As published on straitstimes.com, Wednesday 22 July, 2020.
It will be harder for dodgy operators to work in the finance industry under proposals announced yesterday that also look at ways to reduce risks stemming from the greater use of technology in the sector.
The proposed reforms, outlined in a consultation paper, are also in part an exercise to consolidate similar provisions across different classes of financial institutions into a single piece of legislation.
The new Act will enable the Monetary Authority of Singapore (MAS) to expand its powers to issue prohibition orders to deter misconduct, it said yesterday.
It will also broaden the categories of individuals who may be subject to such orders, as well as rationalise the grounds for issuing them from a list of specific criteria into a single test to determine if someone is fit and proper to work in the industry.
The MAS said the new powers will allow it to "holistically assess whether a person's misconduct renders him unsuitable to perform one or more roles within the financial sector and the appropriate action that should be taken".
There are also proposals to expand the scope of rules aimed at countering money laundering and terrorism financing to include people here who provide digital token services overseas.
Existing legislation already regulates most of the digital token services provided here, including requiring firms to set up robust controls to detect and deter the flow of illicit funds through the financial system.
Such controls include requiring financial institutions to identify and know their customers, conduct regular account reviews and report any suspicious transaction.
The new provisions will align Singapore's regime with the enhanced standards adopted by the global watchdog, Financial Action Task Force, for such service providers.
The MAS also proposed that it harmonises and expands the powers related to technology risk management to cover all regulated financial institutions. This would include cyber-security risks and data protection to deal with the pervasive use of technology and the growing sophistication of cyber threats.
It proposed raising the maximum penalty for contravening technology risk requirements to $1 million - which would be a significant increase.
In the case of banks, the penalty for a breach of a notice issued under the Banking Act is a fine not exceeding $100,000. A continuing offence brings a further fine not exceeding $10,000 for every day the breach continues after conviction.
The MAS also proposed providing statutory protection to those working in dispute resolution, such as mediators, adjudicators and employees of the Financial Industry Disputes Resolution Centre.
"This will strengthen their confidence to act independently in resolving consumers' disputes with financial institutions," it said.
Comments on the proposed new Act can be lodged at legal_dept@ mas.gov.sg by Aug 20.