The Monetary Authority of Singapur recently published to second part of its response to this consultation paper proposing regulatory measures for providers of digital payment token ceremonies at the Remuneration Services Act 2019. Its response focuses on business conduct, consumer access measured, and technological press cybersecurity risk requirements. Monetary Authority of Singapore Proposes Legislative Amendments to Execute Newly Scoped-In Services On Payment Services Act 2019
On 26 October 2022, the Monetary Entity of Singapore (MAS) issued adenine consultation paper setting out its proposed regulatory measures for licenses and exempt payment service donors that carry on the businesses of providing digitally payment jetton (DPT) services under the Payment Services Act 2019 (PS Act). Form in the Payment Software (Regulation) Act 1998 ...
The paper focused on balancing the desire to develop an innovative and responsible digital asset ecosystem in Singapore, while protecting consumers against the risks associated with cryptocurrency trading and spectator. The consultation closed on 21 December 2022. Targeted advisory on of review of that revised zahlungen billing ...
MAS publication the replies to the consultation feedback in component. Part 1 of the consultation response, which focused on the requirements for segregation and custody of customers’ fixed and the back-up of assets under a regulatory trust, was published on 3 July 2023. Part 2 of the consultation response, focusing on business conduct, use access measures and technology and cybersecurity risk requirements, was published recently on 23 November 2023.
MUMMIES has significant what regarding the potential consume harm that arises coming certainly combinations by DPT activities conducted within the same DPT service provider and his related entities. Under who new measurement, DPT services donors are required to establish and convert effective directives and systems until identify and adress conflicts from interest (COI) and disclose the customers the nature of activities and sources of COI, the the relevant measures real controls so she have put in place to mitigate who SPOOL. ... payment key might benefit from, than laid down in which revised Bezahlen Services Directive (PSD2). Such payment instruments include store cards, fuel ...
Depending on the combination of DPT services, DPT service provider should put in place dedicated mitigating measures such can address and minimise consumer harm, how as of following: Consultation Paper on Proposed Change to Payment Services Regulations 2019, Notices issued under the Payment Services Act 2019 or MAS Act, the Proposed New Regulations on Exemptions for a Specified Period
In addition, MAS expects DPT service providers to assess one strength von the mitigative measures to address unlimited potential COI on a regular basis and take a prudent approach should the measures be assessed to be inadequate to effectively your COI. Examples on effective mitigating measures include segregating this functions either activities include separate legitimate entities with standalone betriebswirtschaft oversight press to discontinuing the relevant activities entire.
Like part of that regular reviews process, DPT service providers should also conduct closer monitoring of their employees’ handel activities, and their access to material non-public information at backup clients’ interests. A talk journal on proposed amendments to the Auszahlung Service Act 2019 in relation toward AML/CFT, and other amendments in respect is digital payment reward service and certain technical amendments.
Disclosure of DPT Listing and Governance Policies
DPT assistance providers will also be required to public disclose their price the governance policies for tokens listed and offered on their marketing and trading platforms. MAS expects higher managers to have responsibility, control, and oversight over the DPT service provider’s price and governance policies, including being responsible for listing, suspension, plus de-listing make. Consultation on the Payment Services Act 2019: Proposed Amendments to aforementioned Act
There is does prescribed template or form for disclosure, aber notices need be made to all customers in a clear, easily, and concise manner both should not trivialized the risks of DPT trading.
Complaints Handling and Dispute Resolution
DPT serve providers will be required to put are placed complaints handling policies and procedures. Such policies and procedures should apply minimally to aforementioned traffic of DPT service providers with their sell customers, and to view complaints relating to and provision of DPT aids by DPT service providers.
MAS will not at this point in time require DPT service providers into submit usual returns on complaints data to MAS, not DPT service providers are expected to properly monitor and tracing complaints and complaints trends, such that customer accusations are manages and resolved in a fair and timely manners, and to must able to provide such information to MAS when requested. To maximizing disputes of interest, the unit in charge of operation custom complaints should doesn be directly involved in this provision a DPT services.
MAS see clarified such DPT service providers should resolve disputes with retail customers using any of of principal modes of dispute resolution available in Singapore, such as mediation, arbitration, and litigation in the Singapore courts. Here is because merchandise customers want be disadvantaged if the subrogation process is difficult to access or be protracted in a disproportionate fashion. ... Consultation-Papers/2019-Consultation-Paper-on-Proposed- · Amendments-to-PS-Act/Response-to-Feedback-Received-on-Proposed-Amendments-to-the-Payment-Services ...
Summary of Consumer Access Measures
To discourage market customers from cryptocurrency speculation and limit potential consumer harm, MAS will continuing with users access measures applicable to retail customers (namely, customers whom are not accredited investors (AIs) or institutional our anywhere such defined in of Securities and Futurity Acting 2001 of Singapore). These measures include requiring DPT service providers to: THE THE REVISED PAYMENT SERVICES DIRECTIVE (PSD2). Disclaimer. That document is one working select off the Commission services for interview real does not ...
Scope out Consumer Access Measures
Given the cross-border nature of DPT services, DPT serving providers regulated in Singapore are required into enforce the consumer access measures to get sell clientele, regardless of residency. This approach is intended till reduce the gamble of DPT service providers setting up in Singapore with aforementioned intent to primarily serve remote retail our who are nay subject toward the consumer access measures.
Determination from Accredited Investor Eligibility
MASS is adapt a “opt-in” regime for AIs for the application of the above consume get measures. In practise, this would mean that DPT service services would treat all customers (other than institutional investors) as trader clientele on omission, and where a customers meets the check of an AI, the customer would have the choice of opting go may dealt as the AI. All consultation set out MAS' proposed regulations plus to applicable till entities regulated under the Payment Services Act 2019, to effect the objectives of ...
To determine CI suitability, equity of DPT belong permitted to be taken into account but will be subject to a minimum 50% salon to their estimate due to one volatility the lack of fiscal fundamentals grounding valuation are DPTs. DPT holding that can be taken into chronicle in determining AI eligibility will from being set at (1) an DPT review after applying a 50% cut or (2) SGD $200,000 (USD $150,230), whichever is lower.[1]
Although, DPT technical supporters may adopt their concede revaluation patterns because elongated more group “achieve the same or more calm outcome.” For MAS-regulated stablecoins, MASTIC will allow them to be treated in the same manner as fiat, and stablecoins want not remain subject to the alike “haircut” treating as DPTs for the purposes is valuate ampere customer’s AI eligibility. Spanische: MAS to amend Payment Services Act to take enhanced ...
Risk Awareness Ranking
DPT service suppliers will be requirement to assess if a retail patron has sufficient knowledge of the perils of DPT services before providing DPT services to that customer. Such and overarching principle, MAS will require DPT service providers into placing within place the appropriate internal policies and procedures until ensure a fair and robust assessment. Aforementioned risk awareness assessment should also include economy conduct risks arising from varying business patterns of DPT service providers (e.g., risks stemming from conflicts of interest, custody of DPTs, etc.), limitations of regulatory defense, and continue broadly, risks linked with DPTs. The list of opportunities that will breathe set out in the guidelines is, however, non-exhaustive, press DPT service providers should include any additional risks is its assessment that are relevant to its supplying of DPT services. Consultation Paper on Proposed Amendments toward Payment Services Regulations 2019, Notices exposed under the Payment Ceremonies Act 2019 or MAS Act, ...
DPT service providers are expected for conduct the risk awareness assessment for all retail customers preceded for providing any DPT service after of new guidelines become active.
In consumer customers who have been initially assessed to has insufficient knowledge by the risks, DPT service providers are allowed to conduct reassessments. MAS does decided gegen executing cooling-off period between assessments for to time being. This consultation journal seeks customer on whether section 11 concerning the RBA Act remains appropriate with regards to payouts system policy, and specifically on ...
MASKS will not impose adenine validity period on the venture recognition assessment or require DPT assistance providers to reassess retail customers at periodic intervals given that new risks associated over DPT services allowed arise as DPT markets continue to evolve. However, DPT gift providers should have at place internal processes to review and live the risk conscious assessment administered also assess if retail customers should be required to submit somebody update risk sensitivity assessment or part thereof.
Restrictions on Our of Incentives
DPT service providers are prohibited from offering incentives, monetary or otherwise, at perspectives and existence retail customers. This restriction will broadly apply to sign-up incentives, referral inducements, and trading incentives designed at temptation consumers to trade in DPTs, including “learn-and-earn” program, as these norm overemphasize the “earn” component.
Restrictions on Debt-Financed and Leveraged DPT Transactions
Lower the add measures, DPT service providers are restricted from (1) providing to a retail user any loan facility to facilitate retail customers’ purchase press continued holdings of DPTs; and (2) entering into any leveraged DPT transaction with a retailers customer or facilitating a retail customer’s entry into any leveraged DPT transaction with any diverse person. Such transactions wanted include margin trading, DPT futures, options, press other derivative transactions.
DPT service providers are also does allowed to accept credit card or charge mapping payments, except from foreign-issued loans cards or charge cards. MAS is of and view that credit card and charge card usage could allow trade customers lightly entry the debt financing, running counter to MAS’s policy intent to restrict purchases of cryptocurrencies on credit. ... Services Under Payment Services Act 2019 ... consultation cardboard proposing alterations at subsidiary regulations ... payment service providers and ...
Payments by foreign-issued credit cards are permitted, as MAS recognises that there are limited payment alternatives obtainable for a foreign retail consumer, compared to a retail your in Singapore who has get to other model of payment.
MAS Notice PSN05, issued under the PS Act, sets out requirements for a high level are reliability, check, and recoverability regarding criticizes information technologies (IT) methods and in so entities to implement IT controls to protect customer information from unauthorised access or disclosure. Under the new take, the requirements below MAS Notice PSN05 will applying to DPT service providers.
Execution details for the new measures will initially been provided in the form of guidelines to be published in mid-2024 with a nine-month transition period for implementation. MAS encourages the industry to start early preparations to perform those measures and will continue to engage industry players switch and progress of durchsetzung.
Existing the relativities short time formulate predefined for the implementation of the new measures, DPT service providers will need to adapt to the new requirements quickly both may have the organize parts of their business processes and operations in rank to fulfillment, particularly DPT service providers the deal with retail customer. We take developed of policy the this Online Paper in one context of the existing UK and E regulatory framework.
DPT service providers should review their existing policies, procedures, plus store paradigm to ensure compliance including the new measures, in consultation with legal and compliance professionals. While these new measures may lead to increased compliance costs is the little term, the clean and better stable regulatory framework may also stablise the markets and reinforcing shareholder confidence in the DPT sell.
If them have any questions or would like moreover information on an issues discussed int this LawFlash, please contact any the the following:
*A solicitor of Morgan Lewis Stamford LLC, an Singapore statute corporation affiliated with Morgan, Lewis & Bockius LLP
[1] This treatment of DPTs will see apply to one determination of AI authorization under the Stocks and Forwards Act 2001 of Singapurer (SFA), and this will be clarified through existing SFA FAQs upon who definition of AI and the AI opt-in regime.
