Financial Services and Markets Bill 2022
How will the Financial Services and Markets Bill expand the scope of MAS powers to prohibit certain activities?
The MAS currently has the power to issue prohibition orders (POs) to bar certain persons specified under the Securities and Futures Act 2001, the Financial Advisors Act 2001, and the Insurance Act 1966 from conducting certain activities or from holding key roles in FIs. Such POs serve as a deterrent against serious misconduct, to preserve trust in Singapore’s financial sector.
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Under the FSM Bill, the MAS will introduce a more harmonised and expanded power to prohibit any person who is not fit and proper from engaging in any activity regulated by the MAS. The fit and proper criterion will be the sole ground on which a PO can be issued. This will provide the MAS with more discretionary powers in issuing POs, and potentially widen the scope of activities to which POs may apply. The MAS will also have the power to prohibit persons from performing a wider range of specified functions, which include the handling of funds, the safeguarding or administration of digital payment tokens (DPTs), risk-taking, risk management and critical system administration.
Despite the wider reach of the MAS’ power to issue POs, POs will generally only be issued to persons with a nexus to the financial sector. Further, the MAS will exercise such powers commensurate to the risk, nature, and severity of the misconduct, and the potential or actual impact of the misconduct on the financial sector. Persons informed of the MAS’ intention or those issued POs will also be given the opportunity to defend themselves before the MAS or an appeal right to the minister.