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Knowledge Highlights 5 September 2024
The Financial Services and Markets Act 2022 (“FSMA”) is an omnibus Act for the sector-wide regulation of financial services and markets.
The financial sector has transformed significantly in recent years, in terms of the types of transactions, and the persons, institutions, and technology conducting these transactions. The FSMA ensures that the Monetary Authority of Singapore (“MAS”) keeps abreast of these developments and is equipped with the tools to facilitate the development of these new products and services while managing the risks involved. Some of MAS’ powers on similar issues which were previously spread across various Acts are consolidated into one single Act, e.g. the proper management of technology risk and measures to instil proper conduct among professionals in the financial sector. The FSMA also addresses regulatory challenges presented by the digitalisation and transformation of the financial market.
The FSMA is being implemented in phases, as set out below.
Background
The powers of MAS to regulate the financial sector by entity and activity are set out in various Acts administered by MAS. Over the years, the Monetary Authority of Singapore Act 1970 (“MAS Act”) was amended to include new legislative provisions that applied to financial institutions (“FIs”) across the financial sector. Recognising the increasing need for a financial sector-wide regulatory approach to complement MAS’ entity and activity based regulation in addressing the emerging risks and challenges that impact the financial sector, MAS issued a consultation paper on 21 July 2020 on a proposed new omnibus Act for the financial sector. With the introduction of the new omnibus Act, the provisions in the MAS Act that related to MAS’ regulatory oversight of different FI classes would be moved to the new omnibus Act. These provisions included those relating to the prevention of money laundering and terrorism financing (“ML/TF”), the control and resolution of FIs, and the oversight of financial sector dispute resolution schemes.
In addition, MAS sought to introduce new provisions in the following areas:
The consultation closed on 20 August 2020. On 14 February 2022, MAS issued its Response to feedback received from the public consultation. The Financial Services and Markets Bill was tabled in Parliament on 14 February 2022 and passed on 5 April 2022.
Commencement of Phase 1 on 28 April 2023
As mentioned above, the FSMA is being implemented in phases. Phase 1 commenced on 28 April 2023 and saw the migration of the following provisions from the MAS Act to the FSMA:
Commencement of Phase 2A on 10 May 2024
Phase 2A commenced on 10 May 2024 and relates to the following:
To supplement the provisions of the FSMA that come into operation on 10 May 2024, MAS has issued a number of Notices and Guidelines relating to TRM and cyber hygiene. These can be accessed from the MAS website.
Remaining phases
The remaining phases are targeted to be implemented in the second half of 2024. Provisions in the FSMA which have not come into force yet include those relating to the following:
Reference materials
The following materials are available from Singapore Statutes Online sso.agc.gov.sg and the MAS website www.mas.gov.sg: