SINGAPORE (20 July): The Monetary Authority of Singapore (MAS) has issued a consultation paper proposing enhanced powers to deal with risks that can undermine the financial sector.

The proposed new Act for financial services and markets will consolidate similar provisions for various classes of financial institutions in the MAS Act into a single legislation.

In addition, the new Act will include additional powers to prohibit unsuitable individuals from working in the financial industry.

In the paper, MAS proposed to expand its power to issue prohibition orders (PO). It explained that this will broaden the categories of persons who may be subject to POs, rationalise the grounds for issuing POs (from a list of specific criteria into a single fit and proper test), and widen the scope of prohibition.

The new powers will enable MAS to holistically assess whether a person’s misconduct renders him unsuitable to perform roles or activities within the financial sector, as well as the appropriate action that should be taken under the PO powers. MAS said it will adopt a “risk-proportionate” approach when exercising this power, and will take into account the nature, severity and impact of the misconduct.

Furthermore, MAS also proposes to license and regulate any person in Singapore who provides digital token services overseas for anti-money laundering and countering the financing of terrorism (AML/CFT) purposes.

The provisions in the new Act will expand the scope of existing legislation, which already regulates most of the digital token services provided in Singapore. It will also align Singapore’s regulatory regime with the enhanced standards adopted by the Financial Action Task Force (FATF) for virtual asset (or digital token in Singapore’s context) service providers.

MAS also proposes to harmonise and expand its existing powers to impose requirements pertaining to technology risk management, including cyber security risks and data protection, on all regulated financial institutions. The maximum penalty is also proposed to be increased to $1 million for any contravention of these requirements.

Statutory protection will be provided to persons performing the duties of an approved dispute resolution scheme operator.

MAS added this will strengthen their confidence to act independently in resolving consumers’ disputes with financial institutions.