Part of a comprehensive analysis of the Financial Services and Markets Act 2022
All Parts in This Series
- PART 1 (this article)
- PART 2
- PART 3
- PART 4
- PART 4
- PART 5
- PART 6
- PART 7
- PART 8
- PART 9
- PART 10
- PART 11
- PART 12
- PART 13
- Part 7
- PART 14
- Part 1
- Part 2
- Part 3
- Part 1
- Part 3
Financial Services and Markets Act 2022: Key Provisions and Their Purpose
The Financial Services and Markets Act 2022 (hereinafter "the Act") serves as a foundational statute governing financial services and markets regulation in Singapore. The Act’s initial provisions establish its commencement and define critical terms that delineate its scope and application. Understanding these provisions is essential for grasping the regulatory framework and the entities subject to the Act.
"This Act is the Financial Services and Markets Act 2022 and comes into operation on a date that the Minister appoints by notification in the Gazette." — Section 1, Financial Services and Markets Act 2022
Verify Section 1 in source document →
Section 1 exists to formally introduce the Act and specify that its commencement date is to be appointed by the Minister through a notification in the Gazette. This mechanism allows flexibility in the timing of the Act’s enforcement, ensuring that all necessary administrative and regulatory preparations can be made before the law takes effect.
"In this Act, unless the context otherwise requires — 'Authority' means the Monetary Authority of Singapore established by the Monetary Authority of Singapore Act 1970; 'bank' means a bank licensed under the Banking Act 1970; 'corporation' has the meaning given by section 4(1) of the Companies Act 1967; 'financial institution' means — (a) any bank; (b) any merchant bank licensed under the Banking Act 1970; (c) any finance company licensed under the Finance Companies Act 1967; (d) any person that is approved as a financial institution under section 4; (e) a person granted a licence under the Payment Services Act 2019; (f) any insurer licensed or regulated under the Insurance Act 1966; (g) any insurance intermediary registered or regulated under the Insurance Act 1966; (h) any financial adviser licensed under the Financial Advisers Act 2001; (i) any approved holding company, approved exchange, recognised market operator, licensed trade repository, licensed foreign trade repository, approved clearing house, recognised clearing house, authorised benchmark administrator, authorised benchmark submitter, designated benchmark submitter or holder of a capital markets services licence under the Securities and Futures Act 2001; (j) any trustee for a collective investment scheme authorised under section 286 of the Securities and Futures Act 2001, that is approved under that Act; (k) any trustee-manager of a business trust that is registered under the Business Trusts Act 2004; (l) any licensed trust company under the Trust Companies Act 2005; (m) any designated financial holding company under the Financial Holding Companies Act 2013; (n) any person licensed under the Banking Act 1970 to carry on the business of issuing credit cards or charge cards in Singapore; (o) any operator of a designated payment system regulated under the Payment Services Act 2019; (p) any person licensed under this Act to carry on the business of providing any type of digital token service; and (q) any other person licensed, approved, authorised, designated, recognised, registered or otherwise regulated under this Act or any other MAS scheduled Act — (i) including any person who is exempted under this Act or any other MAS scheduled Act from being licensed, approved, authorised, designated, recognised, registered or regulated; but (ii) not including any collective investment scheme that is authorised under section 286, or recognised under section 287, of the Securities and Futures Act 2001, but does not include (whether in respect of the whole, or any Part or provision, of this Act) such person or class of persons as the Authority may, by regulations made under section 192, prescribe; 'Guidelines on Fit and Proper Criteria' means the Guidelines on Fit and Proper Criteria mentioned in section 188 which are for the time being in force; 'MAS scheduled Act' means any Act set out in the Schedule to the Monetary Authority of Singapore Act 1970." — Section 2, Financial Services and Markets Act 2022
Verify Section 2 in source document →
Section 2 provides comprehensive definitions of key terms used throughout the Act. This section is critical because it clarifies the entities and concepts to which the Act applies, thereby preventing ambiguity and ensuring consistent interpretation. The definitions also cross-reference other statutes, integrating the Act within Singapore’s broader financial regulatory framework.
Definitions in the Financial Services and Markets Act 2022: Clarifying Scope and Application
The Act’s definitions are meticulously crafted to encompass a wide range of financial entities and regulatory concepts. This breadth reflects the complexity of Singapore’s financial ecosystem and the need for a unified regulatory approach.
"'Authority' means the Monetary Authority of Singapore established by the Monetary Authority of Singapore Act 1970;" — Section 2, Financial Services and Markets Act 2022
Verify Section 2 in source document →
The term Authority refers to the Monetary Authority of Singapore (MAS), the central regulatory body responsible for overseeing financial institutions and markets. This definition anchors the Act’s regulatory powers and responsibilities in MAS, ensuring a single authoritative entity for enforcement and supervision.
"'bank' means a bank licensed under the Banking Act 1970;" — Section 2, Financial Services and Markets Act 2022
Verify Section 2 in source document →
Defining bank by reference to the Banking Act 1970 ensures that only institutions officially licensed under that Act are captured. This linkage maintains regulatory consistency and avoids overlap or conflict between different statutes.
"'corporation' has the meaning given by section 4(1) of the Companies Act 1967;" — Section 2, Financial Services and Markets Act 2022
Verify Section 2 in source document →
By adopting the Companies Act 1967’s definition of corporation, the Act aligns with established corporate law principles, facilitating clarity regarding the types of legal entities subject to its provisions.
The definition of financial institution is notably extensive, covering a wide array of entities licensed or regulated under various statutes, including but not limited to:
- Banks and merchant banks licensed under the Banking Act 1970
- Finance companies under the Finance Companies Act 1967
- Payment service licensees under the Payment Services Act 2019
- Insurers and insurance intermediaries under the Insurance Act 1966
- Financial advisers under the Financial Advisers Act 2001
- Capital markets services licensees under the Securities and Futures Act 2001
- Trustees and trustee-managers under the Business Trusts Act 2004 and Trust Companies Act 2005
- Designated financial holding companies under the Financial Holding Companies Act 2013
- Operators of designated payment systems and digital token service providers
This comprehensive definition ensures that the Act’s regulatory reach extends to virtually all significant financial market participants, promoting a cohesive regulatory environment.
Penalties for Non-Compliance: Absence in Preliminary Provisions
It is noteworthy that the Preliminary Part of the Act, specifically Sections 1 and 2, does not prescribe any penalties for non-compliance. This absence is deliberate, as the Preliminary Part primarily serves to establish the Act’s commencement and define terms. Penalties and enforcement mechanisms are typically detailed in subsequent Parts of the Act, which address specific regulatory requirements and offences.
Cross-References to Other Acts: Integration Within Singapore’s Legal Framework
The Act’s definitions incorporate references to multiple other statutes, reflecting an integrated regulatory approach. This cross-referencing ensures that the Financial Services and Markets Act 2022 operates harmoniously with existing laws, avoiding duplication and conflicts.
"'MAS scheduled Act' means any Act set out in the Schedule to the Monetary Authority of Singapore Act 1970." — Section 2, Financial Services and Markets Act 2022
Verify Section 2 in source document →
The concept of MAS scheduled Act is pivotal, as it encompasses all Acts listed in the Monetary Authority of Singapore Act 1970’s Schedule. This inclusion allows the Act to apply to persons and entities regulated under these various statutes, thereby broadening its regulatory scope and reinforcing MAS’s supervisory authority.
By defining terms such as Authority, bank, and financial institution with explicit references to other legislation, the Act ensures clarity and legal certainty. This approach facilitates effective regulation by providing a clear legal basis for MAS’s powers and the obligations of regulated entities.
Conclusion
The Financial Services and Markets Act 2022’s Preliminary Part lays the essential groundwork for the Act’s operation. Section 1 establishes the Act and its commencement mechanism, while Section 2 provides detailed definitions that clarify the entities and concepts within the Act’s ambit. These provisions exist to ensure legal clarity, regulatory coherence, and effective supervision by the Monetary Authority of Singapore. Although penalties for non-compliance are not addressed in this Part, the foundational definitions and cross-references are critical for the Act’s comprehensive regulatory framework.
Sections Covered in This Analysis
- Section 1: Establishment and Commencement of the Act
- Section 2: Definitions and Cross-References
Source Documents
For the authoritative text, consult SSO.