Series
Publications
Series
Publications
Fintech
New VA dealing and VA custodian regimes proposed: The Financial Services and the Treasury Bureau and the Securities and Futures Commission (SFC) have jointly issued two public consultations, with one paper proposing a new and comprehensive regulatory and licensing framework for virtual assets (VA) custodian services in Hong Kong and another introducing a new, broad licensing and supervisory regime for persons and businesses dealing in VA. Both regimes will be subject to SFC supervision. Under the proposals, any business providing virtual asset dealing services in Hong Kong, whether online or at physical locations, would require a new VA dealing services licence. In addition, entities carrying on a business in Hong Kong providing safekeeping of VA on behalf of clients or who enable the transfer of client VA will need to be licensed for VA custody. Actively marketing VA dealing or custody services to the Hong Kong public, even if carried out from outside Hong Kong, would trigger these licensing requirements. Both existing regulated firms currently offering VA activities, as well as those who are presently unregulated, will be affected by the proposals and will need new licences. Read more in our Bulletin.
SFC Supervision
SFC highlights control weaknesses and new expectations for client asset protection: The SFC has warned of recent asset misappropriation cases at licensed corporations (LCs), involving both external fraudsters and dishonest staff. The SFC is focused on protection of client assets as a top priority, and in its latest circularization exercise on internal controls on client assets at selected accounts at small-to-medium brokers, it was found that common problems include accepting unverified client instruction changes, inadequate checks on email or written requests, permitting third-party payments or asset transfers without proper controls, and weak oversight of dormant accounts. The SFC expects LCs to tighten procedures in several areas, such as verifying all change requests directly with clients using alternative contact methods, strengthening controls for email instructions and third-party transactions and closely monitoring dormant accounts for unusual activity.
SFC consults on new restrictions to prevent misleading business names used by unregulated firms: The SFC has launched a public consultation to strengthen controls over the names used by unregulated entities, aiming to stop businesses from misleading the public into thinking they are regulated by the SFC. Key proposals include (i) expanding the list of restricted names under the Securities and Futures Ordinance to address the growth of virtual asset trading platforms (VATPs) and other recent market developments, (ii) aligning restrictions under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), given that VATPs are regulated under both regimes, and (iii) wider coverage of prohibited names, which would restrict not just traditional terms like "stock exchange", but also names such as "trading platform", references to "virtual assets" or "clearing facilities", and any titles implying links to established exchanges, VATPs, or similar entities. The SFC invites feedback from industry participants and the public by 11 August 2025.
Cybersecurity
SFC highlights new actions against unauthorised trading at financial firms: The SFC has issued new guidance in response to a rise in unauthorised trading incidents, where criminals used phishing SMS messages to steal client login details and access trading accounts. Licensed Corporations (LCs) must act swiftly to prevent these incidents by: (i) signing up for the SMS Sender Registration Scheme; (ii) raising client awareness; and (iii) enhancing detection and controls for identifying unauthorised access and transactions in client accounts.
Banking
Update to promotion and sale arrangements under the Southbound Scheme of the Wealth Management Connect: The Hong Kong Monetary Authority (HKMA) has clarified rules for Hong Kong banks participating in the Southbound Scheme of the Cross-boundary Wealth Management Connect in the Greater Bay Area. Mainland partner banks can help customers hold three-party meetings (either online or by phone/video) with Hong Kong banks at the request of a Southbound scheme customer. In these meetings, Hong Kong bank staff can introduce eligible products, but all transactions by Southbound investors are protected by Hong Kong law. Hong Kong banks must meet all suitability and regulatory requirements, make party roles clear in agreements with Mainland partners, and not suggest Mainland banks act as their agents or representatives in the Mainland.
Money Brokers
HKMA highlights updated FX Global Code for money brokers: The HKMA has notified Approved Money Brokers (AMBs) of the newly updated FX Global Code, released by the Global Foreign Exchange Committee on 24 January 2025. The FX Global Code sets out global principles of best practice for the wholesale foreign exchange market, aiming to ensure a robust, transparent, and fair market environment. The latest update, following an extensive review and public consultation, refines five key principles to further strengthen practices for managing foreign exchange settlement risk and to improve market transparency, especially concerning certain execution activities and the use of FX data. AMBs are reminded of their ongoing obligation under the Banking Ordinance to comply fully with codes of conduct adopted by the Treasury Markets Association (TMA), which incorporates the FX Global Code. Brokers should review their processes in light of these refinements, update their compliance as needed, and renew their Statement of Commitment to the Code. Statements should be provided to the TMA and AMBs are encouraged to promote awareness of the updated Code among clients where relevant.
Capital Markets
Blocking of unregulated overseas online trading platforms: The Monetary Authority of Singapore (MAS) and Singapore Police Force (SPF) has announced that access to the websites of two overseas online trading platforms, Octa and XM, will be blocked for Singapore residents from 20 June 2025. Both platforms were found to be offering and marketing their trading services—including leveraged foreign exchange, commodities, indices, and equities—to Singapore customers without the required capital markets services licence in breach of the Securities and Futures Act 2001.
Updated FAQs on two-factor authentication for online financial services platforms: The MAS has updated its FAQs on Two-Factor Authentication (2FA) for Online Financial Services Platforms. The MAS has expanded its FAQs to mandate 2FA to cover a broader range of online financial services and introduced stricter cyber threat detection requirements, while removing the option to opt out of two-factor authentication. This provides guidance to financial institutions operating online trading and investment platforms on the use of two-factor authentication to protect online customer accounts against unauthorised access.
Statement of Commitment to the FX Global Code: The MAS has reviewed the content of the FX Global Code and issued its Statement of Commitment to the Code. This demonstrates MAS’ commitment to adhering to the principles of the Code when acting as a market participant and that its internal practices and processes align with the principles of the Code.
Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT)
Responses to feedback received on proposed amendments to AML/CFT Notices for FIs and VCCs: The MAS has published its responses to feedback received on their consultation paper on proposed amendments to anti-money laundering and countering the financing of terrorism (AML/CFT) Notices and Guidelines for financial institutions (FIs) and variable capital companies (VCCs), which apply to all FIs. The revised Notices and Guidelines have come into effect on 1 July 2025. Read more in our May bulletin.
AML/CFT Notices and Guidelines: In line with the proposed amendments to AML/CFT Notices for FIs and VCCs, the MAS has updated and published various AML/CFT Notices and their accompanying Guidelines under the Financial Services and Markets Act 2022, which have come into effect on 1 July 2025. These AML/CFT Notices are aimed at life insurers, banks, merchant banks, payment service providers, VCCs and other FIs.
MAS Notice BTA1-N01 to Trustee-Managers on Prevention of Money Laundering and Countering the Financing of Terrorism: The MAS has also published Notice BTA1-N01 under the FSMA, setting out AML/CFT obligations for trustee-managers of registered business trusts. Trustee-managers must disclose their trustee status in dealings with financial institutions and maintain all trust records for at least five years post-deregistration. The Notice also specifies that records must be kept appropriately and retained longer if required for investigations or suspicious transaction reports.
Composition penalties imposed against five major payment institutions: The MAS has imposed composition penalties on five licensed major payment institutions (MPIs) amounting to S$960,000 for breaches of AML/CFT requirements under MAS Notice PSN01. The MPIs were found to have inadequate AML/CFT controls in place, resulting in multiple breaches of AML/CFT requirements, such as failures in identifying, verifying the identity and screening of customers and beneficial owners, verifying the authority of appointees acting on behalf of customers, and breaches of wire transfer requirements. The MPIs are Remsea Pte Ltd, Arcade Plaza Traders Pte Ltd, J-Dee Remittance Services Pte Ltd, Mobile Community Tech Pte Ltd and OxPay SG Pte Ltd. The MAS emphasised its expectations of senior management of FIs to play an active role in the implementation of AML/CFT controls and remediation measures. The MAS intends to publish an information paper outlining common issues, supervisory expectations, and suggested improvements identified during recent examinations to help guide the wider industry.
Funds
Circular on Governance and Management of VCCs: The MAS has published a circular sharing key findings from its thematic review of VCC managers, highlighting good practices and supervisory expectations for VCC managers in their governance and management of VCCs. The MAS observed general compliance with key regulatory requirements but identified gaps in custody arrangements, appointments of VCC managers and directors, and substantive fund management activity. The circular also reinforces the expectation for robust AML/CFT controls and processes, including strong management oversight, compliance with AML/CFT requirements and regular training.
Banking
Consultation on proposed framework for ex-post resolution levies for banking sector: The MAS has published a consultation paper seeking feedback on the proposed framework for imposing ex-post levies on the banking sector, comprising banks, merchant banks and finance companies, to recover the cost of resolving a distressed bank under Division 10 of Part 8 of the FSMA. The MAS previously consulted on the proposal to apply ex-post levies on the rest of the banking sector (i.e. all other banks, merchant banks and finance companies) and most respondents concurred with the proposal. The MAS is now consulting on the following for the ex-post levies framework:
The consultation closes on 31 July 2025.
Fintech and Payments
MAS announced the incorporation of a new payment entity: The MAS and Association of Banks Singapore (ABS) have announced the incorporation of Singapore Payments Network (SPaN), which will administer and govern Singapore’s national payment schemes. Its purpose is to consolidate and scale up national payment schemes, such as FAST, PayNow and SGQR, positioning them for future growth and regional interoperability.
MAS clarified regulatory regime for Digital Token Service Providers (DTSP): In a media release, the MAS has clarified the applicable scope for its DTSP regime under the FSMA. As of 30 June 2025, DTSPs offering services solely to overseas customers involving digital payment tokens or tokens of capital markets products must be licensed by MAS or otherwise cease these activities. However, MAS has set the bar high for licensing and will generally not issue a licence under the FSMA due to higher money laundering risk and little substantive regulated activity in Singapore. There was no transition period due to the higher risks presented.
Contents