The Monetary Authority of Singapore (MAS) has unveiled plans to reduce the base capital and minimum risk prerequisite for crowdfunding programs which is hoped will make crowdfunding more accessible to SMEs and start-up companies.
The new base capital and minimum risk requirement for crowdfunding will be lowered to SGD $50,000. Presently, the base capital requirement for some crowdfunding platforms for established investors is SGD $250,000. With the minimum operational risk is SGD $100,000. Additionally, the security deposit necessity for these SCF platforms will be removed.
Under the new regulations, pre-qualifying checks for investors will also be made much simpler. Crowdfunding operators now only need to conclude that investors have either the financial competence or are apt to invest by assessing their risk tolerance. To demonstrate financial competence, crowdfunding operators are now only required to prove that investors have either the experience or knowledge to invest. This will significantly increase incentives to invest in crowdfunding ventures in Singapore.
More platforms designed to encourage new initiatives will be licensed under new regulations.