Compliance Obligations under the Payment Services Act
June 13, 2023
The Payment Services Act (“PS Act”) came into effect in Singapore on 28 January 2020 and it streamlines payment services regulatory framework under a single piece of legislation covering both traditional and new payment activities. Payment service providers are subject to requirements under the PS Act, Payment Services Regulations (PS Regulations) and various Notices and Guidelines issued pursuant to the MAS Act and the PS Act.
MAS released its latest consultation paper proposing amendments to the Payment Services Act as of 8 May 2023. We have summarised proposed key changes below.
Key Regulatory Updates to the PS Act
- Major payment institutions will be exempted from safeguarding obligations under the PS Act when providing cross-border transfer services with no strong Singapore connection and subject to meeting certain conditions.
- AML/CFT requirements apply to newly scoped-in services as per the Payment Services Amendment Bill.
- Singapore firms who belong to a Group of companies must develop and implement group-wide AML/CFT policies for sharing information required for the purposes of customer due diligence and money laundering/terrorism financing risk management.
- Regulatory returns will apply to newly-scoped in services and additional data will be required to be submitted by all regulated firms.
- General conduct and risk warning requirements for PSPs will be updated in light of amendments to the PS Act.
- Entities that need to be newly licensed or need to vary their licence be provided an exemption period of six months via the Payment Services (Exemption for Specified Period) Regulations 2023. Entities may be required to provide third party assessments as part of its application, containing positive confirmations as to their adherence to key controls.
Payment Services Act Compliance Obligations
Payment service providers, once regulated, are required to comply with several ongoing compliance obligations. Below are some key requirements to take note of:
- Anti-money laundering and countering the financing of terrorism [“AML/CFT”] – A licensee must comply with AML/CFT requirements in conducting customer due diligence and AML screenings.
- Cyber hygiene – A licensee must comply with cyber hygiene requirements and put in place appropriate safeguards to protect customer information.
- Periodic returns – The submission of periodic returns is required in accordance with various regulations.
- Business conduct – polices and procedures must be established and maintained to safeguard customers’ monies, records of transactions and issuance of receipts etc.
- Disclosures and communications – appropriate policies and procedures must be established to ensure customers receive mandatory disclosures and communications as well as notification of changes and information to MAS.
- Audit requirements – Ensure the Licensee meets audit requirements and filings.
How can Waystone Compliance Solutions assist?
Our APAC Compliance Solutions team can provide the following services:
- Ongoing compliance support – such as regular compliance monitoring, providing regulatory advice, MAS correspondence, provision of Compliance Training and assistance with regulatory filings
- Assist with internal audit – by designing a suitable internal audit framework and conducting outsourced internal audits.
- Provide independent reviews on non-face-to-face customer due diligence procedures
- Assist with the drafting of key policies and procedures – such as the compliance obligations manual, AML/CFT Policies and eEnterprise-wide-risk assessments.
Please reach out to your usual Waystone Compliance Solutions representative or contact us below to find out more about our compliance services.