MAS published a consultation paper on the new Omnibus Act for financial sector. The proposed new Act for financial services and markets will consolidate similar provisions related to the prevention of money laundering and terrorism financing and the resolution of financial institutions in the MAS Act into a single legislation. The new Act will include additional powers to prohibit unsuitable individuals from working in the financial industry, strengthen the framework for technology risk management, and enhance the effectiveness of dispute resolution. The new Act will also expand the scope of anti-money laundering and countering the financing of terrorism (AML/CFT) requirements to persons in Singapore who provide digital token services overseas. The consultation paper seeks feedback until August 20, 2020.
Annex A to the consultation paper sets out a list of questions regarding which comments are being sought while Annexes B to G set out the proposed provisions for each part of the new Act. In this paper, the MAS proposed to:
- Harmonize 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 and to increase the maximum penalty to SGD 1 million for any contravention of these requirements.
- Expand its power to issue prohibition orders. This proposal will broaden the categories of persons who may be subject to prohibition orders, rationalize the grounds for issuing prohibition orders (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 one or more roles or activities within the financial sector and the appropriate action that should be taken under the prohibition order powers. In exercising this power, MAS will adopt a risk-proportionate approach, taking into account the nature, severity, and impact of the misconduct.
- License and regulate, for AML/CFT purposes, any person in Singapore who provides digital token services overseas. 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. The provisions will align Singapore’s regulatory regime with the enhanced standards adopted by the Financial Action Task Force for virtual asset service providers.
- Provide statutory protection to persons performing the duties of an approved dispute resolution scheme operator, thus strengthening their confidence to act independently in resolving consumer disputes with financial institutions.
Comment Due Date: August 20, 2020
Keywords: Asia Pacific, Singapore, Banking, Securities, AML/CFT, MAS Act, Digital Token, Cyber Risk, Technology Risk, Misconduct Risk, MAS
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