Provisions in Financial Services and Markets Act 2022 on prohibition orders in operation

27 August 2024

The provisions in the Financial Services and Markets Act 2022 (“FSMA”) relating to prohibition orders (“PO”) have come into operation on 31 July 2024. Part 3 of the FSMA introduces and implements the harmonised and expanded power of the Monetary Authority of Singapore (“MAS”) to issue POs under the FSMA. 

The FSMA provides MAS with broader powers to impose POs against persons who have shown themselves to be unfit to perform key roles, activities, and functions in the financial industry. The FSMA broadens the categories of persons who may be subject to POs, rationalises the grounds for issuing POs to a single fit and proper test, and widens the scope of prohibition to cover functions critical to the integrity and functioning of financial institutions. 

Before MAS issues a PO to any person, the person would have the opportunity to make representations to MAS. If MAS proceeds with issuing a PO, the person has the right to appeal to the Minister. 

Implementation in phases 

The FSMA is an omnibus Act for the sector-wide regulation of financial services and markets. The FSMA is being implemented in phases. For information about earlier phases, please see our article “Implementation of Financial Services and Markets Act 2022 in phases with new provisions on technology risk management in force”.

Remaining phases 

Provisions in the FSMA which have not come into force are largely those relating to digital token (“DT”) services providers. The FSMA will introduce licensing requirements and general powers over DT services providers, including powers for MAS to conduct anti-money laundering and countering the financing of terrorism (“AML/CFT”) inspections and render assistance to domestic authorities and MAS’ foreign AML/CFT supervisory counterparts. MAS will also impose ongoing requirements on DT service providers such that they have a meaningful presence in Singapore and that MAS has adequate supervisory oversight over them, e.g. having a permanent place of business in Singapore and satisfying financial requirements that may be prescribed or specified by MAS by notice in writing. AML/CFT requirements imposed on DT service providers will be aligned with the requirements imposed on digital payment token service providers regulated under the Payment Services Act 2019.

Reference materials 

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