Financial Technology, popularly known as ‘fintech,’ refers to the innovative technology that improves and automates the delivery and usage of financial services. It often includes technological penetration in the 4 main financial areas of payments, savings, lending, and insurance. The exponential growth in fintech over the last few years around the globe and in Asia has raised many concerns pertaining to the laws and regulations that govern them. Read on to find out more about what measures are in place, why regulatory measures are important when it comes to fintech in Singapore, and how a fintech lawyer can assist you to understand and conform to the regulatory compliance of fintech better.
Fintech in Singapore
The Monetary Authority of Singapore (MAS) has undertaken various initiatives to solidify Singapore’s status as a regional and global trade and finance hub. As part of this enterprise, Singapore has committed to developing a financial ecosystem that would facilitate the digitalization of its economy and the development of fintech. Furthermore, the concept of “Smart Nation” was also introduced by the MAS in its bid to prepare Singapore’s citizens, workforce, and government for this fundamental shift in the financial fabric.
Why Fintech Regulatory Measures Are Important?
The widespread use of technology in the financial sector has also created new hurdles in regulatory enforcement. The financial services industry has become significantly more vulnerable to attack, theft, fraud, and other cyber-criminal behavior as a result of the digital transformation of finance.
As the variety of financial innovations, the ubiquity of their use, and the rate at which they evolve have grown significantly, authorities are finding it increasingly challenging to devise suitable regulatory responses.
How Is Fintech Facilitated and Regulated in Singapore?
Regulations for Digital Assets, Cryptocurrencies, and Fintech have been progressively developing in Singapore over the last few years. Furthermore, changes in surveillance and enforcement are also noted.
· The Payment Services Act
The Payment Services Act 2019 (PSA) is regarded as a forward-looking and adaptable regulatory framework for Singapore’s payment systems and payment service providers. The PSA states that a license is required to conduct certain crypto-related businesses, cryptocurrency-related activities, transmission of cryptocurrencies, brokerage services for cryptocurrencies, and custody services for cryptocurrencies.
· Digital Tokens/Coins, Cryptocurrency, Non-Fungible Tokens (NFTs)
The advancement of technology has also given rise to digital tokens and Initial Coin Offerings (ICOs). The Digital Token Guide stipulates that MAS may regulate offers or issuance of digital tokens if they constitute capital market products under the Securities and Futures Act (SFA).
The trading of NFTs would fall under the regulations as NFTs can be transferred, stored or traded electronically for another type of token or for monetary value.
How Can a Fintech Legal Advisor Help You?
As business operations become more globalized the risks associated with business expansion also become greater. This is when an in-depth understanding of Anti Money Laundering (AML) regulations and Know Your Customer (KYC) regulations can essentially help you to stay out of troubled waters. The consequences of breaking AML regulations include disciplinary fines, legal/criminal proceedings, sanctions, reputational damage, and a loss of shareholder confidence.
Christopher Bridges Fintech Lawyers
Our fintech legal advisors will work closely with you to help you navigate your fintech journey all the way from start-up through to eventual exit. We will also provide you with the necessary advice and counsel on the regulatory implications of adopting specific disruptive technologies and help businesses such as platform providers in the fintech industry conform to regulations.
With an experienced and reputed fintech lawyer by your side, you can be rest assured that all regulatory compliance pertaining to your business operations is well taken care of. We specialize in legal advice on the AML/CFT regulations, legal advice on company best practices/KYC, and legal opinion on compliance with the Payment Services Act, digital payment token guidelines, and SFA regulations among other blockchain/fintech legal advice. Contact us today to accelerate your fintech journey.