When a token is not a capital markets product
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The Guide's case studies and the 2025 revision confirm that a token conferring only a right to use a service is outside the SFA, provided it carries no claim to profits, no debt and no pooled management. The standard example is a token redeemable for computing power or storage on the issuer's platform. Governance tokens that confer only voting rights over a protocol, with no economic entitlement, have generally been treated as outside the SFA. MAS has warned that a governance token whose holders are entitled to a share of protocol fees may be a debenture or a CIS unit depending on the structure. Non-fungible tokens representing a unique digital artwork are outside the SFA unless they are fractionalised or structured to confer rights in an underlying pool (see Chapter IX).
The analysis must be performed on the token as it will actually operate. A utility token sold before the service exists, with the price pitched to investors as a speculative opportunity and with a secondary market promised in the white paper, is likely to be treated as an investment product despite the "utility" label. MAS has indicated that the marketing of a token, the timing of its sale and the expectations created in purchasers are relevant to classification. The approach resembles the economic analysis that FINMA applies in its ICO Guidelines (see Part E, Chapter I), although Singapore has no equivalent of the Swiss "pre-functional utility token is an asset token" rule and reaches similar results through the CIS and debenture definitions.
| Token feature | SFA classification | Consequence |
|---|---|---|
| Represents equity in a company | Security (share) | Prospectus or exemption; CMS licence for dealers; market approval for trading venues |
| Promise to repay or pay interest | Security (debenture) | Prospectus or exemption; CMS licence for dealers |
| Pooled funds managed for profit | Unit in a CIS | Authorisation or recognition for retail; CMS licence for the manager |
| Value derived from an underlying | Derivatives contract | CMS licence for dealers; retail restrictions |
| Right to use a service only, service functional | Not a capital markets product | Possibly a DPT under the PSA if transferable and accepted as payment |
| Voting rights only, no economic right | Generally not a capital markets product | Possibly a DPT; AML analysis of the issuer |
| Unique digital collectible | Not a capital markets product | Outside the SFA and generally outside the PSA |
For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.