Singapore Minister of State Alvin Tan Reply for MAS Chairman Gan Kim Yong on Investment Platform Liquidity, Withdrawal, Risks & Marketing Strategies: 1) Investment Platforms Operating as Digital Advisors are Licensee (CMSL) & Required to Separate Customers Assets by Licensed Custodians, 2) The Recent Incident Triggered Due to Unsustainable High Usage of Platform Providing Instant Withdrawal & Allowing to Spend on Debt Card Linked to Value of Underlying Investments, 3) Disclosure to Vary or Stop Features in Terms & Conditions But May Not be Effective in Providing Full Understanding of Products to Customers
11th April 2025 | Hong Kong
Singapore Minister of State and Monetary Authority of Singapore (MAS) Board Member Alvin Tan reply for Singapore Deputy Prime Minister & Monetary Authority of Singapore (MAS) Chairman Gan Kim Yong to Singapore Parliamentary question (8/4/25) on investment platform liquidity, withdrawal, risks & marketing strategies – 1) Investment platforms operating as digital advisors are licensee (CMLS) & required to separate customers assets by licensed custodians, 2) The recent incident triggered due to unsustainable high usage of platform providing instant withdrawal & allowing to spend on debt card linked to value of underlying investments, 3) Disclosure to vary or stop features in terms & conditions but may not be effective in providing full understanding of products to customers. Alvin Tan (8/4/25): “Investment platforms operating as digital advisers that manage investment portfolios on behalf of customers, are licensed as Capital Markets Services Licensees (“CMSLs”) under the Securities and Futures Act. They offer portfolios which are invested into funds managed by other licensed fund management companies. These investment platforms are required by regulation to keep customers’ assets legally separate and safekept by licensed custodians. The recent incident involving a surge in withdrawals from an investment platform illustrate that the safeguards worked as intended. Customers’ assets were properly segregated from the platform and requests for withdrawal were redeemed in an orderly manner, within the standard fund redemption timeframe of three to six working days. Customers received the market value of their investments within the typical three to six days. In the specific case mentioned above, the investment platform offered two unique features, which they marketed prominently to customers. First, it offered instant withdrawals for customers, up to a limit per account. Second, it allowed customers to spend on a debit card that was linked to the value of their underlying investments. The platform stopped both these features when the high usage of both these features became unsustainable for it to support. The conditions and limitations of these features, including the ability of the investment platform to vary or stop these features, were disclosed in the product terms and conditions. But these disclosures may not have been effective in providing customers a full understanding of the product.While product features do not always require regulatory approval, there are regulatory requirements in place for robust risk management and clear disclosures, especially where they impact a firm’s operations. MAS is reviewing this particular case against these requirements, as well as more generally how to ensure investment platforms implement these requirements effectively.”
“ Singapore Minister of State Alvin Tan Reply for MAS Chairman Gan Kim Yong on Investment Platform Liquidity, Withdrawal, Risks & Marketing Strategies: 1) Investment Platforms Operating as Digital Advisors are Licensee (CMSL) & Required to Separate Customers Assets by Licensed Custodians, 2) The Recent Incident Triggered Due to Unsustainable High Usage of Platform Providing Instant Withdrawal & Allowing to Spend on Debt Card Linked to Value of Underlying Investments, 3) Disclosure to Vary or Stop Features in Terms & Conditions But May Not be Effective in Providing Full Understanding of Products to Customers “
In 2025 March – Chocolate Finance
In 2025 March, Singapore finance investment startup & fund manager Chocolate Finance reported nearly $373 million (S$500 million) outflow representing 40% of assets. Earlier in 2025 March, Chocolate Finance temporarily stopped instant withdrawal & card transaction services due to increased transaction volume, issuing a statement of fund redemption typically taking 3 to 10 business days to settle. Chocolate Finance provides SGD deposits with interest rate of 3.3% p.a. on the first SGD 20,000, 3% p.a. on next SGD 30,000 & target 3% p.a. thereafter. USD deposits with interest rate of 4.8% p.a. on first USD 20,000, 4.3% p.a. on next USD 30,000 & target 4.3% p.a. thereafter. Chocolate Finance was founded in 2024 by Singapore insurer Singlife founder & ex-HSBC Insurance Singapore CEO Walter de Oude. On 12th March 2025, the Monetary Authority of Singapore (MAS) has released a statement (12/3/25) on Chocolate Finance temporarily stopping instant withdrawal & card transaction services – 1) Online robo advisory Chocolate Finance (operated by Chocfin) & independent fund custodian Allfunds had issued a joint statement on security of fund holdings & orderly processing of withdrawals, with both companies confirming customers’ monies are intact and not used to meet company liabilities. In 2025 February, Chocolate Managed Account was reported to be reaching S$1 billion ($750 million) AUM. Chocolate Finance – Founded by Walter de Oude, the founder of Singapore Life (Singlife), Chocolate Finance is a happy place for your spare cash where you can enjoy 3.3% p.a. on your first S$20k, 3% p.a. on your next S$30k, and a target 3% p.a. on any amount thereafter. No lock-in periods. No hoops or complex criteria. No minimum or maximum balance requirements. See your returns in the app every, single, day. Withdraw anytime. What’s more? If we don’t make the target returns for your first S$50k, the difference will be topped up during the qualifying period. Does it get any better than that? Chocolate Finance is a brand under Chocfin Pte Ltd, regulated by the Monetary Authority of Singapore (CMS101452) with a Capital Market Services license. We invest in a carefully selected portfolio of fixed-income funds, optimising risk-adjusted returns by analyzing factors like duration, yield, credit quality, and currency. It only takes a few minutes to get started – download the app, sign up with your mobile OTP, and verify your identity via Singpass. Once you’ve added money, you’ll see your daily returns the very next day!
Singapore Minister of State Alvin Tan Reply for MAS Chairman Gan Kim Yong on Investment Platform Liquidity, Withdrawal, Risks & Marketing Strategies: 1) Investment Platforms Operating as Digital Advisors are Licensee (CMSL) & Required to Separate Customers Assets by Licensed Custodians, 2) The Recent Incident Triggered Due to Unsustainable High Usage of Platform Providing Instant Withdrawal & Allowing to Spend on Debt Card Linked to Value of Underlying Investments, 3) Disclosure to Vary or Stop Features in Terms & Conditions But May Not be Effective in Providing Full Understanding of Products to Customers
Date: For Parliament Sitting on 8 April 2025
Name and Constituency of Member of Parliament
Mr Mark Lee, Nominated Member of Parliament
Mr Saktiandi Supaat, Bishan-Toa Payoh GRC
Questions
Mr Mark Lee: To ask the Prime Minister and Minister for Finance (a) how does MAS ensure that financial technology platforms and non-bank financial institutions offering high-yield investment products maintain sufficient liquidity and manage fund withdrawal risks; (b) whether MAS is considering additional safeguards to enhance consumer protection for retail investors engaging with such platforms, given recent liquidity challenges faced by fintech firms; and (c) what measures are in place to ensure that the public fully understands the risks of using financial services from non-bank entities, particularly fintech platforms offering investment-linked products.
Mr Saktiandi Supaat: To ask the Prime Minister and Minister for Finance (a) what steps is MAS taking to ensure financial institutions and fintech companies (FIFCs) provide clear, accurate and timely communication regarding changes to their products and services; (b) what measures are in place to encourage FIFCs to adopt responsible marketing strategies, avoid overpromising on returns or benefits and avoid offering overly attractive promotional offers to customers; and (c) how does MAS ensure that fintech companies adhere to the same standards of risk management and consumer communications as banks.
Answer by Mr Alvin Tan, Minister of State, Ministry of Trade and Industry and Ministry of Culture, Community and Youth, and Board member of MAS, on behalf of Mr Gan Kim Yong, Deputy Prime Minister and Minister for Trade and Industry, and Chairman of MAS:
1. Mr Speaker, with your permission, I would like to take Questions 7 and 8 together please, as they touch on similar issues.
2. Mr Speaker, investment platforms operating as digital advisers that manage investment portfolios on behalf of customers, are licensed as Capital Markets Services Licensees (“CMSLs”) under the Securities and Futures Act. They offer portfolios which are invested into funds managed by other licensed fund management companies. These investment platforms are required by regulation to keep customers’ assets legally separate and safekept by licensed custodians. The recent incident involving a surge in withdrawals from an investment platform illustrate that the safeguards worked as intended. Customers’ assets were properly segregated from the platform and requests for withdrawal were redeemed in an orderly manner, within the standard fund redemption timeframe of three to six working days. Customers received the market value of their investments within the typical three to six days.
3. In the specific case mentioned above, the investment platform offered two unique features, which they marketed prominently to customers. First, it offered instant withdrawals for customers, up to a limit per account. Second, it allowed customers to spend on a debit card that was linked to the value of their underlying investments. The platform stopped both these features when the high usage of both these features became unsustainable for it to support.
4. The conditions and limitations of these features, including the ability of the investment platform to vary or stop these features, were disclosed in the product terms and conditions. But these disclosures may not have been effective in providing customers a full understanding of the product.While product features do not always require regulatory approval, there are regulatory requirements in place for robust risk management and clear disclosures, especially where they impact a firm’s operations. MAS is reviewing this particular case against these requirements, as well as more generally how to ensure investment platforms implement these requirements effectively.
5. We urge customers to fully understand the features (including key terms and conditions) and risks of a financial product, before deciding to invest in it.Customers should also seek professional financial advice on the suitability of a product if they are unclear of its features. We also encourage customers to refer to our MoneySense website to learn more about what to look out for in an investment.
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