26 April, 2019
The recent passing of the Payment Services Bill by the Singapore Parliament will make significant changes to the payments landscape in Singapore. For one, the Payment Services Act 2019 (“PS Act”) will, when it comes into force, consolidate the existing regimes governing payment services under a single piece of legislation. The PS Act will also include several new activities that are to date, unregulated. More information on the PS Act can be found here.
To effect the objectives of the PS Act, the Monetary Authority of Singapore (“MAS”) has now released for public comments, drafts of four sets of subsidiary legislation, as follows:
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(a) Payment Services Regulations;
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(b) Payment Services (Exemptions for a Limited Period of Time) Regulations;
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(c) Payment Services (Singapore Dollar Cheque Clearing System and Inter-Bank GIRO System) Regulations; and
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(d) Payment Services (Designated Payment Systems) Order.
This update outlines MAS’s key proposals on each of the foregoing draft subsidiary legislation.
Payment Services Regulations
When finalised, the Payment Services Regulations (“PS Regulations”) will be the main set of subsidiary legislation setting out requirements and exemptions applicable in respect of licensees and designated payment system (“DPS”) entities, such as DPS operators, settlement institutions and participants.
In the tables below, we briefly compare the positions:
(a) under the existing regime;
(b) originally proposed in MAS’s 2017 Consultation Paper on Proposed Payment Services Bill (“2017 CP”); and
(c) now proposed in the draft PS Regulations.
Table 1: Licensing and conduct of business
|
Existing Regime |
2017 CP |
Draft PS Regulations |
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Lapsing of licence due to non-commencement of business |
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A licence under the Money-changing and Remittances Business Act (Cap. 187) (“MCRBA”) will lapse if a licensee does not commence business for a continuous period of three months after the grant of the licence. |
– |
To provide for greater commercial flexibility, the period of inactivity which would result in the lapsing of a licence under the PS Act will be increased to six months. |
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Lapsing of licence due to cessation of business |
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A licence under the MCRBA will lapse if a licensee ceases to carry on business and has not resumed the |
– |
To provide for greater commercial flexibility, the period of inactivity which would result in the lapsing of a licence |
The draft PS Regulations will also set out the usual ancillary regulatory provisions, such as the procedure for applying for licences, detailed rules on conduct of business by licensees, conduct of audits, enforcement and compounding of offences, the quantum of various administrative and regulatory fees payable, etc.
Payment Services (Exemptions for a Limited Period of Time) Regulations (“PS Exemption Regulations”)
In the 2018 response to feedback on the 2017 CP, MAS had proposed a set of temporary exemptions to be set out in subsidiary legislation. These temporary exemptions are set out in the PS Exemption Regulations and do not differ from the arrangements proposed in the 2018 response paper.
Persons who carry on any specific payment service described in Table 3 below before or on the commencement date of the PS Act, and who meet the conditions described for each specific payment service, are exempted from holding a licence under the PS Act for the specified grace period.
The exemption from holding a licence for a specified grace period is intended only for persons who have commenced business on or before the commencement date of the PS Act and have notified MAS of the date on which they commenced the business of providing the specific payment services on, or within a specified period, after the commencement date of the PS Act.
Table 3: Transitional arrangements for new payment services
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Payment Service Type |
Specific Payment Service |
Specified Grace Period |
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Account issuance service |
Issuance of payment accounts that do not store e-money. |
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Issuance of payment accounts that store e-money and where such payment accounts:
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Issuance of payment accounts that store e-money and where the issuer complies with all the prevailing anti-money laundering / countering the financing of terrorism (“AML/CFT”) requirements (under MAS Notice PSOA-N02) imposed by MAS that are applicable to account issuance. |
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Domestic money transfer service |
Providing domestic money transfer service. |
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Cross border money transfer service |
Providing inward cross border money transfer service. |
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Merchant acquisition service |
Providing merchant acquisition service. |
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E-money issuance |
Issuing e-money where the total float (set out in the PS Act as relevant money) held by the e-money issuer does not exceed S$30 million. |
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DPT service |
Providing DPT service. |
Same as the above, save that a six month grace period is specified instead of 12 months. |
Payment Services (Singapore Dollar Cheque Clearing System and Inter-Bank GIRO System) Regulations and Payment Services (Designated Payment Systems) Order
The foregoing subsidiary legislation is intended to cover a similar scope as the equivalent provisions in the existing Payment Systems (Oversight) (Singapore Dollar Cheque Clearing System and Inter-Bank GIRO System) Regulations and the various Payment Systems (Oversight) (Designated Payment Systems) Orders. MAS may subsequently prescribe regulations for other designated payment systems, if necessary.
MAS plans to consult on the AML/CFT requirements applicable to licensees under the PS Act in the coming weeks.
Consultation Period
The consultation closes on 10 May 2019.
A copy of the consultation paper can be assessed here. The draft versions of the subsidiary legislation can be
assessed here.
The article can be viewed here (8 pages).
