Prevention of Proliferation Financing and Other Matters Act 2024 aligning regulatory regimes for PSMD, moneylending, and pawnbroking sectors with updated FATF requirements in force

30 May 2024

On 1 May 2024, the Prevention of Proliferation Financing and Other Matters Act 2024 (“Act”) came into operation. The Act:

  • clearly aligns the regulatory regimes for the precious stones and precious metals dealers (“PSMD”), moneylending, pawnbroking, and legal services sectors with updated Financial Action Task Force (“FATF”) requirements;
  • strengthens the regulatory regime for PSMDs; and
  • improves operational effectiveness in regulating PSMDs.

Alignment with updated FATF standards

As explained at the second reading of the Prevention of Proliferation Financing and Other Matters Bill on 5 February 2024, the Act updates the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 (“PSPM Act”), the Moneylenders Act 2008, the Pawnbrokers Act 2015, and the Legal Profession Act 1966 to:

  • clearly align the regulatory regime for the PSMD, moneylending, pawnbroking, and legal services sectors with the updated FATF standards; and
  • require businesses or persons covered by these Acts to implement adequate measures to counter proliferation financing.

Examples of required measures include performing risk assessment, and developing and implementing internal policies, procedures, and controls to counter proliferation financing.

The Act also strengthens the controls in the Moneylenders Act 2008 and the Pawnbrokers Act 2015 against criminals owning or managing moneylending and pawnbroking businesses, in line with FATF recommendations. In particular, the Act prevents persons convicted of offences relating to the prevention of financial crimes from obtaining relevant licences or holding management functions in moneylending and pawnbroking businesses.

Strengthening the regulatory regime for PSMDs

The Act strengthens the regulatory regime for PSMDs through amendments to the PSPM Act by:

  • amending the definition of “precious product” to also cover any “precious product” priced above a prescribed value, set at S$20,000, regardless of the value attributable to the PSPM, in order to include products with majority of value attributed to other factors not previously captured, such as branding or workmanship;
  • amending the existing definition of “asset-backed token” to exclude digital payment tokens from the PSPM Act, as the Monetary Authority of Singapore already regulates digital payment token service providers under the Payment Services Act 2019;
  • introducing a new offence in the PSPM Act for regulated dealers that submit incomplete or inaccurate cash transaction reports without reasonable excuse;
  • making it clear that compliance officers appointed by PSMDs must be assessed by the Registrar of Regulated Dealers (“Registrar”) to be “fit and proper” persons; and
  • introducing a record-keeping requirement for regulated dealers to keep records, for a prescribed period after ceasing to be a regulated dealer, and empowering the Registrar to continue regulatory action against former registered PSMDs.

Improving operational effectiveness in regulating PSMDs

The Act amends the PSPM Act to improve operational effectiveness in regulating PSMDs by:

  • allowing the Registrar to cancel or suspend the registration of PSMDs that are not conducting regulated dealing and/or fall under prescribed circumstances;
  • providing that the registration of a registered PSMD lapses if the PSMD is wound up or otherwise dissolved (in the case of an entity) or dies (in the case of a sole proprietor); and
  • prescribing methods of service of documents required or authorised by the PSPM Act to be served on any person.

Revised subsidiary legislation and guidelines

In conjunction with the coming into force of the Act, the Ministry of Law (“MinLaw”) has issued amendments to the relevant subsidiary legislation and a revised version of the Guidelines for Regulated Dealers in the Precious Stones and Precious Metals Dealers Sector on Anti-Money Laundering/Countering the Financing of Terrorism/Countering Proliferation Financing.

Reference materials

The following materials are available on Singapore Statutes Online sso.agc.gov.sg and the MinLaw website www.mlaw.gov.sg: