The Central Bank of Singapore has issued new guidelines on initial coin offerings (ICOs), that describe the cases when token sales would be regarded under securities laws.

As the Monetary Authority of Singapore (MAS) has stated, there are some certain circumstances that can allow tokens sold through the blockchain funding model to be considered securities, referring to Singapore’s Financial Advisers Act and Securities and Futures Act (SFA).

MAS says:

“Offers or issues of digital tokens may be regulated by MAS if the digital tokens are capital markets products under the SFA. Capital markets products include any securities, futures contracts and contracts or arrangements for purposes of leveraged foreign exchange trading.”

The document covers several case studies, one of which concerns a token related with a computing power-sharing platform (not a security), and another one with a startup investment fund (can be regarded as a security).

Also, the document states that some other Singapore laws may be suitable in terms of token sales, including those that don’t lie under its direct jurisdiction.

“Digital tokens that perform functions which may not be within MAS’ regulatory purview may nonetheless be subject to other legislation for combating money laundering and terrorism financing,” the report says.

Considering the risks of terrorism financing and money laundering, the MAS plans to create a new payments service framework specifically for companies involved in “the dealing or exchange of virtual currencies for fiat or other virtual currencies.”

“Such intermediaries will be required to put in place policies, procedures and controls to address such risks. These will include requirements to conduct customer due diligence, monitor transactions, perform screening, report suspicious transactions and keep adequate records,” the MAS said.