Business Law

Singapore regulation and the frontiers of generation

Technology regulation in Singapore is on the cusp of a new section with impending novel guidelines and good governance tips relating to the monetary era (fintech) and artificial intelligence (AI), respectively. There’s also been a flurry of sports on statistics safety, cybersecurity and Initial Coin Offerings (ICOs) or virtual token sales.

A new Payment Services Act (PSA) below the supervision of the Monetary Authority of Singapore (MAS) became delivered in the Singapore parliament on 19 November 2018 and surpassed on 14 January 2019. This new law will alter many fintech corporations, cowl both traditional and digital charge services, and replace the Payment Systems (Oversight) Act (PS(O)A) and the Money-Changing and Remittance Businesses Act (MCRBA).

The new regulation will take a danger-based approach to adjust the following fee offerings below a modular licensing regime (rather than pastime-precise licensing):

Domestic cash switch offerings (i.E., accepting cash to execute, or arrange the execution of, positive charge transactions in Singapore);

Cross-border cash switch offerings (i.E., inbound or outbound remittance);

Merchant acquisition services (i.E., accepting and processing charge transactions that bring about the cash transfers to merchants regardless of whether or not the fee provider issuer comes into ownership of the money);

Electronic cash (e-money) issuance (e-cash being electronically stored economic price denominated in, or pegged to, any foreign money paid in advance for making charge transactions thru a price account, is shared through a person other than the e-cash provider, and represents a declare on issuer);

Digital fee token offerings (cryptocurrencies or digital currencies); and

Money-converting offerings.

On virtual payment tokens and cryptocurrencies, initial coin offerings, especially concerning safety tokens, are regulated by using different current laws.

MAS can also designate and impose conditions on charge systems, which can significantly impact bills or economic policies in Singapore, if vital, to ensure performance or competitiveness of the payment gadget, or if commonly within the public’s interest.

Payment carrier carriers can be (1) fashionable charge institutions (SPIs); (2) first payment establishments (MPIs); or (3) cash-changers (that could most effective provide money-converting services). Each activity is the situation to approval with the aid of MAS, however now not certified in my view. SPIs are regulated extra gently than MPIs to inspire innovation. The distinction between SPIs and MPIs is whether or not they deal in transactions over a threshold volume and have daily e-cash float above a threshold quantity.

Certain activities are excluded from the PSA: (1) restrained reason e-cash, which includes public authority pre-paid cards and e-cash issued for payment of products or services furnished with the aid of the e-cash issuer; (2) constrained motive digital payment token or digital forex, consisting of in-game digital property and non-monetary client loyalty or reward factors; and (3) sure fee offerings which are expressly described within the first schedule of the PSA. Notably, an entity could be presumed to hold on a commercial enterprise of supplying a charge carrier even in which the price provider is only incidental to the entity’s number one business.

The PSA and consequential rules are intended to cope with the subsequent vital dangers: (1) money laundering and terrorism financing (ML/TF); (2) person safety, inclusive of operator insolvency; (3) interoperability of fee structures, such as mandating a fair get admission to regime, common platform, and not unusual standards; and (4) era risks, such as person authentication, records safety, cybersecurity prevention and detection. Ongoing compliance necessities will follow. Minimum capital necessities may even follow to payment establishments.

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