Update as of 4 January 2021
The Payment Services (Amendment) Bill (now, the “Act“) has been passed in Parliament after its Second Reading on Monday, 4 January 2021. The amendments to the PS Act have not taken effect and will come into force on a date yet to be announced.
On 2 November 2020, the Payment Services (Amendment) Bill (the “Bill”) was introduced to amend the current scope of the Payment Services Act No. 2 of 2019 (the “PS Act”).
According to the explanatory brief issued by the Monetary Authority of Singapore (“MAS”), the Bill seeks to introduce legislative amendments to the PS Act to align Singapore’s current regulatory regime with the guidance issued by the Financial Action task Force (“FATF”) on Anti Money Laundering and Countering the Financing of Terrorism (“AML/CFT”) for Virtual Asset Service Providers (“VASPs”).
Key Amendments in the Bill
Under the Bill, the definition of Digital Payment Token (“DPT”) services will be expanded to include the following:
Payment service providers engaging in any of the above DPT services will need to be licensed under the PS Act and be subject to MAS’ AML/CFT regulations.
Recognising the growth potential of the DPT sector, the Bill ensures that MAS is equipped to implement appropriate measures to mitigate new risks in a timely manner. This includes inter alia:
Under the current regime, cross-border money transfer services are only regulated if they accept or receive money in Singapore. This is set to change under the Bill which seeks to further address AML/CFT risks by regulating service providers that broker money transfers between entities in different countries although moneys are not accepted or received in Singapore.
The Bill will introduce the following additional amendments to the PS Act:
(a) allow MAS to prescribe an additional subset of payment services or class of licensees to which the requirement to safeguard customer money can be extended to;
(b) broaden the definition of domestic money transfer service to include situations where either the payer or the payee is a financial institution (as opposed to the current definition which only includes the situation where both the payer and payee are not financial institutions); and
(c) provide that the general duty to use reasonable care not to provide false information to MAS applies to all persons, whether or not the person is an individual.
Exemption Period of 6 months granted
Payment service providers falling within the regulatory purview of the amended PS Act, or licensees who need to vary their license will be granted an exemption for six (6) months by the MAS as a result of the Bill.
This update is provided to you for general information and should not be relied upon as legal advice.
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