Latest Updates to the Regulatory Regime under the Payment Services Act

09 Apr 2024 Legal Highlights

The past week has seen various developments in the payments regulatory regime, particularly for digital payment token ("DPT") service providers ("SPs").


First off, the MAS has announced that the amendments to the Payment Services Act 2019 (“PSA”) that were passed in 2021 will come into force in stages, starting from 4 April 2024. These amendments will expand the scope of activities regulated under the PSA to include custodial services for DPTs, facilitation of transmission and exchange of DPTs, and facilitation of cross border money transfers between different countries (even where moneys are not accepted or received in Singapore).


At the same time, MAS issued its response to feedback to its consultation on various proposed amendments to the Payment Services Regulations and accompanying Notices issued under the PSA (accessible here), many of which are required for the operationalisation of the PSA amendments described above. In particular, impacted entities which are currently conducting activities that will become regulated under the PSA must do the following in order to be able to continue their activities while MAS reviews their licensing application: (1) notify MAS within 30 days of 4 April 2024, (2) submit to the MAS a PSA licence application within 6 months of 4 April 2024; and (3) submit to the MAS an attestation report (on the entity’s business and the entity’s compliance with AML/CFT requirements) made by a qualifying auditor within 9 months of 4 April 2024.


Lastly, the MAS has also issued its Guidelines on Consumer Protection Measures by Digital Payment Token Service Providers [PS-G03], which set out MAS’ expectations of the measures that DPTSPs should have in place to ensure greater protection for customers. These measures include: (1) an opt-in regime that will require DPTSPs to obtain express consent from customers (who meet the relevant accredited investor wealth thresholds) to be treated as accredited investors for purposes of the guidelines (which then disapplies certain aspects of the guidelines); (2) segregation of customers' assets; (3) implementing robust risk management controls to safeguard customers' assets; (4) requirement to make certain disclosures to customers; (5) restrictions on dealing with assets belonging to retail customers. These Guidelines can be accessed here and will take effect on 4 October 2024.


Our Financial Services Regulatory Practice has advised on a broad range of issues that concern Financial Institutions, including under the payment services regulatory regime. Reach out to our Financial Services Regulatory Practice Partners Elaine Chan, Rosabel Ng, Chan Jia Hui, Tian Sion Yoong, or find out more about our practice here: