The Monetary Authority of Singapore wants to acquire more power to issue prohibition orders, regulate virtual asset service providers created in Singapore for anti-money-laundering purposes, make rules to govern technology risk management and provide statutory protection from liability to the mediators, adjudicators and employees of an operator of an approved dispute resolution scheme.

Its consultative exercise on the subject is now entering the evaluative stage, all comments having been received.

An "Omnibus Act" is planned. The MAS wants it to include a power to prescribe additional specified functions in  subsidiary legislation, letting it respond more swiftly than before to "new risks emerging."

The regulator issues prohibition orders to bar people from conducting certain activities or from holding important jobs at financial institutions for periods of time. It does this in cases of serious misconduct, setting the duration and scope of each order according to the facts of each case. Its powers reside only in the Securities and Futures Act (Cap 289), the Financial Advisors Act (Cap 110) and the Insurance Act (Cap  142). This means that that it cannot issue orders to anyone regulated under other Acts that it administers. Instead, it wants the power to "issue a PO against any person who is not fit and proper to engage in regulated activities and identified roles and functions across thefinancial industry." It wants the new type of order to allow aggrieved individuals a right of appeal to the minister.

At the moment, the MAS can prohibit unsuitable people from taking up specified positions (i.e. directorships, substantial shareholdings and managerial jobs) and from conducting certain activities that are regulated under the three Acts. It also wants to be able to stop them from taking risks, managing risks, "controlling" risks, administering "critical systems" and handling funds (which includes safeguarding or administering digital payment tokens or digital payment token instruments).

The language of the consultative document suggests that the MAS is less than confident that the legislature of Singapore will grant it all these powers, for it frequently promises to use them wisely, sparingly and with probity. As with most regulators that are on the brink of acquiring new powers, it is likely that they will take one stance beforehand and another after. Very tellingly, it also proposes to aqcuire a power to prescribe extra specified functions in subsidiary legislation.

VASPs

The Financial Action Task Force, the world's AML standard-setter, now requires countries to regulate virtual asset service providers or VASPs to ward off money launderers. It says that VASPs ought to be licensed or registered in the jurisdictions in which they are created. They are highly international and communicate with their customers primarily online. The MAS plans to comply with this edict by creating a new class of financial institutions that are created in Singapore but which carry out business outside the city state. It will call them digital token service providers. The MAS wants the power to change the meaning of the phrase "digital token" - and therefore widen the reach of its regulation of VASPs - at will.

Proposed provisions

Annex F to the consultative document contains the MAS's proposals for provisions to govern its powers to inspect firms. These proposals are subject to "clearance" by an unnamed Government department and also subject to review by the Attorney-General's chambers.

Each firm, according to the proposals, will have to give the MAS access to its books, as long as the request for each book is reasonable. It must do this despite any obligation of confidentiality or other restrictions on its disclosure of information that springs from any prescribed written law or any requirement imposed under any such written law, any contract or any rule of professional conduct. A firm that refuses or neglects to hand over the information without reasonable excuse is to be counted guilty of an offence and liable on conviction to a fine of up to S$100,000 and, in the case of a continuing offence, to a further fine of up to S$10,000 for every day or part of a day during which the offence continues after conviction.

Any person at the firm who does not answer questions about the books faces a fine of up to S$50,000 and/or up to two years in prison. A person is not to be excused from having to give the MAS the information it asks for on the grounds that the disclosure of the information might tend to incriminate the person.