Fintech Market Overview

This article does not constitute legal advice.

Smart contracts in Singapore

Fintech Software

There is no mandatory Singapore law that disqualifies self-executing contracts or 'smart contracts' (i.e., those that automatically self-execute if certain conditions are met), from being valid and enforceable under Singapore law.1

There is no special legal framework that applies specifically to such contracts. These contracts would, of course, need to be valid under general law (e.g., the contract must fulfil the key elements for the formation of contract under Singapore law, including offer and acceptance, consideration and intention to create legal relations).1

It is possible to enter into contracts electronically under Singapore law. Subject to exceptions, the general rule under the Electronic Transactions Act 2010 (ETA) is that information shall not be denied legal effect, validity or enforceability solely on the grounds that it is in the form of an electronic record. The ETA also provides that in the context of the formation of contracts, an offer and the acceptance of an offer may be expressed by means of electronic communications. Where an electronic communication is used in the formation of a contract, that contract shall not be denied validity or enforceability solely on the grounds that an electronic communication was used for that purpose. A correction mechanism such as arbitration and mediation can be made available – the dispute resolution method could be encoded into the contract.1

Notably, in March 2021, the ETA was amended to adopt, with modifications, the United Nations Commission on International Trade Law Model Law on Electronic Transferable Records. The amendments allow for Part II of the ETA, which contains provisions supporting the legal enforceability of electronic records and signatures, to apply to negotiable instruments, documents of title, bills of exchange, promissory notes, consignment notes, bills of lading, warehouse receipts or any transferable document or instrument that entitles the bearer or beneficiary to claim the delivery of goods or the payment of a sum of money.1

A fully automated investment process (e.g., 'robo-advice') and third-party websites providing advice, recommendations or an opinion on financial products may fall within the scope of regulated activities in Singapore, although the precise scope of the investment process and the particular financial products being offered will affect the analysis. Fintech companies that intend to offer these products and services should consider whether they will require a licence and whether licensing exemptions may be relied on (if so desired). Both of these models will also be subject to intellectual property and data protection considerations, as further discussed in Section VII.1

Client identification in Singapore

Fintech in Singapore

Fintech in other countries

  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/singapore
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