MAS Adopts FATF Standards on VASPs in Payment Services Act
31 Dec 2019

MAS (Monetary Authority of Singapore) has issued a consultation paper on proposed amendments to the Payment Services Act 2019 in relation to AML/CFT and other matters.

The Payment Services Act 2019 will commence on 28 January 2020, applying AML/CFT measures to all three classes of payment service providers: holders of a money-changing licence, standard payment institutions, and major payment institutions.

The respective AML/CFT Notices will apply to all payment service providers providing any of the following payment services: account issuance, domestic money transfer, cross-border money transfer, money-changing, DPT (digital payment token).

The new amendments follow a June consultation on the new AML/CFT Notices to be issued under the MAS Act that would apply to payment service providers. The final notices to be amended are available here and here.

The amendments will align Singapore’s new framework with the most recent enhancements to the FATF Standards in relation to VASPs (virtual asset service providers). In this regard, MAS considers that DPT transactions carry higher inherent money laundering and terrorism financing risks due to their anonymity, speed and cross-border nature.

In addition, MAS seeks views on a proposed expansion of the regulatory scope for cross-border money transfer services, in light of business models that facilitate the “brokering” of remittance transactions between entities in two different countries, without actually accepting or receiving any funds in Singapore.

MAS proposes to expand the regulatory scope of the Payment Services Act to include the following DPT service provider activities for the purposes for addressing AML/CFT risks:

Transfer of DPTs, which could be used by bad actors to move or layer the proceeds of illicit assets. MAS will expand the definition of DPT services to include any service that accepts DPTs for the purposes of transferring them to another address or account, or arranging such a transfer, whether inside or outside Singapore.

By Manesh Samtani, Regulation Asia, 28 December 2019 

Read more at Regulation Asia

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