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. This 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.

 

Application for Money-Changing or Remittance Business License

The MCRBA mandates a valid money-changer’s license or remittance license for a person who wants to carry on or advertise that he/she carries on money-changing or remittance business in Singapore. Any person who violates this requirement shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 2 years or to both. The application must be submitted by the entity applying for money-changing or remittance business license in the form prescribed by the MAS.

Factors for consideration for grant of application by MAS

The following factors are taken into consideration by the MAS for grant of application for money-changer’s license or remittance license.

  • The character of the applicant or, in the case where the applicant is a company, partnership or limited liability partnership, the general character of its management
  • The financial condition of the applicant, and in the case where the applicant is a company, partnership or limited liability partnership, its track record and financial performance in previous years
  • Whether the public interest will be served by granting of the license
  • The qualification and experience of the applicant, particularly in operating a money- changing or remittance business and in the area of anti-money laundering and countering the financing of terrorism (AML/CFT)
  • The fitness and propriety of the applicant

Criteria for Granting Renewal and Holding of,

A)   Money-Changer’s License

Where the applicant for a money-changer’s license is a:-

  • Sole proprietor, he should be a Singapore citizen. He should have qualifications higher than or equal to at least 4 GCE ‘O’ Level credit passes and have a minimum of 1 year’s relevant working or business experience on a full time basis;
  • Partnership or limited liability partnership, the majority of its partners should be Singapore citizens, where the partnership or limited liability partnership comprises only of two partners, only one of the partners need be a Singapore citizen. The individual directors of the applicant should have qualifications higher than or equal to at least 4 GCE ‘O’ Level credit passes and have a minimum of 1 year’s relevant working or business experience on a full time basis. The individual partners of the applicant should have qualifications higher than or equal to at least 4 GCE ‘O’ Level credit passes and have a minimum of 1 year’s relevant working or business experience on a full time basis.
  • Company, at least 51% of the equity shareholdings should be beneficially owned and effectively controlled by persons who are Singapore citizens. A majority of the board of directors of the company should be Singapore citizens, except in the case where the board comprises only of two directors, only one of the directors need be a Singapore citizen.
  • Singapore incorporated wholly-owned subsidiary of a foreign bank, or a foreign company primarily engaged in money-changing, whether the parent company of the applicant :-
    1. is of significant size; or in case of a foreign bank, ranks among the top banks    in the country in which it is incorporated;
    2. possesses a good track record and reputation; and
    3. is adequately regulated and supervised by its home supervisory authority for anti-money laundering (AML) and countering the financing of terrorism (CFT)

B) Remittance License

The Person shall be,

  • A company
  • Has a minimum capital of $100,000 or such other sum as may be prescribed by the Authority
  • Maintaining a security of the value $100,000
  • The individual directors of the applicant should have qualifications higher than or equal to at least 4 GCE ‘O’ Level credit passes;

Application fees

As per the Money-Changing and Remittance Business Regulations, (MCRBR) application fees must be paid to MAS for grant and renewal of License

The application fees is payable to MAS for grant and renewal of money-changer’s license

  • In respect of an application for the grant of a money-changer’s license, $200;
  • In respect of an application for the renewal of a money-changer’s license, $100.

The application fees payable to MAS for grant and renewal of Remittance license

  • In respect of an application for the grant of a remittance license, $500;
  • In respect of an application for the renewal of a remittance license, $250

Effect of new Payment Services Act on Money-changing or Remittance Business.

Due to the considerable change the payment services landscape has undergone, beyond the scope of activities and type of risks regulated under the Payment Systems (Oversight) Act, 2006 (“PS(O)A”) and the Money-Changing and Remittance Businesses Act,1979 (“MCRBA”) the new Payment Services Act has been passedby the Parliament.

Under the Act, any person who desires to carry on business in providing one or more types of payment services may apply for:

  • Money-changing License
  • Standard Payment Institution License or Major Payment Institution License

Money-changing License

A person must hold a money-changing license if he carries on business in providing money-changing services only.

Standard Payment Institution License and Major Payment Institution License

A person must hold a standard payment institution license or major payment institution license,

  1. if he is providing one of the following payment services
  • Account issuance services
  • Domestic money transfer services
  • Cross border money transfer services
  • Merchant acquisition services
  • E-money issuance
  • Digital payment token service
  1. if he is providing two or more of the following payment services
  • Account issuance services
  • Domestic money transfer services
  • Cross border money transfer services
  • Merchant acquisition services
  • E-money issuance
  • Digital payment token service
  • A money-changing service

Remittance businesses will now come under the purview of cross-border money transfer services. Cross border money transfer services includes:

  • any service of accepting money in Singapore, whether as principal or agent, for the purpose of transmitting, or arranging for the transmission of, the money to any person outside Singapore (other than any such service that MAS may prescribe);
  • any service of receiving any money from outside Singapore for, or arranging for the receipt of any money from outside Singapore by, any person in Singapore (other than any such service that MAS may prescribe), whether as principal or as agent;

The new Payment Services Act has not brought in major changes to money-changing or remittance business. The requirements by the MAS for grant of license for a person who wants to carry on money-changing or remittance business remains the same. But by the passing of the new Act, at any point in time, a payment service provider needs only to hold one license, but of a class that corresponds to the risk posed by the scale of payment services provided.

How can Argus help?

Are you interested in applying for a money-changer’s license or remittance license in Singapore?  We will be happy to assist you with your registration with MAS and all other compliance needs that may arise.

Argus specializes in regulatory compliance and provides objective insights, subject expertise and a simple approach to all your compliance-related needs. Our diversified client base spans start-ups to mature businesses. Please connect with us for your specific queries to this article or any other regulatory compliance hurdles you may face. Do reach out to us at [email protected]

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