The Guidelines require the operator’s board of directors to be fit and proper and have the ability to operate an orderly, fair and transparent market. As the operator plays a critical role in ensuring confidence in the ECF platform, the Guidelines entrust the operator with obligations to ensure issuers’ compliance with platform rules. The operator may deny an issuer access to its platform if it is of the view that the issuer or the proposed offering is not suitable to be hosted on the platform. The operator is also required to ensure that funds obtained from investors are safeguarded in a trust account until the funding goal is met.

ECF investors are given a 6-day cooling off period, within which they may withdraw the full amount of their investment. In addition, if there is any material adverse change relating to an issuer, the investors must be notified of such change. The investors will be given the option to withdraw their investment if they choose to do so within 14 days after the said notification.

In September 2014, SC released its public response paper on the proposed ECF framework having reviewed the comments and feedback received from various stakeholders on the proposed ECF framework.

ECF is a new form of fundraising that allows start-up or other smaller enterprises to obtain capital through small equity investments from relatively large numbers of investors, using online portals to publicise and facilitate such offers to crowd investors.

The Guidelines on Regulation of Markets under S.34 of CMSA are available here. These Guidelines will replace the Guidelines on Regulation of Markets (issued in September 2007) and is effective on 10 February 2015.