Singapore | MAS Consultation Paper: Proposed Regulatory Framework for Digital Token Service Providers Under the FSMA

The MAS has issued a Consultation Paper on 4 October 2024, proposing a new regulatory framework under the Financial Services Markets Act 2022 (“FSMA”) for digital token service providers operating from Singapore but serving clients outside the country. Key proposals include licensing requirements, financial obligations, AML/CFT compliance, and governance standards.

With the implementation of the FSMA, existing digital payment token licensees, along with exempt and transitional licensees, should proactively review their business structures. This includes evaluating any unlicensed affiliates operating in Singapore that may now be subject to new licensing requirements. Unlicensed digital payment token service providers, especially those within multi-jurisdictional groups or dealing in digital asset derivatives, should assess whether their operations for affiliates outside Singapore could now fall under FSMA’s licensing scope.

Responses to the consultation are due by 4 November 2024, and Drew & Napier is coordinating a consultation session on behalf of ACCESS to gather feedback on 17th October at 5pm. Drew & Napier’s Financial Regulatory team is ready to assist clients in understanding these proposals, ensuring compliance, and navigating the licensing process under the FSMA.

You may read the full legal update here.