MAS tells fintech platforms to communicate underlying products in investment accounts clearly: sources

[Singapore] Fintech platforms have been told by the Monetary Authority of Singapore (MAS) to clearly communicate underlying products in their investment accounts clearly.

This move is likely a response to the Chocolate Finance incident, when a pause on instant withdrawals due to a redemption run resulted in confusion by customers and online commenters on whether Chocolate Finance is a bank.

In an earlier interview with The Business Times, Chocolate Finance founder Walter de Oude said that “customers don’t read the fine print”, even if the asset manager has done everything it has supposed to.

According to sources familiar with the matter, fintech business leaders were called for one-on-one meetings with the regulator last week to communicate this stance. MAS appears to want consumers to be clear that a fintech platform that offers underlying banking products does not equate to it being a bank.

Fintech platforms now offer a plethora of investment options for retail investors, who can put in cash or money from their Central Provident Fund. Most of these players’ cash options go into an investment account that will buy into money market funds. Some offer accounts with underlying fixed deposit products that find the best fixed deposit rate across the banks.

BT has reached out to MAS for comment.