MAS proposes to widen regulatory powers over financial services sector with new Bill

MAS also proposes to introduce enhanced regulation of virtual asset service providers for money laundering and terrorist financing risks. PHOTO: ST FILE

SINGAPORE - The central bank of the Republic could get wider regulatory powers over the financial services sector with a new Bill tabled in Parliament on Monday (Feb 14).

This would help the Monetary Authority of Singapore (MAS) deal with financial sector-wide risks in a rapidly changing and increasingly integrated environment, it said.

Under the proposed law, the new powers would include prohibiting any person who is not fit and proper from engaging in any activity regulated by MAS, as well as performing a prescribed list of key roles and functions in the financial sector.

This broadens the categories of individuals who may be subject to prohibition orders, MAS said.

It also rationalises the grounds for issuing such orders into a single fit and proper test, and widens the scope of the prohibition to cover functions like handling of funds and assets, as well as risk management and control.

MAS also proposes to introduce enhanced regulation of virtual asset service providers, which includes those in digital payment tokens or cryptocurrencies, for money laundering and terrorist financing risks.

"MAS considers all transactions relating to digital token services to carry higher inherent money laundering and terrorist financing risks due to their anonymity and speed," it said.

Other powers that MAS proposes under the new Bill include the harmonised power to impose requirements on financial institutions regarding technology risk management in order to ensure the safety and soundness of the tech systems used by them to deliver financial services.

MAS also wants to provide statutory protection from liability for mediators, adjudicators and employees of an operator in an approved dispute resolution scheme.

"This will strengthen the confidence and autonomy of these individuals when they carry out their duties," MAS said.

In July 2020, MAS issued a consultation paper proposing such enhanced powers.

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