MAS Releases Consultation Paper on Payment Systems Oversight Act
Singapore, 16 April 2003. The Monetary Authority of Singapore (MAS) today released a Consultation Paper on the proposed Payment Systems Oversight Act and invites comments from the public.
2 Payment systems are critical to market and economic infrastructure, as they provide the means for transferring monetary values around the economy. Central banks around the world are closely involved in payment systems oversight, given their importance to financial stability, the successful implementation of monetary policy, and the smooth functioning of the financial system & the economy.
3 The proposed Act aims to provide the foundation for a clear and consistent payment systems oversight framework in Singapore. The current payment systems oversight in Singapore is a combination of legislation in the Banking Act and informal, cooperative arrangements with the industry. Other countries that have passed similar legislation are Canada, Australia, Norway and South Africa.
4 The proposed Act will allow MAS to collect information from payment system operators and participants for understanding and monitoring their importance in the financial infrastructure. MAS will be able to designate payment systems and subject them to regulation if they can potentially cause financial instability or widespread disruptions, leading to the loss of public confidence. MAS will also liberalise the existing stored valued card policy to allow non-banks to issue low-value multi-purpose stored value cards. This is because such schemes pose low risks to financial stability and public confidence.
5 Following this consultation, MAS will release the draft of the Payment Systems Oversight Bill for a second round of public consultation that will focus on the legislative and implementation aspects of the proposed act.