Articles & Events Summary

Regulations for Money-Changing or Remittance Business in Singapore

Money-changing or remittance businesses are licensed and regulated under the Money-Changing and Remittance Businesses Act 1979 (MCRBA). Money-changing involves the buying and selling of foreign currency notes and may be conducted as a sole proprietorship, partnership or company. Remittance business involves the acceptance of moneys for the purpose of transmitting them to persons resident in another country or a territory outside Singapore. The Article throws light into the key requirements put forward by Monetary Authority of Singapore for the application of license for money-changing or remittance business in Singapore.

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Industry News

Enhancements to Technology Risk and Business Continuity Management Guidelines proposed by MAS

The Monetary Authority of Singapore (MAS) released two consultation papers on proposed changes to the Technology Risk Management Guidelines and the Business Continuity Management Guidelines. The changes will require financial institutions’ (FIs) to put in place enhanced measures to strengthen operational resilience. These take into account the rapidly changing physical and cyber threat landscape. The public consultation will get closed on 9th April 2019.

For more information, click here.

Can remittance companies licensed under the Money-changing and Remittance Businesses Act (MCRBA) lend money?

MAS has responded to Mr. Billy Lee for his letter can remittance companies lend money? (Straits Times online, 18 January 2019).Remittance companies are currently licensed under the Money-changing and Remittance Businesses Act (MCRBA). The Money-changing and Remittance Businesses Act regulates licensees for their money-changing and remittance activities, primarily to mitigate the risks of money-laundering and terrorism financing. In the past year, MAS has been alerted to a remittance licensee offering consumer loans. MAS is not intending to allow remittance licensees to conduct consumer lending. If licensees wish to do more, they must hold the appropriate license and be subject to the relevant regulatory measures. Remittance companies that are currently conducting consumer lending will have to cease such activities by the time they are licensed under the Payment Services Bill.

For more information, click here.

EU updates tax haven blacklist, adds UAE, Bermuda

The European Union has updated its list of non-cooperative jurisdictions for tax purposes (tax haven). The new additions include Bermuda and the UAE. The Council of EU stated that these jurisdictions have failed in implementing their commitments to EU within the agreed deadline. The list, which is part of the EU’s external strategy for taxation as defined by the Council, is intended to contribute to ongoing efforts to prevent tax avoidance and promote tax good governance. Work on the list started in mid-2016 within the Council’s working group responsible for implementing an EU code of conduct on business taxation.

In his response statement, Bermuda’s Finance Minister stated that they are a cooperative jurisdiction with the EU for tax purposes and is now fully compliant. He added that Bermuda officials would visit EU ministers to reinforce its position. The UAE regretted the EU’s action and said that it was enlisted despite its ‘close cooperation with the EU on this issue’.

For more information, click here.

SFC fines UBS $375 million and suspends its licence for one year for sponsor failures

The Securities and Futures Commission (SFC) has reprimanded and fined UBS AG and UBS Securities Hong Kong Limited (UBS Securities Hong Kong) (collectively, UBS) a sum of $375 million for failing to discharge their obligations as one of the joint sponsors of three listing applications, namely, China Forestry Holdings Company Limited (China Forestry), Tianhe Chemicals Group Limited (Tianhe), and another listing application.

The SFC also partially suspended UBS Securities Hong Kong’s licence to advise on corporate finance for one year, to the extent that UBS Securities Hong Kong shall not act as a sponsor for listing application on the Stock Exchange of Hong Kong Limited (SEHK) of any securities.

The SFC has also suspended the licence of Mr. Cen Tian for two years from 14 March 2019 to 13 March 2021 for failing to discharge his supervisory duties as a sponsor principal in charge of supervision of the execution of China Forestry’s listing application.

For more information, click here.

The Hong Kong Monetary Authority (HKMA) approves three Virtual banking licenses

The Hong Kong Monetary Authority (HKMA) has granted virtual banking licenses on 27 March 2019 under the Banking Ordinance to Livi VB Limited, SC Digital Solutions Limited and ZhongAn Virtual Finance Limited for them to operate in the form of a virtual bank. The granting of these virtual banking licenses took effect on 27th March 2019. HKMA is making good progress in the processing of the remaining 5 virtual banking license applications.

Virtual banks will have no physical branches, they will rely on the internet for customer acquisition and for the delivery of banking services. Mr. Norman T.L. Chan, Chief Executive of the HKMA, said that the introduction of virtual banks in Hong Kong is a key pillar supporting Hong Kong’s entry into the Smart Banking Era. It is a major milestone in reinforcing Hong Kong’s position as a premier international financial centre. The virtual banks will not only help drive FinTech and innovation but also bring about brand new customer experiences and further promote financial inclusion in Hong Kong.

For more information, click here.

MAS sets out enforcement outcomes and priorities in inaugural Enforcement Report

The Monetary Authority of Singapore (MAS) published its inaugural Enforcement Report on 20th March 2019. The report outlines MAS’ enforcement priorities and provides greater accountability and transparency into the actions taken against breaches of MAS’ rules and regulations. The report is published every 18 months to better protect consumers and safeguard public trust in our financial institutions, MAS will focus its enforcement efforts to strengthen: Timely and adequate disclosure of corporate information by listed companies;

Business conduct of financial advisers and their representatives; Financial institutions’ compliance with Anti-Money Laundering/Combatting the Financing of Terrorism requirements; Brokerage houses’ internal controls to detect and deter market abuse; and

Surveillance and investigations into suspected insider trading. In addition, the report outlines the types of misconduct MAS is currently investigating and the key initiatives MAS has undertaken to uphold Singapore’s reputation as a clean and trusted financial centre.

Ms Gillian Tan, Executive Director (Enforcement), MAS said that “As Singapore’s financial industry grows in size and complexity, so will the risks of financial misconduct. Enforcement plays a critical role in financial supervision through the detection, investigation and punishment of serious misconduct. The Enforcement Report provides detailed insights into MAS’ enforcement work and priorities, and provides the public and financial sector with a comprehensive picture of our ongoing efforts to preserve the integrity of Singapore’s financial markets.”

For more information, click here.

Goldman Sachs fined $45 million by UK watchdog for reporting failures

Britain’s markets watchdog has fined Goldman Sachs International 34.3 million pounds ($45 million), the highest penalty so far, for failing to provide accurate reporting of transactions for over ten years. The Financial Market Authority (FCA) said that Goldman is the 14th financial firm to be fined for transaction reporting failures under the European Union securities law known as ‘The markets in financial instruments directive’ (MiFID), after UBS was fined earlier in the month for similar failures.

For more information, click here.

Singapore FinTech Association and FinTech Australia sign memorandum of understanding

Singapore FinTech Association (SFA) and FinTech Australia (FA) signed a Memorandum of Understanding (MoU) to reinforce opportunities for FinTech firms across both countries. The signature took place during the Money20/20 Asia, a conference held in Singapore discussing Payments, Financial Services and FinTech.

For more information, click here.

SFC reprimands and fines BOCI Securities Limited HK$10 million for regulatory breaches

The Securities and Futures Commission (SFC) has reprimanded and fined BOCI Securities Limited HK$10 million over its internal system and control failures in its investment product selling practices, following an investigation which found that the company had failed to comply with various regulatory requirements concerning client profiling, product due diligence and suitability assessment in its sale and distribution of investment products.

For more information, click here.

MAS Regulatory Updates – Highlights

01 Mar 2019 – Notice on Supervision of Market Participants

MAS has issued notice on supervision of market participants. As per the notice, recognized market operator must have in place measures to ensure that the participants in Singapore of any organised market operated by the recognised market operator comply with the rules of the recognised market operator, have in place measures to monitor the compliance of the participants in Singapore of any organised market operated by the recognised market operator with Part XII of the Act, take immediate action to terminate, suspend or restrict the access of a participant in Singapore of any organised market operated by the recognised market operator to any such organised market

Click here to read the regulatory update.

13 March 2019 – Circular on Disclosure Requirements for the Policy Owner’s Protection (“PPF”) Fund

MAS has earlier issued Circular No. ID 21/11 that sets out the disclosure requirements for PPF Scheme members under the Deposit Insurance and Policy Owners’ Protection Schemes (Policy Owners’ Protection Scheme) Regulations 2011 and the standard disclosure statement adopted by the insurance industry. In December 2018, MAS and the Singapore Deposit Insurance Corporation (“SDIC”) engaged the Life Insurance Association (“LIA”) and the General Insurance Association (“GIA”) to gather feedback from PPF Scheme members on proposed revisions to the disclosure requirements, including the standard disclosure statement. The circular sets out revisions that have been proposed to better align the disclosure requirements across PPF and Deposit Insurance (“DI”) Scheme members, and further to take into account developments in the marketing practices of Scheme members.

Click here to read the regulatory update.

13 March 2019 – Circular on consultation on proposed enhancements to disclosure requirements for sale of investment-linked policies

MAS had issued a consultation paper proposing enhancements to disclosure requirements for sale of investment-linked policies. An Investment-Linked Policy (“ILP”) is a life insurance policy that provides both protection and investment benefits. MAS has published its response to feedback received on its consultation paper in MAS website

Click here to read the response paper and the consultation paper.

18 March 2019 – Securities and Futures (Trading of Derivatives Contracts) Regulations 2019

The Securities and Futures (Trading of Derivatives Contracts) Regulations 2019 became operational from 14 March 2019. It consists of regulations relating to the trading of specified derivatives contracts and regulations for keeping of books and other information as per powers conferred via Sections 129N and 341 of the Securities and Futures Act and specific exemptions as laid out by Section 129J.

Click here to read the regulatory update.

18 March 2019 – Securities and Futures (Trading Venues for Derivatives Contracts in the United States of America) Regulations 2019

The Securities and Futures (Trading Venues for Derivatives Contracts in the United States of America) Regulations 2019 came into operation on 14 March 2019. The purpose of these Regulations is to give effect to an arrangement between MAS and the United States Commodity Futures Trading Commission (“the commission), under which the Commission recognises that the requirements imposed by or under the Securities and Futures Act (SFA) on persons who operate organised markets in Singapore are comparable to the requirements imposed on persons who operate trading venues for derivatives contracts in the United States of America under the United States Commodity Exchange Act.

Click here to read the regulatory update.

25 March 2019 – FAQs on the Licensing and Registration of Fund Management Companies

MAS has issued updated FAQs on the Licensing and Registration of Fund Management Companies as a means to providing guidance. In the FAQs questions relating to VC manager regime has been answered.

The FAQs reiterate the eligibility criteria that a fund manager must meet to operate under the Venture Capital Fund Manager (VCFM) regime. They are allowed to invest up to 20% of committed capital in other unlisted business ventures that have been incorporated for more than ten years at the time of the initial investment, and/or the investment is made through acquisitions from other investors (e.g. other VC funds and existing owners) in the secondary market (“non-qualifying investments”). For determining the limit of these non–qualifying investments, the fund level fees and expenses such as (management fees, fund set up costs, administrative fees) to be excluded from the committed capital.

The FAQs also explain scenarios where CMSL license holders can manage or provide advice to funds offered to non-accredited and non-institutional (retail) investors.

Click here to read the regulatory update.

25 March 2019 – Guidelines on Licensing, Registration and Conduct of Business for Fund Management Companies

MAS had issued updated Guidelines on Licensing, Registration and Conduct of Business for Fund Management companies pursuant to section 321 of the Securities and Futures Act (Cap. 289) [“SFA”]. These are applicable to corporations with fund management as their principal business activity. The guidelines clarify that VCFM’s funds can only make investments in unlisted assets. However, this does not preclude a VCFM’s funds from holding listed securities in portfolio companies, provided that the funds had acquired these securities prior to their listing. In such cases, VCFMs are not expected to reclassify such investments from qualifying to non-qualifying when they become listed.

Click here to read the regulatory update.

29 March 2019 – Notice 815 Auditors’ Reports and Additional Information to be submitted with Annual Accounts

MAS has issued the notice pursuant to section 30(1) and 41 of the Finance Companies Act (Cap. 108) and applies to all finance companies and auditors of these finance companies. The notice specifies all the information that must be contained in the Auditors’ Reports and additional Information to be submitted with MAS by every finance company within the dates prescribed in the notice.

Click here to read the regulatory update.

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