, Author: Meng Ting, reproduced by Odaily with authorization.

On December 18, 2019, the official website of the Monetary Authority of Singapore (hereinafter referred to as "MAS") issued an announcement announcing that the "Payment Services Act" will be officially implemented on January 28, 2020. Digital currency exchanges A license must be applied for to operate in compliance. According to the requirements, all exchanges seeking compliance must submit application filing documents before February 27, 2020, and MAS clearly stated that it will not accept applications after the deadline. MAS will announce successful applicants in June 2020, and successful applicants are expected to start business in mid-2021.

1. About MAS

MAS is the Central Bank of Singapore and the Financial Supervisory Authority. It fully exercises the powers of the general central bank and has two major functions of financial regulation and financial supervision. Its responsibilities include supervising banks, financial companies and other financial institutions. Formulate and implement corresponding monetary policies to maintain a country's economic stability and ensure sustainable economic development.

The governance model adopted by MAS is the board of directors - executive president's office - various functional departments. The board of directors is composed of government officials, senior members of the financial and legal circles. On October 1, 2002, after MAS merged with the board of directors of monetary institutions, MAS has the function of issuing currency. Prior to this, the Board of Monetary Institutions was the sole issuer of new currency established under the Currency Act of March 1967.

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2. Problems in digital currency services in the eyes of MAS

Fintech has developed rapidly in the past few years. With the rise of digital currencies, the landscape of payment services is changing. MAS once stated at a press conference that emerging payment tools and business models are making the regulatory boundaries of existing bills increasingly blurred.

MAS believes that the current digital currency services have the following three obvious problems:

1. Since most digital currency transactions are completed through the Internet, there are risks of irreversibility and breach of contract, especially cross-border transactions, which are more difficult to trace and difficult to supervise. Therefore, digital currency is very likely to be used by criminals and become a tool for illegal activities such as money laundering.

2. Any digital currency needs to be converted into legal currency eventually, so there are risks of insufficient liquidity and exchange rate fluctuations. The collateral held by the digital currency issuer has false pricing and other situations, resulting in market risks.

3. Under the current situation of insufficient supervision, the digital currency issuance and transaction process is not transparent, and there is a possibility that the market may be manipulated by malicious people, which will endanger the rights and interests of investors.

In 2016, BSI Bank and Falcon Private Bank Singapore Branch were revoked their commercial bank licenses by MAS for violating anti-money laundering regulations. Three relevant bank employees received 15-year and lifetime bans from participating in the management of Singapore capital services companies. or engage in related activities. In May 2017, Credit Suisse and United Overseas Bank were fined 700,000 yuan and 900,000 yuan by the Monetary Authority of Singapore for their involvement in the 1MDB incident, inadequate supervision of customer transactions, and repeated violations of anti-money laundering regulations.

The license issued by MAS is called CMS, and its full name is "Capital Markets Services Licensee". The promulgation of the Payment Services Act once again demonstrates Singapore's firm position on digital currency business regulation. All digital currency exchanges, wallets and OTC platforms must meet relevant anti-money laundering regulations and apply for corresponding licenses.

The latest "Payment Service Provider License Application Guide" and 4 sample license application forms published by MAS on its official website clarify the types of licenses issued, license application information, conditions, procedures, etc.

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3. Three types of MAS regulatory licenses

There are currently three types of licenses that can be applied for:

(2) "Standard Payment Institution" license (SPI): Applicable to institutions that provide account opening services, domestic remittance services, cross-border remittance services, commercial procurement services, electronic payment services, payment-type digital currency services, and currency exchange services; / The amount of transfer is limited, that is, the annual average monthly business amount involved is ≤ 3 million SGD / or the annual average monthly business turnover amount is ≤ 6 million SGD. SPI has lower application requirements and is relatively less regulated.

(3) "Large Payment Institution" license (MPI): Applicable to industries whose business involves more than the amount listed in the "Standard Payment" license. The amount involved is relatively large, and the license approval is stricter.

The enterprise must obtain the corresponding new license approval before launching the new payment service. If the enterprise wants to change the SPI license to the MPI license, it should start the license change within a reasonable time when it is close to the MPI standard, so it is approved in MPI Previously, institutions holding SPI licenses were supposed to monitor their trading volume or the value of issued e-money to ensure that the threshold remained below a specified threshold.

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4. Requirements for applying for a license

1. Sole Proprietorship: Applicants must be Singapore citizens and must have at least one year of relevant work experience.

2. Partnership or limited liability partnership: Most of the partners must be Singapore citizens; each partner must have at least one year of relevant experience.

3. Singapore sole proprietorship: more than 50% of the company's equity should be owned or effectively controlled by Singapore citizens; most of the company's board of directors should be Singapore citizens; each executive director must have more than one year of relevant work experience or business experience.

4. A foreign bank incorporated in Singapore or a wholly-owned subsidiary of a foreign company mainly engaged in currency exchange: if it is a foreign bank, it must be in the forefront of the country of registration and have a good reputation and track record.

5. Basic capital requirements:

"Standard Payment Institution License (SPI)": S$100,000

"Large Payment Institution License (MPI)": SGD 250,000

* Applicants must ensure an adequate capital buffer in addition to this basic capital requirement, taking into account the size and scope of their operations and potential profit or loss.

6. Before starting business, the applicant for the payment institution license needs to pay a security deposit to MAS:

Other situations: Pay a security deposit of SGD 200,000.

7. Compliance arrangements

It is necessary to set up an independent compliance department and personnel, or obtain compliance support from the holding company or related entities.

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5. Application process

01 Scenario 1 For applicants who "have not yet engaged in payment business in Singapore, but wish to obtain a payment license":

Applicants need to prepare the following materials: company registration certificate, financial statements of the company or group in the past three years, organizational chart, business plan, shareholding structure chart, and relevant compliance documents.

It is necessary to fill in the form and prepare the following materials: financial statements of the company or group in the past three years, organization chart, business plan, and relevant compliance documents.

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03 Situation 3 If the applicant has engaged in related payment services (such as payment digital currency services) that were not covered by the previous Payment Act framework in Singapore before January 28, 2020:

It is necessary to fill in the "Notification of License Exemption for a Specified Period for Payment Service Providers" and complete the online submission.