Knowledge Highlights 21 November 2024
Financial Institutions (Miscellaneous Amendments) Act 2024 to harmonise and enhance MAS’ investigative and supervisory powers partially in force
The Financial Institutions (Miscellaneous Amendments) Act 2024 (“FIMA Act”) has partially come into force on 30 August 2024.
The FIMA Act harmonises and enhances the investigative powers of the Monetary Authority of Singapore (“MAS”) across six Acts, namely the Financial Advisers Act 2001 (“FAA”), Financial Services and Markets Act 2022, Insurance Act 1966 (“IA”), Payment Services Act 2019, Securities and Futures Act 2001 (“SFA”), and Trust Companies Act 2005 (“TCA”).
The FIMA Act also makes amendments to empower MAS to issue directions to capital markets services licence holders (“CMSL holders”) to manage potential risks from their conduct of unregulated businesses, and to enhance MAS’ supervisory and inspection powers.
The following are some of the changes that came into force on 30 August 2024.
MAS’ powers to issue directions to CMSL holders conducting unregulated business
The FIMA Act has amended the SFA to expand MAS’ powers to issue directions to CMSL holders and their representatives for conducting unregulated businesses, such as dealing in products that are not regulated by MAS (e.g. digital payment token derivatives that are traded on overseas exchanges). These unregulated businesses may pose contagion risks to CMSL holders’ regulated businesses. MAS is empowered to issue legally binding directions to CMSL holders and their representatives in relation to their conduct of unregulated businesses to mitigate risks posed to their regulated businesses.
In issuing any direction, MAS must have regard to the need to avoid or reduce any risk (including any credit, asset, liquidity, market, operational, technology, market conduct, legal, reputational or regulatory risks) that has arisen or may arise from the conduct of the unregulated business by the CMSL holder, and that may affect the business in a regulated activity of the CMSL holder.
Amendments to clarify MAS’ reprimand powers
The FAA, SFA, and TCA are amended to make clear MAS’ policy intent that a person previously regulated under one of those Acts, and who has ceased to be regulated under the relevant Act, can be reprimanded by MAS for misconduct, if the person was a regulated person at the time of the misconduct.
Other provisions in force
- The FAA is amended to provide that written directions under section 67 of the FAA may also be issued by MAS for the protection of policy owners, in addition to investors.
- The FAA, SFA, and TCA are amended to provide that MAS may, on the application of any person, by written notice exempt the person from all or any provisions of the relevant Act, or all or any requirements imposed by MAS under the relevant Act.
- The IA is amended to enable regulations to be made with respect to the corporate governance and risk management of insurers and insurance brokers.
- The SFA is amended to permit a foreign regulatory authority, with the prior written approval of MAS, to appoint any person to conduct an inspection under section 150B(1) of the SFA on behalf of the foreign regulatory authority.
Reference materials
The following materials are available from Singapore Statutes Online sso.agc.gov.sg:
