Clarifications on licensing under Part 9 of Financial Services and Markets Act 2022

11 June 2025

On 30 June 2025, Part 9 of the Financial Services and Markets Act 2022 (“FSMA”) and other miscellaneous provisions will come into effect. A licence under Part 9 of the FSMA may be required in the following circumstances:

  • Persons that are affected are (i) Singapore incorporated companies; or (ii) individuals or partnerships acting from a place of business in Singapore (“Affected Persons”);
  • The activity of the Affected Persons falls within the scope of regulated “digital token” (“DT”) services defined in the FSMA; and
  • The services are provided by the Affected Persons to customers outside Singapore.

On 6 June 2025, the Monetary Authority of Singapore (“MAS”) published a media release clarifying the scope of regulation under Part 9 of the FSMA.

We set out some clarifications on the scope and applicability of Part 9 of the FSMA, based on common queries that we have encountered.

1. If you are an Affected Person, as a preliminary step, you should consider whether (a) the class of assets that you are dealing in, and (b) the scope of services that you undertake (in respect of these assets), will amount to regulated activities. If the assets that you are dealing in and the services that you perform in respect of these assets do not amount to regulated activities under the Payment Services Act 2019 (“PS Act”), the Securities and Futures Act 2001 (“SFA”), or the Financial Advisers Act 2001 (together, “Main Acts”) and Part 9 of the FSMA, you do not need to be licensed or exempt (from licensing) under the Main Acts or Part 9 of the FSMA. As an illustration of the above, a person acting as a broker for the sale and purchase of non-fungible tokens (“NFTs”) (between buyers and sellers), who does not handle or facilitate any settlement of the transactions (whether in fiat currency or digital payment tokens (“DPTs”)), is unlikely to be construed as undertaking regulated activities under the Main Act or Part 9 of the FSMA. The NFT broker may simply be matching orders for the sale of an NFT, leaving the settlement payments to be undertaken entirely by the buyer and seller. Such an activity, even though involving a “token”, will not involve DPTs, as defined under the PS Act, or capital markets products (whether in token form or otherwise). Activities involving DPTs or capital markets products are generally regulated under the Main Acts (and covered under the FSMA). The activity of the NFT broker also does not involve the NFT broker providing any payment service under the PS Act, since the NFT broker does not facilitate the sending or receiving of any fiat currency payments (or DPT payments) on behalf of the buyer or the seller, as the case may be.

2. While the example in the preceding paragraph deals with an asset class (and its corresponding service) (i.e. NFTs) that is not regulated under the Main Acts and Part 9 of the FSMA, one should note that there may be asset classes (and their corresponding services) that are regulated under the Main Acts but not Part 9 of the FSMA. In general, the asset classes regulated under the Main Acts are broader than those covered under Part 9 of the FSMA. Therefore, even if an asset class falls outside the scope of Part 9 of the FSMA, one should still consider if such activity amounts to a regulated activity under the Main Acts. Part 9 of the FSMA covers “digital tokens”. This refers to both (a) DPTs (e.g. cryptocurrencies such as Bitcoin, Ether, and Litecoin, as well as single-currency stablecoins such as USDC and USDT); and (b) tokens of capital market products (e.g. tokenised equities, tokenised debentures, and tokenised units in fund). Part 9 of the FSMA does not cover “conventional” capital markets products (i.e. capital markets products that are not in “token” form). If one is handling assets that do not fall within the definition of “digital token”, then it is likely that Part 9 of the FSMA will not apply. Having said that, if the assets being handled are financial instruments, other Acts (e.g. the Main Acts) may still apply to your activities. By way of illustration, if you are providing securities brokerage services in relation to conventional, non-tokenised equities, such an asset class is not a “digital token” under the FSMA (since, in the current context, this only applies to a digital representation of an equity that can be transferred, stored, or traded electronically). However, even though Part 9 of the FSMA will not apply to the activity, you may still be conducting a regulated activity under the SFA, triggering licensing requirements unless exempt (from licensing).

3. If you are an Affected Person and you believe your activities may constitute regulated activities (e.g. the services that you provide to customers involve assets that are DPTs or capital markets products (whether in token form or otherwise)):

a. You should, in the first instance, consider whether you require a licence under the Main Acts (including whether you meet the standards for licensing under the Main Acts and whether your business has a strong “nexus” to Singapore such as servicing customers in Singapore), or whether you can rely on a licensing exemption under the Main Acts.

b. Alternatively, you may wish to consider whether it is possible to restructure your activities, such that they do not amount to regulated activities in Singapore.

c. This should be your primary focus, as Part 9 of the FSMA is not meant to be an alternative licensing regime to the licensing regimes under the Main Acts. There will only be extremely limited circumstances under which MAS will grant an FSMA licence, and MAS has said that it will generally not be issuing licences under the FSMA.

4. If you are an Affected Person and you are already licensed or exempt (from licensing) under the Main Acts:

a. You will likely be exempt from licensing under the FSMA (for the same activity that you are licensed or exempt from under the Main Acts).

b. You will generally not be restricted from offering your regulated services to customers outside of Singapore, but you should check whether your activities (in respect of these customers outside of Singapore) trigger issues of foreign law.

5. If you are an employee of a foreign company (i.e. the company that employs you is not a Singapore-incorporated company) and you are resident in Singapore, the work you do for that foreign company should not in itself trigger FSMA licensing requirements.

a. However, you should consider whether your activities in Singapore are regulated and trigger regulatory issues under the Main Acts, in respect of the foreign company.

b. For example, some provisions in the Main Acts provide for extraterritorial effect (e.g. section 339 of the SFA provides for the extraterritorial effect of provisions in the SFA, including licensing requirements, if acts are done “partly in” Singapore).

c. A company (even a foreign company) may also be viewed as operating a business “in Singapore” if it has employees located predominantly in Singapore.

Reference materials

The following materials are available on Singapore Statutes Online sso.agc.gov.sg and the MAS website www.mas.gov.sg:

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