Explanatory Brief: Payment Systems (Oversight) (Amendment) Bill 2012
1 The Deputy Prime Minister and Chairman of the Monetary Authority of Singapore (“MAS”), Mr Tharman Shanmugaratnam, today moved the Payment Systems (Oversight) (Amendment) Bill 2012 (“Bill”) for first reading in Parliament. The Bill will be read a second time at the next available Parliamentary sitting.
2 The Bill introduces provisions in the Payment Systems (Oversight) Act (“PSOA”) that enhance MAS’ oversight over designated payment systems (“DPS”) and aligns it with international standards, as set out in the CPSS-IOSCO1 Principles for Financial Market Infrastructures.
3 MAS has conducted consultations on the Bill and the comments received have been incorporated, where appropriate.
KEY AMENDMENTS IN THE BILL
4 Key amendments have been made to three areas pertaining to DPS. DPS are designated by MAS under the PSOA as these payment systems are viewed to be important to the financial stability or public confidence of Singapore2.
(I) Exclude the Application of Parts V and VI of the PSOA to MAS (Section 3)
5 MAS is both the operator and regulator of MEPS+, a systemically important payment system used for large-value financial transactions between financial institutions in Singapore.
6 Hence, this amendment excludes the application of Parts V (Obligations of operators and settlement institutions of a DPS) and Part VI (Oversight powers over DPS) of the PSOA to MAS as it would not be practical for MAS to take action and impose legal penalties on itself for any non-compliance.
(II) Confidentiality of Reports Issued by MAS (Section 27A)
7 The proposed new section provides an express provision for safeguarding the confidentiality of the information contained in the reports issued by MAS to the operator or settlement institution of a DPS, such as an inspection report.
(III) Expedite MAS’ Exercise of Emergency Powers (Section 28)
8 For the third amendment, MAS will be empowered to immediately exercise emergency powers in relation to an operator or settlement institution of a DPS during an emergency, instead of having to wait for a default by the operator or settlement institution in complying with requirements issued by MAS.
1 CPSS is the Committee on Payment and Settlement Systems of the Bank for International Settlements. IOSCO is the International Organisation of Securities Commissions.