The MAS now seeks public comment on its proposal to further innovations in Fintech solutions.
On 6 June, the Monetary Authority of Singapore (MAS) released a consultation paper that invites comments on its proposal for a regulatory sandbox approach. Such an approach would be intended to provide a testing ground for businesses exploring new financial technology (Fintech) products, services, and processes without immediately having to comply with all legal and regulatory requirements.
In particular, the MAS has expressed its willingness to consider relaxing requirements such as asset maintenance, cash balances, credit rating, management experience, and track record for the duration of the sandbox.
With the appropriate safeguards in place, the consequences of failure can be contained and the overall safety and soundness of Singapore’s financial system maintained.
The current licensing process has tended to be long-drawn and protracted because of the need to carefully analyze the potential risks of more novel Fintech solutions. This has often resulted in applicants either not seeing applications through or deploying the solution outside of Singapore, where some perceive the regulatory environment as more conducive.
Under the regulatory sandbox proposal, the MAS shall endeavour to inform an applicant of its potential suitability for a sandbox within 21 working days before the applicant proceeds to make a formal application. This will facilitate the applicant’s business and resource planning.
The United Kingdom launched its own regulatory sandbox to promote and support so-called “disruptive financial technologies” in May 2016, and Australia has released a consultation paper on 8 June 2016 that seeks feedback on its own Fintech regulatory sandbox’s proposed design.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact Morgan Lewis Stamford LLC, a Singapore law corporation affiliated with Morgan Lewis & Bockius LLP.