The Monetary Authority of Singapore (MAS) has issued a consultation paper proposing a significant strengthening of its powers in various areas. If adopted, the proposals will expand the MAS’ investigative powers, allow the MAS to reprimand persons for misconduct even after they leave a financial institution (FI) or the financial industry, and enhance the MAS’ ability to require FIs to manage risks arising from unregulated business. These amendments represent an important expansion of the MAS’ ability to investigate instances of misconduct and address risks arising from the activities of FIs.
1. Overview of proposals
The proposals are set out in a consultation paper published by the MAS on 2 July 2021. The relevant changes are intended to be introduced through amendments to the new Omnibus Act for the Financial Sector (which has not yet been tabled for reading in parliament) and amendments to existing MAS-administered frameworks.1 The deadline for responses to the consultation is 1 August 2021.
We set out below some of the key proposed amendments. FIs affected by these amendments include banks, capital markets intermediaries, financial advisers, insurers and payment service providers, among others.
(a) Enhancements to the MAS’ investigative powers
The MAS’ investigative powers are proposed to be enhanced in the following areas:
- Information-gathering: In connection with an investigation of an FI, the MAS would be given the power to obtain information from any person (e.g., ex-employees of the FI), in addition to the FI itself. This would broaden the MAS’ ability to gather evidence relating to misconduct and prevent such evidence from being moved outside the MAS’ reach.
- Verbal interviews and statements: Various MAS-administered frameworks would be expanded and aligned to ensure that the MAS can require any person to appear for verbal examination and statement-recording. This would enhance the efficacy of investigations conducted by the MAS and provide an additional tool for the gathering of evidence of misconduct.
- Compelling persons to appear for examination: The newly proposed powers would allow the MAS to secure examinees’ attendance at interviews and, if required, obtain a warrant to enforce such attendance.
- Written record of examination: Various MAS-administered frameworks would be amended to specify when the MAS must provide an examinee with a copy of a written record of examination. The proposed approach is to formalise the MAS’ existing practice of providing an examinee with such a copy at a time the MAS determines appropriate, when the disclosure will not prejudice ongoing investigations.
- Entering premises without a warrant: An MAS investigator or authorised officer would be permitted to enter any premises without a warrant based on reasonable suspicion that the premises are, or have been, used by a person under investigation by the MAS. This power would not, however, allow the MAS to use force to gain entry. The MAS would also be able to require any person on the premises to produce evidence considered relevant to the investigation or to state where such evidence can be found. The MAS would no longer be required to provide notice of its intention to enter premises (as it currently must do under certain frameworks).
- Obtaining a court warrant to seize evidence: The MAS’ powers would be harmonised across various frameworks to allow it to obtain a warrant to seize evidence from premises when a person has failed to comply with an order to produce evidence, and/or if there is reasonable cause to believe that the evidence in question could be concealed, removed, tampered with or destroyed if such an order is made.
- Transfer of evidence between authorities: The MAS works closely with the Commercial Affairs Department of the Singapore police to conduct criminal investigations, and refers appropriate cases to the attorney general’s chambers for decision-making on criminal prosecution and civil penalty actions. To facilitate law-enforcement, relevant MAS-administered frameworks would be amended to expedite the transfer of evidence between the MAS, the police and the public prosecutor.