22 January 2020
The Monetary Authority of Singapore (“MAS”) has issued the Guidelines on Licensing for Payment Service Providers (“Guidelines”) and specimen forms in relation to the Payment Services Act 2019 (“PS Act”). The PS Act, which will come into force on 28 January 2020, provides a new framework for the regulation of payment systems and payment service providers in Singapore.
Guidelines on Licensing for Payment Service Providers
The Guidelines provide guidance on the licensing criteria and ongoing requirements for payment service providers under the PS Act. They should be read in conjunction with the PS Act, the Payment Services Regulations (“PSR”) and other relevant legislation, notices, guidelines and FAQs issued by MAS.
Licences under PS Act
Under the PS Act, any person that conducts payment services is required to hold a licence unless that person is exempted from doing so. The PS Act recognises seven types of payment services.
The PS Act provides for three classes of licences whose regulatory requirements differ according to the risks posed by the scope and scale of services which the licensee provides. An applicant should:
- apply for a money-changing licence if it only intends to carry out money-changing service; or
- in any other case, apply for:
- a standard payment institution licence if it intends to conduct payment services below the specified thresholds; or
- a major payment institution licence if it intends to conduct payment services without being subject to the specified thresholds.
The Guidelines provide information on what licensees must do if they intend to add or remove any payment service, or change their licence type.
An applicant must fulfil stipulated criteria and demonstrate how it will be able to comply with its obligations under the PS Act. The Guidelines provide information on the admission criteria, including the following:
- Governance and ownership: The applicant must comply with the relevant governance and ownership structure set out in the Guidelines and must be registered with the Accounting and Corporate Regulatory Authority (ACRA).
- Compliance arrangements: The applicant must have in place plans for compliance arrangements that are commensurate with the nature, scale and complexity of its business. The Guidelines set out the minimum requirements in respect of compliance arrangements.
- Information required for licence applications: The applicant should ensure that it fully meets the admission criteria, and has ensured that the application is complete, free of errors and inconsistencies, and accompanied by the requisite supporting documents. The Guidelines provide guidance on the types of information that should be included in the applicant’s proposed business plan. Such information includes the detailed funds flow plan and channels, whether the payment services are incidental to or bundled with any other products or services offered by the applicant, and the applicant’s framework for assessing and managing technology risks.
- Fees: All applicants and licensees are required to pay the relevant fees set out in the Schedule to the PSR. Guidance on the payment of annual licence fees, including pro-rated licence fees for new licence holders and upward variations, is set out in the Guidelines.
The Guidelines also set out some of the applicable notices and guidelines concerning ongoing requirements for licensees in relation to matters such as anti-money laundering and countering the financing of terrorism, periodic regulatory returns, cyber hygiene, business conduct, disclosures and communications, and annual audit.
MAS has also released the following specimen forms:
- Notification Form for the Purpose of Exemption from Holding a Licence under the Payment Services Act for the Specified Period: Entities should use this form to notify MAS of the date on which they commenced the business of providing the specific payment services under the Payment Services (Exemption for Specified Period) Regulations 2019.
- Form 1 - Application for a Payment Service Provider Licence: Entities should use this form to apply for a payment service provider licence or to apply to change their entity type between a sole proprietorship, partnership, or company/corporation under the PS Act.
- Form 2 - Application for the Variation or Change of a Payment Service Provider Licence: Entities should use this form to apply for the variation or change of a payment service provider licence under the PS Act.
- Form 3 - Application for the Approval of Chief Executive Officer, Director or Partner of a Payment Service Provider: Entities should use this form to apply for the approval of a Chief Executive Officer, Director or Partner of a payment service provider under the PS Act.
It should be noted that these forms are currently specimens only. The link to the online forms will be made available on the relevant MAS webpages on 28 January 2020. Notifications and applications will only be accepted via the online form after the PS Act commences on 28 January 2020.
The following materials are available on the MAS website www.mas.gov.sg:
- Guidelines on Licensing for Payment Service Providers
- Notification Form for the Purpose of Exemption from Holding a Licence under the Payment Services Act for the Specified Period
- Form 1 - Application for a Payment Service Provider Licence
- Form 2 - Application for the Variation or Change of a Payment Service Provider Licence
- Form 3 - Application for the Approval of Chief Executive Officer, Director or Partner of a Payment Service Provider