- Major payment institutions (MPIs) will be exempted from the safeguarding obligation under the Payment Services Act 2019 (PS Act) when providing cross-border money transfer services with no strong Singapore nexus.
- Anti-money laundering/countering the financing of terrorism (AML/CFT) requirements for licensed and exempt payment services providers (PSPs) will be updated in light of amendments to the PS Act.
- PSPs will need to submit more data in their periodic regulatory reports in light of amendments to the PS Act.
- General conduct and risk warning requirements for PSPs will be updated in light of amendments to the PS Act.
- Grandfathering provisions to exempt specific entities from the amendments to the PS Act for six months will be introduced via the forthcoming Payment Services (Exemption for Specified Period) Regulations 2023.
- Entities looking to rely on the grandfathering provisions will need to comply with additional requirements to showcase their ability to meet licensee obligations under the PS Act.
On 8 May 2023, the Monetary Authority of Singapore (MAS) published a Consultation Paper (the Paper) setting out its proposals to operationalise amendments to the PS Act that will take effect when the Payment Services (Amendment) Act 2021 (PS (Amendment) Act) comes into force.
For context, the PS (Amendment) Act was introduced to align Singapore’s payment services regulatory framework with the Financial Action Task Force’s Recommendations by, among others, amending the PS Act to expand the scope of domestic and cross-border money transfer services, and digital payment token (DPT) services (collectively, the Newly Scoped-in Payment Services). While the PS (Amendment) Act was passed in Parliament on 4 January 2021, it has yet to come into force, meaning that the amendments to the PS Act have not taken effect. In publishing the Paper, the MAS has now taken a step towards operationalising and implementing the amendments to the PS Act.
Broadly, the Paper proposes to amend the following regulations and notices:
- The Payment Services Regulations 2019 (PS Regs)
- MAS Notice PSN01 Prevention of Money Laundering and Countering the Financing of Terrorism – Specified Payment Services (Notice PSN01)
- MAS Notice PSN02 Prevention of Money Laundering and Countering the Financing of Terrorism – Digital Payment Token Service (Notice PSN02)
- MAS Notice PSN04 Submission of Regulatory Returns (Notice PSN04)
- MAS Notice PSN07 Conduct (Notice PSN07)
- MAS Notice PSN08 Disclosures and Communications (Notice PSN08)
This client alert summarises the key proposals set out in the Paper.