SINGAPORE Law and Practice Contributed by: Kenneth Pereire and Lin YingXin, KGP Legal LLC
fund solvency; (iii) capital adequacy requirements; (iv) board composition; and (v) financial soundness. Who May Apply The sandbox is open to a wide range of entities involved in the financial sector, including fintech start-ups, established financial institutions, technol - ogy companies and other innovators. MAS assesses each application based on its merits, considering fac - tors such as the potential benefits to consumers, the novelty of the innovation and the applicant’s ability to manage associated risks effectively. Approach to Regulation of Sandbox Companies MAS maintains oversight throughout the testing phase to monitor the progress of sandbox participants and assess any risks that may arise. While certain regula - tory requirements may be relaxed during the sandbox period, MAS ensures that adequate safeguards are in place to protect consumers and the integrity of the financial system. At the end of the testing period, MAS conducts a review to determine whether to grant regu - latory approval for the innovation to be deployed on a broader scale, subject to any necessary adjustments or conditions. This approach allows for innovation to flourish while maintaining regulatory standards and safeguarding the interests of all stakeholders. 2.6 Jurisdiction of Regulators In Singapore, the regulation of the fintech industry is managed by several key agencies, each overseeing different aspects of the sector, for instance: • MAS – regulates fintech activities like payments, digital banking and cryptocurrencies under laws such as the PSA and SFA, and runs the FinTech Regulatory Sandbox for innovation and testing; • ACRA – oversees business registration and compli - ance with the Companies Act, ensuring corporate governance and accurate financial reporting for fintech companies; • CCCS – enforces competition and consumer pro - tection laws to prevent anti-competitive practices and safeguard fair trade in the fintech space; • PDPC – regulates personal data under the PDPA, ensuring fintech companies comply with data pro - tection and consumer privacy standards;
• SGX – oversees securities and tokenised asset trading, enforcing transparency and investor pro - tection in capital markets; and • IMDA – oversees digital infrastructure, telecom - munications and technology standards and plays a supporting role in cybersecurity, data governance and digital innovation initiatives relevant to fintech operations. 2.7 No-Action Letters MAS does not operate a formal “no-action” letters regime in the manner adopted in certain other jurisdic - tions. However, MAS may provide regulatory guidance or clarification on how it views proposed activities, particularly in the context of the FinTech Regulatory Sandbox or through supervisory engagement. Such guidance may include indications or regulatory for - bearance or the granting of specific exemptions or relief subject to conditions and ongoing supervisory oversight. The SGX similarly does not typically issue “no-action” letters but may grant exemptions or relief from certain listing requirements on a case-by-case basis. 2.8 Outsourcing of Regulated Functions In Singapore, the MAS has issued comprehensive guidelines on outsourcing for financial institutions. These guidelines mandate that institutions rigorously evaluate vendors to ensure they can uphold a high standard of care, performing services with the same level of diligence as if conducted by the institution itself. Vendors must adhere to the institution’s obliga - tions as a regulated entity, encompassing stringent requirements related to data protection, confidentiality and regulatory compliance. When entering into outsourcing agreements, indus - try participants are obligated to precisely delineate the obligations, responsibilities and expectations of both parties involved in the outsourcing arrangement. Moreover, these agreements must grant institutions the authority to intervene if necessary to meet their legal and regulatory obligations. Where outsourc - ing arrangements are considered material or critical, MAS expects enhanced risk management measures, including stronger oversight, audit rights, business continuity planning and exit strategies.
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