The Monetary Authority of Singapore (MAS) on Tuesday introduced amendments to the Payment Services Act (PS Act) and its subsidiary legislation to expand the scope of payment services regulated by MAS, and to impose user protection and financial stability-related requirements on digital payment token (DPT) service providers, an official news release stated.
These amendments will take effect in stages from 4 April 2024.
The amendments will bring the following activities within the scope of regulation under the PS Act:
- Provision of custodial services for DPTs.
- Facilitation of the transmission of DPTs between accounts and facilitation of the exchange of DPTs, even where the service provider does not come into possession of the moneys or DPTs.
- Facilitation of cross-border money transfer between different countries, even where moneys are not accepted or received in Singapore.
MAS stated that the amendments will empower it to impose requirements relating to anti-money laundering and countering the financing of terrorism, user protection and financial stability on DPT service providers.
Transitional arrangements will be provided for entities currently conducting activities under the PS Act’s expanded scope. Such entities must notify MAS within 30 days, and submit a licence application within six months from 4 April 2024, if they wish to continue the activities on a temporary basis while MAS reviews their licence applications.
The licence application must be accompanied by an attestation report of the entity’s business activities and compliance with anti-money laundering and countering the financing of terrorism requirements, duly completed by a qualified external auditor, within nine months from 4 April 2024.
Entities that do not fulfil the requirements above are required to cease the activities when the amendments come into effect.
The amended Payment Services Regulations on safeguarding of assets belonging to customers of DPT service providers will take effect six months from 4 April 2024. These include segregating customers’ assets and placing them in a trust account for the benefit of customers, maintaining proper books and records, and ensuring that effective systems and controls are in place to protect the integrity and security of customers’ assets.