Updated Guidelines on Licensing of Payment Service Providers by MAS

Introduction

The Monetary Authority of Singapore (MAS) has recently updated its Guidelines on Licensing for Payment Service Providers under the Payment Services Act (PS Act). These updates bring significant changes, particularly in Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) measures and Customer Due Diligence (CDD) processes. All payment service providers must comply with the new requirements and submit a declaration of compliance, certified by an external auditor, by January 5, 2025.

‍Key Highlights:

1. Enhanced AML/CFT and CDD Requirements: Strengthening the framework to prevent illicit activities.
2. Mandatory Compliance Declaration: Service providers must confirm their AML/CFT implementation by early 2025.
3. Updated Licensing Procedures: Adjustments in the application and ongoing compliance requirements.
4. External Auditor Certification: Independent verification of AML/CFT frameworks is now mandatory.

Updated Guidelines:

The MAS has introduced several changes to ensure a robust regulatory environment for payment services. Here are the key updates:

1. Licenses under the PS Act: The guidelines reiterate the need for different types of licenses depending on the services provided:
   • Money-changing License
   • Standard Payment Institution License
   • Major Payment Institution License
2. Governance and Ownership Requirements: Enhanced criteria for governance, particularly emphasizing the role of Singapore citizens or permanent residents in executive positions.
3. AML/CFT and CDD Measures:
   • Payment service providers must implement stringent AML/CFT controls.
   • Regular updates to CDD processes to ensure compliance with international standards.
   • Annual audits by external auditors to verify the effectiveness of AML/CFT measures.
4. Ongoing Compliance: Continuous adherence to MAS guidelines, including technology risk management and e-payments user protection.

Process for Compliance:

To ensure compliance with the updated guidelines, payment service providers must:

1. Review and Update Policies: Align existing AML/CFT and CDD policies with the new requirements.
2. Engage External Auditors: Appoint certified auditors to assess and certify the AML/CFT framework.
3. Submit Declaration: File a declaration with MAS by January 5, 2025, confirming compliance, accompanied by the auditor's certification.

Additional Insights:

The updated guidelines reflect MAS's commitment to maintaining Singapore's reputation as a secure and trustworthy financial hub. By enhancing AML/CFT measures and ensuring rigorous compliance checks, MAS aims to mitigate risks associated with financial crimes. 

Summary:

The updates to MAS's Guidelines on Licensing for Payment Service Providers emphasize the importance of robust AML/CFT and CDD measures. All service providers must ensure compliance by the set deadline, with external auditor certification playing a crucial role in the process. These changes underscore MAS's proactive stance in safeguarding the financial ecosystem against illicit activities.

For detailed information, please refer to the full guidelines issued by MAS.