Tue, Nov 20, 2018 – 12:42
The Singapore Stock Exchange (SGX) has presented guidelines for listed companies that are planning to launch an initial coin offering (ICO), which includes the provision of all relevant disclosures.
In the regulator column, Tan Boon Gin, Chief Executive Officer of the Singapore Exchange Regulation (SGX RegCo), pointed out that issues arise in relation to the regulatory obligations of listed companies when offered by the ICO.
He said: "First of all, with the mouse, it should be made clear that even if the company listed on the stock exchange SGX, the issuer of the digital token, these chips are not listed on SGX, so the SGX rules would only cover the company, not the tokens and the chip holder. "
For issuers intending to perform ICOs, they are expected to consult SGX RegCo; As part of the process, they must provide a legal opinion on digital tokens and the auditor's opinion on the accounting treatment of ICOs. SGX will also provide a checklist to the said issuer on matters of conformity that need to be addressed.
Once the ICO has been published, the company must also include disclosures so that shareholders of the issuer are informed of the reasons and risks associated with the ICO; use of collected funds; any influence on existing shareholder rights; accounting and valuation for ICO; and any financial impact on the issuer from the issue with the symbol.
In addition, the company must conduct checks to address the risks of money laundering and terrorist financing.
"The said issuer must reach agreement with its statutory auditors on the scope of the audit, which must ensure that the ICO is duly taken into account in its financial statements and that the related risks have been adequately addressed and that the milestones in the use have been taken into account", added g . Tan.
According to ICO SGX RegCo expects an issuer listed on the stock exchange to inform its shareholders in a timely manner about material information, the development of ICOs and digital tokens, and the use of ICO revenues.
In the meantime, additional measures may be applied, depending on whether the offered digital tokens are understood as products of securities and securities under the Securities and Finance Act (SFA). For example, if digital tokens are deemed to be securities, the registration of securities prospectuses and the issue of securities for trading in securities under SFA should be required. In addition, SGX RegCo may require issuers listed on the stock market to set up a subsidiary for the implementation of the ICO.
"The main concern regarding the ICO and digital tokens of SGX RegCo is how the issuer protects its own interests and its shareholders when led by the ICO. The issuer's management board is ultimately responsible for maintaining a robust risk management system and internal control in this , "wrote Mr. Tan.
"Shareholders are the owners of the issuer and have the right to receive in a timely manner clear and accurate relevant information if the issuer implements ICO financing. Here, it is our responsibility as a market regulator to ensure adequate disclosure and that the information is sufficiently clear and complete for a reasonable investor to accept decision-making on the basis of information. "