THE heat is on in the Singapore crowdfunding space and this comes, unsurprisingly, on the back of clearer regulations introduced recently. Clearer rules aimed not only at control but also at giving the nascent segment a nudge are commendable but, given that the market is not only at its infant stage but also opaque, a nagging question is why the revised measures are not accompanied by requirements to lift the quality of disclosure.

The Monetary Authority of Singapore (MAS) in June clarified rules that essentially made it necessary for securities-based crowdfunding (SCF) platforms to be licensed. MAS also lowered the financial requirements for SCF platform operators, whose basic function is match-making SMEs and crowdfunding investors, the latter each funding a fraction of an unsecured loan to small businesses, in return for an interest that at the moment is in excess of 10 per cent.

So long as they do not hold customers' money, and do not act as principal against their customers, the minimum base capital requirement for SCF platforms is slashed from S$250,000 to S$50,000; the minimum operational risk requirement is halved to S$50,000.