Monetary Authority of Singapore issued a clarification saying that it will regulate offerings of digital tokens in the city if the tokens constitute products regulated under Singapore's Securities and Futures Act.

The regulator noted that its clarification follows a recent rise in the number of initial coin offerings, or ICOs, in Singapore.

The MAS said that while it does not regulate virtual currencies, the function of digital tokens has evolved beyond just being a virtual currency, such as tokens representing ownership or a security interest over an issuer's assets or property. It added that such tokens may be considered an offer of shares or units in a collective investment scheme under Singapore's Securities and Futures Act.

The regulator said that issuers of digital tokens that can be considered securities need to register a prospectus with the MAS prior to the offer of such tokens. Such issuers are also subject to licensing requirements under Singapore's laws.

In addition, platforms facilitating secondary trading of tokens that can be considered securities have to be an approved exchange or a recognized market operator, the regulator said.