regulation

Listed companies that intend to carry out Initial coin offerings will first have to consult the exchange. The companies will also have to provide a legal opinion on the tokens they intend to offer as well as an auditor’s opinion. The SGX will also require the companies to offer a checklist on compliance matters that may need addressing.

SGX companies planning to carry out ICOs will also have to inform their shareholders. Such companies must also include disclosures that would help shareholders analyze the risks involved. The disclosures will also have to include potential use cases of funds from the offering. Companies will also have to stipulate the potential impact of the offering to shareholders rights.

Companies planning to carry out ICOs will also have to carry out checks all in the effort of addressing money laundering. Likewise, such checks should also address terrorist financing risks.

“The listed issuer must also come to an agreement with its statutory auditors on the scope of the audit which should provide assurance that the ICO has been properly accounted for in their financial statements, and that associated risks have been adequately addressed, and milestones on utilization of funds raised have been adhered to,” said SGX CEO Tan Boon Gin.

Shareholders Protection

In the aftermath of an ICO, SGX, listed companies will have to keep shareholders informed on various material information. The companies will also have to share information on the development of the ICO as well as digital tokens on a regular basis. Companies will also have to provide information on the use of proceeds from such offerings.

Similarly, the country’s central bank MAS is finalizing new legislation that will regulate crypto payment services. The Payment Services Bill has already passed two key stages and is on course to come into law next year.