Singapore Exchange (SGX) has clarified the rules for publicly listed companies planning to conduct initial coin offerings (ICOs).

In a column published Thursday, Tan Boon Gin, CEO of the stock exchange’s regulatory subsidiary, SGX RegCo, stressed that any tokens launched in an ICO are not listed on the SGX and that these rules are applicable only for the companies themselves.

As per the guidelines, any listed company planning to hold an ICO is required to consult with SGX RegCo in advance, as well as provide a legal opinion on the nature of tokens and an auditor’s opinion on how the ICO should be treated for accounting – both from “reputable” firms.

Companies are also required to make certain disclosures, including the rationale behind the ICO, the risks involved, how the raised funds would be used, planned know-your-customer (KYC) and anti-money laundering (AML) checks, and any impact on existing shareholders’ rights.

They also need to ensure that ICOs are “properly” accounted for in their financial statements and that associated risks have been addressed.

Further, if the tokens are considered securities under the country’s Securities and Futures Act (SFA), issuers are required to complete prospectus registration and licensing procedures. Firms may also be required to form a subsidiary to carry out the ICO.

Finally, SGX RegCo expects listed issuers of ICOs to “safeguard” their own interests and that of shareholders. “The issuer’s board is ultimately responsible for maintaining a robust system of risk management and internal controls,” Gin said.

Back in August, Y Ventures Group became Singapore’s first public firm to hold an ICO, which aimed to raise $50 million for creating a blockchain-based e-commerce system.

To date, however, no token considered a security has been approved in the country by the Monetary Authority of Singapore (MAS), as Damien Pang, head of the MAS technology infrastructure office for fintech and innovation, told CoinDesk at a Consensus conference in September.

SGX image via Shutterstock