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Read more informationSingapore: Payment Services (Amendment) Bill
The Monetary Services Authority (MAS) has introduced changes in the Payment Services Act, 2019 (PS Act) to align the regulatory regime of the country with the guidance issued by the Financial Action Taskforce (FATF) on Anti-Money Laundering and Countering Financial Terrorism.
Summary
Payment service providers, as mentioned under the Act, are required to hold a license and comply with the provisions enumerated thereunder concerning risks of entering into a transaction with payment services associated with businesses. These requirements are laid down to mitigate risks and curb threats that may arise out of activities like money laundering, terrorist financing activities, cyber risks, etc.
MAS, being the regulatory authority under the Act, has laid down certain amendments addressing the risks posed by Virtual Asset Service Providers (VASPs), which are not regulated by financial institutions. There arose a need to include VASPs under the law's ambit due to its vulnerability owing to its cross-border nature coupled with anonymity and speed.
Further, MAS has also proposed introducing amendments to counter terrorist financing and money laundering activities along with imposing measures on digital payment tokens (DPT).
Key Amendments
Amendment of the framework related to VASPs
VASPs include activities carried out for; exchanging, transferring, safekeeping, administering, or enabling control over virtual assets.
In keeping with the international objective of the FATF to curb activities that carry risks of money laundering and terrorism financing, the Bill seeks to expand the definition of the Digital Payment Tokens (DPT). The definition is proposed to include the following;
Addressing risks associated with AML/CFT
The Bill proposes to expand the definition of cross-border money transfer services to cover entities in different countries. Depending on the reputational risks and factors surrounding ML/TF, licenses subject to MAS' AML/CFT regulations are to be acquired.
Imposing measures on DPT
Growth of the DPT sector has called for increased regulation of the same by MAS. MAS regulates DPT services primarily for curbing risks associated with ML/TF. To ensure the risks associated in addition to that are mitigated promptly, the Bill empowers MAS to impose;
Miscellaneous measures
Other amendments include;