The Monetary Authority of Singapore (MAS) issued a consultation paper (Consultation Paper) proposing to strengthen its investigative and other powers under MAS-administered Acts to improve enforcement efficiency.  The Consultation Paper also expands (a) the applicability of MAS’s reprimand powers under the Securities and Futures Act (Cap. 289) (SFA), Financial Advisers Act (Cap. 110) (FAA) and Trust Companies Act (Cap. 336) (TCA) and (b) MAS’s power to issue written directions to capital markets services (CMS) licensees conducting unregulated activities.

Enhancements to MAS’s Investigative Powers 

MAS proposes to introduce or enhance the following investigative powers under the SFA, FAA, Banking Act (Cap. 19), Insurance Act (Cap. 142), TCA and Payment Services Act 2019 (No. 2 of 2019):

• power to require information from any person, including employees and former employees of financial institutions (FIs), for purposes of an investigation;
• power to compel attendance for examination (including through obtaining a court warrant);
• power to provide a copy of the written record of a person’s statement at an examination, at such time as the MAS investigator shall determine;
• power to enter premises without a warrant and without prior notice, if there is a real risk of evidence destruction or tampering;
• power to obtain court warrant to seize evidence, including electronic evidence; and
• power to transfer evidence between MAS, the Police and/or the Public Prosecutor to avoid duplication of investigative processes.

Expansion of MAS’s Reprimand Powers

The SFA, FAA and TCA currently allow MAS to reprimand regulated FIs and their employees, officers, partners and representatives (Relevant Persons) if MAS determines that the Relevant Person committed misconduct and that the public interest requires or licensed trust companies’ investors, policy owners or protected parties require protection. 

Under the Consultation Paper, MAS could reprimand any person who was a Relevant Person at the time of the misconduct.  Accordingly, even former regulated FIs and former employees, officers, partners and representatives of regulated FIs maybe the subject of a MAS reprimand.  The proposed change aims to avoid situations where a Relevant Person attempts to maintain a clean record by terminating its regulatory status (in the case of an FI) or leaving the FI (in the case of an individual).

Expansion of MAS’s Powers to Issue Directions to CMS Licensees Conducting Unregulated Business 

Existing MAS guidance requires CMS licensees to implement risk-mitigating measures when conducting unregulated businesses, such as offering bitcoin futures or unregulated payment token derivatives.  Because conducting those businesses may adversely affect FIs’ ability to satisfy their customer obligations in respect of their regulated activities, MAS proposes to supplement existing guidance by introducing a power to issue legally-binding directions to CMS licensees and their representatives where necessitated by public or investor interests.

Key Takeaway

The proposed changes provide additional flexibility for MAS to enforce financial regulations in Singapore.  If adopted, the proposed changes will increase MAS’s ability to hold regulated FIs and their related persons accountable.  MAS-regulated entities should therefore take steps to ensure compliance with all MAS-administered laws.

For More Information

OrionW regularly advises financial services clients on regulation and licensing matters.  For more information about MAS-administered regulations, or if you have questions about this article, please contact us at info@orionw.com.

Disclaimer: This article is for general information only and does not constitute legal advice.

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