SINGAPORE Law and Practice Contributed by: Kenneth Pereire and Lin YingXin, KGP Legal LLC
Insurtech are regulated under the Insurance Act and FAA for licensing as insurers, intermediar - ies or financial advisers. They must follow MAS insurance disclosure guidelines and PDPA for data protection. Digital lending platforms are governed by the Moneylenders Act for consumer loans and SFA for investment-based lending. They require a Capital Markets Services Licence and must meet MAS disclosure and risk management standards. Embedded finance (BaaS) is regulated under the Banking Act and PSA. Providers must com - ply with MAS TRM Guidelines and outsourcing standards for cybersecurity and data protection. Green and ESG fintech is subject to MAS Envi - ronmental Risk Management Guidelines and must align with frameworks like TCFD, report ESG data and follow PDPA when handling sen - sitive information. Robo-advisers are regulated under the FAA for licensing and SFA for investment advice. They must comply with MAS TRM Guidelines and PDPA for data privacy. Regtech firms offering compliance tools must follow MAS outsourcing guidelines, AML/CFT requirements, and PDPA for secure data han - dling. Crowdfunding platforms are regulated by the SFA, requiring a Capital Markets Services Licence. They must ensure transparency and investor protection per MAS regulations. 2.3 Compensation Models In Singapore, industry participants in the fintech sector utilise a variety of compensation models,
including transaction-based fees, subscription models, management fees and commission- based structures, depending on their service offerings. Under the relevant regulatory frameworks, including the FAA and PSA, industry participants are required to provide clear and comprehensive disclosures to their clients. These disclosures must include specific information on the nature, amount, frequency and duration of any fees and charges associated with the services provided. This ensures transparency, helping clients fully understand the financial terms of the services they engage with, and fostering trust in the fin - tech ecosystem. These disclosure requirements are consistent across the various compensation models used in the sector. 2.4 Variations Between the Regulation of Fintech and Legacy Players In Singapore, fintech companies and banks are regulated differently due to varying busi - ness models, scale and risks. Fintechs operate under laws like the PSA, SFA, and FAA, tailored to services such as payments, lending and digi - tal assets. Banks are governed by the BA with stricter prudential regulations for capital, liquidity and solvency due to their systemic importance. Fintechs face lighter licensing and capital requirements, often needing SPI or MPI licences under the PSA, while banks comply with Basel III capital adequacy rules. Fintechs focus on AML, cybersecurity and data privacy with flex - ible frameworks, whereas banks follow stringent AML, CTF and cybersecurity standards. Fintechs typically offer niche products like peer- to-peer lending or robo-advisory, while banks provide a broader range of services subject to stricter regulations. Fintechs can test innovative
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