MAS introduces amendments to the Payment Services Act

The Monetary Authority of Singapore (MAS) has announced amendments to the Payment Services Act (PS Act) and its subsidiary legislation.

The Monetary Authority of Singapore (MAS) announced amendments to the Payment Services Act (PS Act) and its subsidiary legislation, extending the regulatory framework to encompass a broader range of payment services and imposing enhanced requirements on digital payment token (DPT) service providers. Effective in stages from 4 April 2024, these amendments aim to improve user protection and reinforce financial stability. 

The amendments will now regulate activities including the provision of custodial services for DPTs, facilitating DPT transmission between accounts and exchanges, and enabling cross-border money transfers across different countries, even if funds are not received in Singapore. 

MAS will have the authority to enforce measures related to anti-money laundering, countering the financing of terrorism, user protection, and financial stability on DPT service providers. Transitional arrangements will be offered to entities currently engaged in activities under the expanded scope of the PS Act. These entities must notify MAS within 30 days and submit a licence application within six months from 4 April 2024 to continue operations temporarily while MAS assesses their applications. Licence applications must include an attestation report on business activities and compliance with anti-money laundering and countering the financing of terrorism requirements, completed by a qualified external auditor within nine months from the effective date. 

Entities failing to meet these requirements are mandated to cease relevant activities upon the amendments' enactment. Furthermore, the amended Payment Services Regulations relating to the safeguarding of assets belonging to customers of DPT service providers will take effect six months from the aforementioned date. These regulations encompass measures such as segregating customers' assets into trust accounts, maintaining proper records, and implementing robust systems and controls to ensure customers' assets' integrity and security.

Other developments from the MAS 

In April 2024, the Monetary Authority of Singapore launched the COSMIC platform to combat money laundering, terrorism financing, and proliferation financing around the world.

The COSMIC platform (Collaborative Sharing of Money Laundering /TF Information & Cases) was developed as a centralised digital tool that is expected to facilitate sharing of customer information among financial institutions. The primary goal is to detect and combat money laundering (ML), terrorism financing (TF), and proliferation financing (PF) for clients and enterprises across the globe. The Financial Services and Markets (Amendment) Act 2023 and the accompanying subsidiary legislation were designed to set out the legal basis and safeguard the process of sharing data between financial institutions.