MAS proposes enhanced powers to address financial risks
The regulator plans to require licenses to any person in Singapore issuing digital tokens.
The Monetary Authority of Singapore has issued a consultation paper proposing enhanced powers to address financial sector risks, such as issuing prohibition orders, expanding regulations on digital token issuers, improving technology risk management and strengthening dispute resolutions.
The proposed new act will consolidate similar provisions for various classes of financial institutions to act as a single legislation, the press release stated.
It gives MAS additional powers to prohibit unsuitable individuals from working in the financial industry, 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, strengthen the framework for technology risk management, and enhance the effectiveness of dispute resolution.
In particular, MAS will be able to issue prohibition orders (POs), which is expected to enable the regulator 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 PO powers.
MAS also proposes to license and regulate any person in Singapore who provides digital token services overseas. The provisions expand the scope of an existing legislation which already regulates most of the digital token services provided in Singapore.
The act will also impose requirements pertaining to technology risk management, including cyber security risks and data protection, on all regulated financial institutions. The maximum penalty on any breach of the requirements will also be raised to $1m.
In the same vein, MAS will provide statutory protection to persons performing the duties of an approved dispute resolution scheme operator, such as mediators, adjudicators and employees of the Financial Industry Disputes Resolution Centre (FIDReC). This will strengthen their confidence to act independently in resolving consumers’ disputes with financial institutions, according to MAS.