CROWDFUNDING platform FundedHere has said its new platform FundedX will not be operating until it has received the relevant authorisation, upon discovering that the business model is not licensed under FundedHere's current licence.
When it unveiled FundedX on Tuesday, FundedHere had described it as a "new private stock exchange to facilitate the trading of shares of high-growth startups and privately held companies in South-east Asia".
But on Thursday morning, FundedHere clarified that FundedX is not a "private stock exchange" as it initially claimed. It said "the platform is merely one where buyers and sellers can register their interests to buy or sell a particular company stock at the pre-determined price set by FundedX."
It said buyers and sellers will not be able to negotiate on the share price of the company, meaning "there is not a process of price discovery and formation on the FundedX platform".
However, FundedHere retracted the entire clarification on Thursday night, saying it had "discovered that it is factually incorrect to state that the business model that FundedX intends to engage in is licensed under FundedHere's capital markets services licence."
"FundedX will be required to be an approved exchange or a recognised market operator in order to do so."
As such, "FundedX will refrain from operating until it has received the relevant authorisation to do so," it said.
BT understands that FundedHere has not applied for a Registered Market Operator (RMO) or an Exempt Market Operator (EMO) licence - but it has a capital markets services (CMS) licence for the running of its equity and debt crowdfunding platform, which it initially said would extend to its running of FundedX.
An MAS spokesman said: "An entity that operates a platform to facilitate secondary trading of securities is required to be an approved exchange or a recognised market operator under the Securities and Futures Act.
"Such an activity is not covered by a capital markets services licence. A capital markets services licence is required for activities such as providing brokerage, corporate finance advice or fund management to customers. MAS expects all entities to be responsible for ensuring that their activities comply with all relevant laws."
BT understands that no high-growth startups or privately held companies have "come on board" the FundedX platform as at Tuesday - even as spokesmen from Grab, 99.co and Love Bonito were quoted in FundedX's press statement as lending support to the platform.