Proposed amendments to the Payment Services Regulations 2019

Background

On 4 January 2021, amendments to the Payment Services Act 2019 (“PSA”) were passed to, among other things, expand the scope of payment services regulated under the PSA for alignment with the enhanced standards adopted by the Financial Action Task Force (“FATF”).

On 8 May 2023, the Monetary Authority of Singapore (“MAS”) issued a consultation paper on the proposed amendments to (i) the Payment Services Regulations 2019 (“PSR”), (ii) the existing notices applicable to payment service providers, and (iii) the new proposed regulations on exemptions for a specified period, in order to operationalise the amendments made to the PSA.

Proposed amendments

The proposed amendments include:

1. Exemption from safeguarding requirements under the PSR: exempting a major payment institution (“MPI”) from safeguarding requirements in respect of money received by the MPI for the provision of a service that falls within the expanded scope of cross-border money transfer service following the commencement of the amendments to the PSA, subject to certain conditions;
2. Revising the scope of application of MAS Notice PSN01 (Prevention of Money Laundering and Countering the Financing of Terrorism – Specified Payment Services) (“PSN01”) and MAS Notice PSN02 (Prevention of Money Laundering and Countering the Financing of Terrorism – Digital Payment Token Service) (“PSN02”): to make amendments to PSN01 and PSN02 to apply the anti-money laundering (“AML”)/countering the financing of terrorism (“CFT”) requirements in PSN01 and PSN02 to apply to the newly scoped-in payment services following the commencement of the amendments to the PSA. MAS has also proposed (i) to amend PSN01 and PSN02, to require licensees and exempt payment service providers under the PSA which are incorporated in Singapore to develop and implement group-wide AML/CFT policies; (ii) to amend PSN02 to introduce requirements relating to agency arrangements of digital payment token (“DPT”) service providers; and (iii) to amend PSN01, to exclude wire transfers that flow from a transaction carried out using a charge card, credit card, debit card, prepaid card or electronic wallet for the purchase of goods and services from the requirements set out under paragraph 15 of PSN01;
3. Extending the data collection requirements in MAS Notice PSN04 (Notice on Submission of Regulatory Returns) (“PSN04”): to apply the requirements in PSN04 to the newly scoped-in payment services following the amendments to the PSA and adding data fields to PSN04 to augment MAS’ surveillance of the payment services sector;
4. Revising the scope of application of MAS Notice PSN07 (Notice on Conduct) (“PSN07”) and MAS Notice PSN08 (Notice on Disclosures and Communications) (“PSN08”): (i) to apply the requirements in PSN07 and PSN08 to the newly scoped-in payment services following the commencement of the amendments to the PSA and (ii) to amend PSN07 to provide some flexibility in the money transmission requirements (i.e. allowing for a longer time for money to be transmitted where the transaction involves only corporate customers) arising from industry feedback; and
5. Introducing the new Payment Services (Exemption for Specified Period) Regulations 2023: introducing new regulations to exempt, for a specified period, entities that need to be licensed, or that need to vary their licence under the PSA arising from the broadened scope of cross-border money transfer services, domestic money transfer services and DPT services.

To learn more, please read the consultation paper here.

IMPORTANT NOTICE: This memorandum is only intended as a guide and does not purport to be an exhaustive or conclusive discussion of the matters set out herein and should not be relied on as a substitute for definitive legal advice. Reference should always be made to the applicable statutes, the relevant subsidiary legislations and other applicable guidelines. This memorandum is not to be transmitted to any other person nor is it to be relied upon by any other person or for any other purpose or quoted or referred to in any public document or filed with any governmental or other authorities without our consent in writing. This memorandum is limited to the laws of Singapore. In issuing this memorandum, we do not assume any obligation to notify or inform you of any developments subsequent to its date that might render its contents untrue or inaccurate in whole or in part at such later time. If you would like to discuss the implications of these legal developments on your business or obtain advice, please do not hesitate to approach your usual contact at Insights Law LLC or you may direct the inquiry to our key contacts stated above.

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