The Monetary Authority of Singapore (MAS) has amended the Payment Services Act (PSA) and its subsidiary legislation taking effect in stages from April 4.
This is done to expand the scope of payment services regulated by the MAS as well as to impose user protection and financial stability-related requirements on digital payment token (DPT) service providers.
The amendments will bring the following activities within the scope of regulation under the PSA — provision of custodial services for DPTs; facilitation of the transmission of DPTs between accounts and facilitation of the exchange of DPTs; and facilitation of cross-border money transfer between different countries, even where monies are not accepted or received in Singapore.
This allows the MAS to impose requirements relating to anti-money laundering and counter-terrorism financing (AML/CFT), user protection and financial stability on DPT service providers.
Transitional arrangements will be provided for entities currently conducting activities under the PSA’s expanded scope. These entities must notify MAS within 30 days and submit a licence application within six months from April 4 if they wish to continue activities on a temporary basis while the MAS reviews their licence applications.
The application must be accompanied by an attestation report of the entity’s business activities and compliance with AML/CFT requirements, duly completed by a qualified external auditor within nine months from April 4. Entities that do not fulfil the requirements are required to cease the activities when the amendments come into effect.
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The amended Payment Services Regulations on safeguarding of assets belonging to customers of DPT service providers will take effect six months from April 4. 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.
