Yield products as collective investment schemes or structured products

Read the PDF edition (2 pages)

The third category of yield product packages tokens into an instrument. "Earn" products that pool customers' tokens and deploy them across staking, lending and liquidity provision, with a published yield, are collective investment schemes if the four elements of the SFA definition are met. Those elements are no day-to-day control by participants, management as a whole, pooling of contributions and profits, and the purpose of generating a return.¹ Such a scheme may not be offered to retail investors unless it is authorised or recognised by MAS. The manager needs a CMS licence for fund management. MAS has not authorised any retail crypto yield fund and has indicated that it does not expect to. Offers to accredited and institutional investors under the restricted scheme exemption in s. 305 SFA are possible and are the route by which Singapore fund managers offer staking and yield strategies to professional clients.²

Structured products that deliver a token-linked return, such as dual-currency products on bitcoin or principal-protected notes linked to ether, are derivatives contracts or debentures depending on their form. They are capital markets products and require a CMS licence to deal in. They are complex products under the MAS conduct rules and cannot in practice be offered to retail customers in Singapore. The private banks that offer them to accredited clients do so under their existing capital markets permissions, with the token exposure treated like any other underlying.

Example

A Singapore MPI with DPT scope wants to offer three products to its accredited investor clients. They are native ETH staking with rewards passed through, a fixed 5 per cent "ETH savings" product and a pooled "yield optimiser" that moves tokens between protocols. The first is a custodial wallet service within its licence, with the staked tokens held in trust and the rewards credited to each client; the client must be documented as an accredited investor with the opt-in on file. The second is a debenture, because the MPI promises a fixed return and takes the tokens for its own account. It must offer the product under an SFA exemption to accredited investors. It cannot offer it through its DPT licence alone and must consider whether its borrowing from clients is consistent with its licence conditions. The third is a collective investment scheme requiring a CMS licence for fund management and a restricted scheme notification under s. 305 SFA, which the MPI does not have. The firm can offer the first product immediately. It can offer the second only after an SFA analysis and probably through a separate entity. It cannot offer the third at all without a fund management licence.

Notes

SFA, s. 2(1), definition of "collective investment scheme", paras (a)(i) to (iv). ↩
SFA, s. 305 (restricted schemes offered to accredited investors and certain other persons) and the notification requirement for restricted schemes under the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005. ↩

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.

English

Contact

Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

All Singapore law advice is provided through KGP Legal LLC, an established and duly licensed firm of Singapore advocates and solicitors.

KGP Legal LLC is a medium-sized law firm in Singapore that is capable of providing the full range of legal services and corporate administration work. Please contact me directly at [email protected] if you need any further information.

Get in touch →

Articles and Insights

Setting up or expanding in Singapore?

SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

If you are planning a company incorporation, an investment, a holding structure or a market entry through Singapore, you can reach Dr Ressos directly at [email protected]. Singapore law advice is provided by KGP Legal LLC, a licensed firm of Singapore advocates and solicitors. As a Singapore law practice, KGP Legal LLC is authorised under the Legal Profession Act 1966 to advise on Singapore law and to represent clients before the Singapore courts; foreign law practices with an office in Singapore are, as a rule, not permitted to do either. Dr Ressos and his team facilitate the full range of Singapore legal, compliance and company administration services, including company incorporation, corporate transactions, commercial contracts, crypto and digital assets, financial regulatory work and dispute resolution, including litigation in the Singapore courts. For legal, tax and fiduciary services in Switzerland, see helveticaregister.com.