Technology law in Singapore is at the cusp of a brand new phase with impending novel rules and ethical governance hints relating to financial technology (fintech) and synthetic intelligence (AI), respectively. There’s also been a flurry of activities on information protection, cybersecurity and Initial Coin Offerings (ICOs) or digital token sales.
A new Payment Services Act (PSA) below the supervision of the Monetary Authority of Singapore (MAS) changed into brought within the Singapore parliament on 19 November 2018 and handed on 14 January 2019. This new regulation will adjust many fintech businesses, cowl both conventional and virtual payment services, and update the Payment Systems (Oversight) Act (PS(O)A) and the Money-Changing and Remittance Businesses Act (MCRBA).
The new regulation will take a threat-based approach to adjust the subsequent payment services underneath a modular licensing regime (as opposed to activity-precise licensing):
Domestic cash transfer offerings (i.E., accepting money to execute, or set up the execution of, certain charge transactions in Singapore);
Cross-border money transfer offerings (i.E., inbound or outbound remittance);
Merchant acquisition services (i.E., accepting and processing payment transactions that result in the money transfers to traders regardless of whether the price provider company comes into possession of the cash);
Electronic cash (e-money) issuance (e-cash being electronically saved economic cost denominated in, or pegged to, any foreign money paid in advance for making payment transactions via a charge account, is common with the aid of someone apart from the e-cash company, and represents a declare on the issuer);
Digital payment token offerings (cryptocurrencies or virtual currencies); and
Money-changing services.
On digital payment tokens and cryptocurrencies, initial coin offerings, especially involving protection tokens, are regulated with the aid of other present laws.
MAS may also designate and impose situations on fee structures, that may substantially affect bills or monetary structures in Singapore, if important, to make certain efficiency or competitiveness of the price machine, or if typically in the public’s interest.
Payment carrier providers can be (1) popular fee institutions (SPIs); (2) essential price establishments (MPIs); or (three) cash-changers (that may simplest offer cash-changing offerings). Each interest is a situation to approval by way of MAS, however, no longer certified in my opinion. SPIs are regulated extra gently than MPIs to encourage innovation. The difference between SPIs and MPIs is whether they deal in transactions over a threshold quantity and/or have every day e-money glide above a threshold amount.
Certain sports are excluded from the PSA: (1) restrained reason e-money, including public authority pre-paid playing cards and e-cash issued for charge of goods or offerings supplied by the e-cash company; (2) limited motive digital payment token or digital forex, together with in-recreation digital assets and non-monetary customer loyalty or praise points; and (3) positive payment offerings that are expressly described inside the first schedule of the PSA. Notably, an entity might be presumed to hold on an enterprise of supplying a price service even in which the price service is most effective incidental to the entity’s number one commercial enterprise.
The PSA and consequential regulations are intended to deal with the following key dangers: (1) cash laundering and terrorism financing (ML/TF); (2) consumer protection, inclusive of operator insolvency; (three) interoperability of fee structures, consisting of mandating a honest get right of entry to regime, commonplace platform, and commonplace requirements; and (four) generation dangers, which include consumer authentication, information safety, cybersecurity prevention and detection. Ongoing compliance requirements will practice. Minimum capital requirements will also observe to price establishments.
