This article explains how fund tokenization works in practice under Singapore's regulatory framework, from the decisions you make before selecting a fund tokenization platform to what happens after your fund tokens are live.

It draws on MAS's published operational frameworks, the Project e-VCC proof of concept co-led by InvestaX with UBS, State Street, and PwC, and the November 2025 MAS Project Guardian report on operationalising tokenised funds. The goal is to give fund managers a grounded, step-by-step picture of what the process actually involves, and where a regulated fund tokenization platform can take the operational weight off your team. 

Why Singapore for Fund Tokenization

Singapore has been among the pioneering jurisdictions for real world asset tokenization (RWA). According to InvestaX's review of leading jurisdictions for tokenized RWAs and KPMG’s Asset Tokenization C-Suite Playbook, Singapore, the UAE, Hong Kong, Switzerland, the EU, and the US are currently among the most active for regulated tokenized asset activity. 

For fund managers with Singapore as a base or target market, the combination of regulatory clarity, published operational frameworks, and a functioning institutional ecosystem makes it a practical starting point.

Regulatory framework

MAS regulates tokenized RWAs under the Securities and Futures Act (SFA), treating security tokens that represent equity, debt, or investment units as securities under the same framework that applies to conventional capital markets products. Tokenization platforms that touch capital markets products are licensed under the Capital Markets Services (CMS) and Recognised Market Operator (RMO) frameworks, the same licensing structure used by conventional securities brokers and exchanges. This consistency is useful for fund managers already operating within traditional capital markets: the rules are familiar in structure, even where the technology is new.

Active institutional programs

MAS has been running Project Guardian since 2022 in partnership with over 24 financial institutions, piloting tokenized bonds, deposits, and funds. In November 2025, Project Guardian published a detailed operational guide for tokenised funds covering governance, NAV calculation, investor onboarding, and compliance, one of the most detailed public frameworks currently available for fund managers evaluating tokenization.

Two additional MAS initiatives are relevant. Global Layer 1 (GL1), launched in June 2024, focuses on shared-ledger infrastructure standards including common settlement rules and cross-network connectivity so tokenized assets can move across platforms and jurisdictions. BLOOM, launched in October 2025, extends Singapore's settlement infrastructure by enabling real-time, cross-border settlement for tokenized assets.

At the 2025 Singapore FinTech Festival, MAS Managing Director Chia Der Jiun outlined a 10-year strategic vision built around two structural forces: AI and tokenization, signalling that tokenized finance is now part of Singapore's long-term financial infrastructure roadmap.

Singapore's fund tokenization landscape

Several tokenized fund programs have been issued and are actively operating in Singapore, backed by institutions including UBS, Franklin Templeton, Wellington Management, and Phillip Capital, alongside a growing set of licensed platforms and infrastructure providers.

Live tokenized fund issuances in Singapore:

Is Your Fund a Good Candidate for Tokenization?

Before engaging a platform or legal counsel, it is worth being clear on what problem tokenization is meant to solve for your specific fund. The fund types that have seen the most live activity globally are money market funds, private credit funds, and certain private equity vehicles, largely because they have predictable cashflows, institutional familiarity, and clear post-issuance utility such as use as collateral or programmatic distributions. A breakdown of fund types being tokenized today is available separately.

Questions worth asking before you start:

• What specific operational or commercial problem does tokenization solve for your fund? Common answers include: diversifying capital channels, reaching investors in new markets, lowering minimum investment thresholds, enabling secondary market activity, or improving operational efficiency in subscriptions and distributions.
• Does your investor base have the appetite and infrastructure to hold tokens?
• What is your distribution strategy post-issuance? Tokenization can enable secondary trading, but it does not automatically create investor demand or guarantee liquidity, which depend on multiple factors like where the token is listed and how many buyers are actively participating.
• Are the economics of your fund strong enough to attract investors on their own merits? Tokenization can improve how a fund is distributed and serviced, but it does not change the underlying investment thesis. If investor demand for the strategy is weak, a token wrapper will do little to change that.

Example of a well-structured tokenized deal:

Galactica's Pegasus programme, issued and distributed through InvestaX's MAS-licensed platform, offers a concrete reference. Pegasus 1 provided bridge financing for a 145,000 CBM LNG vessel in Indonesia, backed by Kaia DLT Foundation and Korindo Group - a major Indonesian maritime conglomerate. It delivered full repayment of principal plus 10% per annum interest to investors on schedule. Pegasus 2, the programme's second offering, raised USD 1.5 million from accredited investors and closed within four weeks of launch.

The successful execution of both offerings are attributable to several factors, including a real underlying asset with defined commercial use, a financing structure that addressed a genuine capital gap in Indonesian ship financing, and regulated distribution to qualified investors through a licensed platform. The programme demonstrates what a repeatable tokenization model looks like in practice, where the same structure, issuer, and platform can execute multiple transactions with increasing efficiency. 

The common pattern that a fund is a good candidate for tokenization is a specific problem the structure can solve, combined with a reliable distribution path to the right investors.

How Fund Tokens Are Classified Under Singapore Law

Token classification determines your entire compliance path, including licensing requirements, offering documents, investor eligibility, and secondary trading arrangements. Getting clarity on this early, with qualified legal counsel, can help you avoid significant downstream cost.

In Singapore, a tokenized fund that pools investor capital and distributes returns are generally classified as units in a Collective Investment Scheme (CIS) under the Securities and Futures Act.

The key regulatory implications of CIS classification include:

• Offering requirements: Most tokenized fund offerings today are structured as private placements to accredited or institutional investors, which provides an exemption from the full prospectus requirement. Offering documents and investor disclosures are still required.
• Fund manager licensing: The entity managing the fund may require a CMS licence for fund management under the SFA, unless an exemption applies.
• Platform licensing: Any company can create and issue a token using blockchain technology. But to offer that token to investors, the offering party needs to operate under a licensed framework, and to facilitate secondary trading of that token, the platform needs an RMO licence. This is the licensing structure InvestaX operates under, covering both primary issuance and secondary trading within a single regulated environment.

Token classification depends on the structure and rights attached to the token, not just the asset type. MAS has published a detailed Guide on the Tokenisation of Capital Markets Products with case studies covering different token structures. InvestaX's legal team has also published a licensing requirement analysis for asset tokenization that covers the key decision points.

When fund managers work with InvestaX, our legal and compliance team works through the classification and licensing questions directly, so issuers do not need to navigate MAS engagement independently unless the structure genuinely requires it.

Choosing a Fund Structure

The structure you choose affects token classification, regulatory treatment, investor eligibility, and how secondary trading works. Three structures are most commonly used for tokenized funds in Singapore.

Feeder fund structure

A specific share class of an existing fund is digitized and offered as tokens to qualified investors, without restructuring the underlying fund. This is the most common approach for established managers looking to tokenize part of an existing vehicle. Hamilton Lane, Apollo, and Franklin Templeton have all used variations of this model. It limits the operational change required from the fund manager, though it may not support full on-chain liquidity.

Tokenized SPV

The fund assets are held by a Special Purpose Vehicle, and tokens representing interests in the SPV are issued to investors. Investors hold indirect interests in the underlying assets through the SPV. This structure generally fits within existing securities regulations and is commonly used for new fund structures or assets that require ring-fencing.

Variable Capital Company (VCC)

Singapore's VCC framework allows multiple sub-funds to operate under a single legal entity, with ring-fenced assets between sub-funds. It supports both open-ended and closed-ended strategies. Its architecture is particularly well-suited to blockchain-native issuance: the member register is maintained privately by the VCC itself, which means tokens can be issued and updated directly on-chain. Franklin Templeton's OnChain U.S. Dollar Short-Term Money Market Fund, available through InvestaX, uses this structure. Project e-VCC explored it in depth for a closed-ended private equity sub-fund and produced a public report on the findings. 

Key considerations when choosing:

• How much do you want to change your existing fund operations?
• Do you need blockchain-native issuance or is a wrapper structure acceptable?
• What are your distribution targets, and does the structure support them?
• What investor eligibility and disclosure requirements apply to each option?

These decisions are interdependent, and changing the structure after legal work has started adds cost and time. InvestaX's advisory team regularly works through these trade-offs with issuers at the early stage, before platform onboarding begins.

Fund Tokenization Process: From Structuring to Issuance

The fund tokenization process may vary depending on the platform, jurisdiction, and fund structure. In Singapore, the process generally covers the following key stages, from initial structuring through to live issuance. A more detailed walkthrough of the general tokenization process is available here. 

Step 1: Asset selection and fund strategy assessment

Define what you are tokenizing, why, and for whom. For funds, this means confirming the fund type, target investor profile, distribution markets, and the specific problem tokenization is solving. The answers here shape every structural and legal decision that follows.

Step 2: Legal structuring and token design

A legal framework is established to ensure that tokens represent valid claims to the underlying fund interests. This involves defining the rights attached to the token, choosing the appropriate tokenization structure (feeder fund, SPV, or VCC, as covered in Section 4), and confirming the token's classification under Singapore law. 

Also read: Legal Compliance Checklist for The Tokenization of RWAs

Step 3: Licensing and regulatory review

As covered in Section 3, offering tokens to investors requires operating within a licensed framework, and secondary trading requires an RMO-licensed platform. Fund managers working with a licensed tokenization platform in Singapore operate within that platform's existing regulatory permissions for issuance and trading, without needing to obtain their own platform licence. Where a novel structure genuinely requires direct MAS engagement, the platform's compliance team typically coordinates that process.

Step 4: Custody arrangement

Two custody arrangements need to be considered before issuance: custody of the underlying fund assets, through traditional fund custodians or administrators, and custody of the tokens themselves, either through investor self-custody or a licensed digital asset custodian. See Section 7 for a fuller discussion of both options.

Step 5: Offering document preparation

Offering documents for tokenized funds require disclosures beyond what a standard fund PPM or prospectus covers. MAS Project Guardian's operational guide specifically flags the need to disclose tokenization-specific risks: unpredictability of distributed ledger performance, the potential inability to reverse erroneous or fraudulent transactions, and the risk of private key loss. These disclosures should be drafted deliberately, not adapted from a traditional fund template.

Step 6: Token issuance and investor onboarding

The tokenization platform configures the issuance structure: blockchain network, smart contract parameters, investor eligibility rules, and transfer restrictions. Investor onboarding covers KYC/AML verification, accredited investor qualification, and wallet allowlisting for on-chain transfer controls. On a licensed platform, these processes are handled through the platform's compliance infrastructure. Issuers do not need to build separate onboarding systems.

Step 7: Primary issuance and token distribution

Tokens are issued on-chain and distributed to verified investors. Subscriptions are processed, the fund register is updated, and the offering goes live. Post-issuance, ongoing management covers regulatory compliance, NAV updates, distributions, corporate actions, and investor reporting, as discussed in the following section.

Investor Onboarding and KYC/AML

KYC/AML requirements under MAS Notice SFA04-N02 apply to all CMS licence holders. In practice, the onboarding process covers identity verification, source of funds, and sanctions screening, broadly consistent with what fund administrators handle in traditional fund operations.

On InvestaX's platform, investor onboarding is handled end-to-end: identity verification, AI qualification, and wallet allowlisting, where verified wallet addresses are embedded in the smart contract to restrict token transfers to approved investors only. Issuers do not need to run a separate onboarding process. Where an issuer already has an existing fund administrator managing investor records, InvestaX coordinates with that administrator to avoid duplicate KYC screening.

Custody: the Fund Assets and the Tokens

There are two distinct custody questions in a tokenized fund that are worth separating clearly.

Custody of the underlying fund assets remains through traditional channels: licensed custodians, fund administrators, or secure storage providers for physical assets. Tokenization does not change how the underlying assets are held. What changes is how the fund interests representing those assets are recorded and transferred.

Custody of the tokens is the new question. Common options include:

• Self-custody: The investor holds their own private keys. This gives full control but places full responsibility on the investor for key security. Loss of private keys means loss of access with no recovery mechanism.
• Licensed digital asset custodian: A regulated custodian holds the tokens on the investor's behalf, using institutional-grade security including multi-party computation (MPC), hardware security modules (HSMs), and multi-signature controls. This is generally the appropriate choice for institutional investors.

InvestaX works with licensed custodians such as Cactus Custody and Zodia Custody  as custody partners. Where required, custody arrangements can be integrated into the overall issuance structure so investors have a single, coherent access and holding experience.

After Issuance: Secondary Trading and Lifecycle Management

Secondary trading

For tokenized fund interests to be traded on a secondary market in Singapore, the platform facilitating that trading must hold an RMO licence. OTC arrangements between qualified parties are also possible. On InvestaX's platform, secondary trading operates on our RMO-licensed exchange, giving issuers a compliant pathway for investor liquidity from day one. Tokenization can enable secondary trading, but whether it happens in practice depends on investor demand and how well the offering has been distributed.

Lifecycle management

After issuance, the fund still needs to manage subscriptions and redemptions, NAV updates, distributions, corporate actions, and investor reporting. Some of these can be partially automated through smart contracts, for example dividend distributions triggered programmatically at NAV calculation. In practice, MAS Project Guardian's November 2025 report is clear that most live tokenized fund programs today still require coordination between on-chain and off-chain systems across custody, transfer agency, and fund administration.

On InvestaX's platform, lifecycle management support covers on-chain investor record maintenance, corporate actions processing, and reporting. Issuers retain control over fund strategy and investment decisions while the platform handles the digital asset infrastructure layer.

Common Mistakes Fund Managers Make Before They Launch

These observations come from InvestaX's direct experience running tokenizations on a MAS-licensed platform.

• Leaving token classification to the end: Token classification determines the entire compliance path, including licensing, offering documents, investor eligibility, and secondary trading structure. Resolving this with qualified legal counsel before any platform or technology decisions are made saves significant time and cost downstream.
• Underestimating the timeline: Most managers budget time for technology deployment. The longer part of the timeline is typically legal structuring and regulatory review. A realistic estimate from initial decision to live issuance is three to five months for straightforward structures. Novel structures may take longer.
• Building distribution expectations around the token rather than the fund: Secondary market activity depends on investor demand, distribution reach, and platform network. Issuers who actively build their investor distribution before launch consistently see more secondary activity than those who expect liquidity to follow automatically from issuance.
• Undersizing tokenization-specific risk disclosures in offering documents: MAS Project Guardian explicitly identifies risks that must be disclosed: the unpredictability of distributed ledger performance, the potential inability to reverse fraudulent transactions, the risk of ledger manipulation, and the risk of private key loss. These are specific to the tokenized structure and need deliberate drafting, not adaptation from a standard fund offering document.

Frequently Asked Questions about Fund Tokenization in Singapore

What licences does a fund manager need to tokenize a fund in Singapore? 

The fund manager may require a CMS licence for fund management under the SFA, unless an exemption applies. The platform facilitating issuance and secondary trading requires a CMS licence for dealing in securities and an RMO licence. Licensing requirements depend on the specific structure and activities involved. When working with a licensed platform like InvestaX, the platform's existing licences cover the issuance and trading layer. A Singapore-qualified lawyer should confirm the full picture for your specific situation.

Can an existing fund be tokenized, or does a new fund need to be set up? 

Both are possible. Many managers tokenize a specific share class of an existing fund using a feeder structure, without restructuring the underlying vehicle. Others establish a new fund, such as a Singapore VCC, designed for blockchain-native issuance from the outset. The right approach depends on your fund structure, investor base, and operational objectives.

What is the minimum investment for a tokenized fund in Singapore? 

There is no regulatory minimum set by MAS. Most tokenized fund offerings on MAS-licensed platforms are restricted to accredited or institutional investors. Tokenization can lower minimum thresholds compared to traditional private placements, but the specific minimum is the fund manager's commercial decision.

Can tokenized fund tokens be traded on a secondary market in Singapore? 

Yes, where the trading platform holds an RMO licence. OTC arrangements between qualified parties are also possible. The availability of secondary liquidity depends on investor demand and distribution reach.

What blockchain networks are supported for fund tokenization in Singapore? 

MAS takes a technology-agnostic approach and does not mandate a specific network. Most institutional tokenizations in Singapore have used public networks including Ethereum, Polygon, and Hedera, as well as private or permissioned networks for certain programs. InvestaX supports issuance across multiple EVM-compatible chains.

Working with InvestaX

InvestaX is a MAS-licensed regulated asset tokenization platform holding both a Capital Markets Services (CMS) licence and a Recognised Market Operator (RMO) licence. We work with fund managers and asset managers through the full tokenization process, from structuring advisory and legal review through to primary issuance, investor onboarding, and secondary trading on our licensed exchange.

If you are evaluating fund tokenization and want to understand what the process looks like for your specific fund type and structure, contact our team to discuss your requirements.

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